After the endless planning and 20-hour workdays, you have finally started your
home business. Your business is now running, and you have finally realized your
dream of becoming your own boss.
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Alas, the work does not stop there. You need to immediately start thinking
about ways to make your business grow in order to reach the goals that you have
envisioned. Whether you want your business to become your tool to a worry-free
retirement, a fat savings account and a comfortable lifestyle, you need to make
sure that your business delivers good financial results.
Will Davis, in his book "Start Your Own Business for $1,000 or
Less" offers these three tips for growing a home business (or what he calls
a "mini-biz"):
1. Build up the business you have started.
This entails watching the company
grow and become more complex. There are two ways you can build-up your home
business:
a. Add products or services. As you find that a demand for your products or
services exists, you can begin to grow your business by increasing your initial
product offerings. You can expand your product line in three ways:
- Offer similar product lines. "Give your customers more choices. The
customers can choose which products to buy from more than one line."
- Complementary product lines. "Add different products from those you are now
selling but choose ones that will appeal to the same customer - for example,
jewelry and cosmetics. Customers may buy different products from more than one
line."
- Unrelated product lines. "Offer very different product from those you are
now selling although they may or may not appeal to the same buyers - for
example, jewelry and vitamins. In some situations, this may not make good use of
your selling time and therefore you should give it careful thought before
proceeding. But sometime this technique provides income from one set of products
if others are not selling during the same period of time. For instance, certain
jewelry might sell well before Christmas and Valentine's Day but not sell well
the rest of the year; vitamins may sell well all year."
b. Hire help. When the workload gets heavy, consider seeking help. Davis
outlines three reasons why you will hire employees:
- To do the same type of work you are doing (preparing resumes if you are a
resume writer; taking pictures of another assignment shoot if you are a
photographer, etc.)
- To do the routine chores, such as office work, while you
concentrate on what you like and can do best Instead of doing the packing or
shipping --tasks you could hire someone else to do for minimum wage-- you could
be picking up the phone and getting a new customer, or developing a new product.
- To add a skill or expertise your business needs. When you don't have the
valuable experience or knowledge you need, you should find good people who have
what you lack and hire them.
However, try looking for help first from your family members before you hire
outside employees. If it is a temporary overload of work as a result of seasonal
demands, perhaps your kids can help out in their spare time. For others, they
choose their husbands or wives as their first employees. Michelle Arpas hired
her husband after GeniusBabies.com started showing a profit and enjoyed hefty
order volumes.
Before hiring an outside full-time employee, consider outsourcing and
subcontracting when the workload becomes heavy. You will be getting extra help,
without the constant worry of whether there will be enough work to justify
paying the person.
2. Stay relatively small, but get involved in other small
businesses. You may
discover in the course of running your business that a simple retooling of your
products or services can attract a new market. This new opportunity may later
become a spin-off business that you can run side-by-side.
The process will entail doing the same start-up steps that you did when you
started your first business. Once you have ideas for several product or service
variations, the next step is to evaluate the market potential for them, looking
at everything from the size of each market to the buying preferences and
expectations of the target audience. Identify all your potential new competitors
and review their marketing materials, including their ads, brochures and Web
content. Where appropriate, mystery-shop the competition or make on-site
observations to learn how competitors' products are being used.
Despite the flurry of activity surrounding a new market launch, you need to
be on top of your existing accounts. That way, you'll build one successful
profit center on another as you expand.
3. Use your home business to gain experience and funds to start or buy the
business you always wanted. You can always use your home business as your
stepping stone to the kind of business that you really want, particularly if
your dream business requires more capital and more expertise.
A friend of mine has always wanted a shop selling Asian handicrafts and
antiques. However, she could not afford as yet the high cost of traveling to
various Asian countries to buy inventories and establish relationships with
suppliers. Hence, for the last year she worked as a home-based freelance writer.
Now, with the earnings from her earlier business, she is now ready to launch her
new business.
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