A home business promises many benefits: the freedom to become your own boss, to
work from your home in a manner and style that pleases you, and to take control
of your financial life. You may decide to quit your job and work at home to be
with your newborn baby and take care of your growing family. Or you may simply
be fed up with the daily grind of corporate life that you now want to work at
your own pace.
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But will you be successful in your home business?
 Steven
Strauss, in his book "The
Unofficial Guide to Starting a Home-Based Business" offers six (6)
secrets of successful home-based businesses:
1.
Keep your overhead low.
Your home business may be small, but it enjoys one great advantage big
conglomerates can only envy: very low overhead costs. You have no rent to pay,
no payroll for an army of workers to disburse every month, and no office
furniture and equipment for each one of your staffs to buy. Instead of paying
for overhead costs, you can channel your limited resources to making your
business grow and flourish. Your concentration should be to spend on items that
will give you multiple returns for your money.
Strauss
advises that you should never lose sight of this advantage as your business
grows. If you play your cards right, you will reach a point when your house
has become too small for your venture. Now that you can afford to get your
business its own space, Strauss shares this lesson: "A main reason you
were successful enough to move out was that your overhead was low. Keep it
that way. Run a lean and mean, low overhead, entrepreneurial machine out
there in the real world, and you can't go wrong."
2.
Focus on niche marketing.
Strauss
defines a niche as "your own unique specialty that distinguishes you from
the competition and gives you a hook to remember you by." He cites several
examples: a baker focusing on special chocolate chip cookie recipe; writer doing
stories about public affairs issues; and a web designer building sites for
plastic surgeons.
Focusing on a small segment of a market allows you to easily carve a name
for yourself in your community and build a solid reputation for your
business. This strategy will allow you to package yourself as an expert in
your field - an expert that people can trust and go to should they need your
services or products.
The goal is for your business to be on top of your customers' minds when
they need your products or services. A plastic surgeon needing a web
designer? You must be first on his list! A newspaper publisher needing
stories on what is happening in the community? You as a writer specializing
in public affairs issues should be at the top of the list.
The only drawback for this process is that creating a good business
reputation doesn't happen overnight. It will take consistent delivery of
high-quality products or service through the years before people consider
you an expert in your field. The process may be slow, but the rewards surely
are great!
3.
Continue to grow your business.
As much as we want it to be, a home business will not run on autopilot. Even
though you have successfully started your business, you still have to constantly
work hard to make it grow or at least sustain the level that you want it to be.
As Strauss
writes, " Successful, long-term, home-based entrepreneurs continue to grow
their business even after that business has established itself."
You have to remain committed to your business, keep your passion for it
burning and a desire to keep it growing. This becomes a challenge for an
entrepreneur where running the business has become a routine and a daily
grind. To keep your business alive, vibrant, growing and yet still
home-based, Strauss
offers these tips:
- Market your business to a different segment of population that you
previously did not cover
- Introduce a new product or service that would bring new customers to
your business.
- Branch out to a new profit center.
- Open a branch office in a new city.
4.
Avoid the cash crunch.
Running out of funds when the bills arrive can diminish your enthusiasm for
your business. You have bills to pay - from your apartment's rent to a
supplier's invoice - yet your business is not generating the kind of sales
that you've hoped for. Where will you get the money to pay all your bills?
A cash shortage is a challenge of every business owner. Particularly
during the early days of the business, it will be hard to predict where and
when the money will come and from where. As you continue to operate, you
will become more aware as to the cash flow patterns - what time of the month
your bills need to get paid; and what months are your peaks and lows in
terms of sales. You must then begin to anticipate the cash requirements..
The key to avoid any cash problems is to have cash in the bank reserved
for the proverbial rainy days. To solve this problem, Strauss
advises for businesses to "Plan appropriately, budget accordingly, pay
your creditors and suppliers on time, build a good business credit rating,
and you will avoid the cash crunch dilemma and build a solid home-based
business."
He also suggests the following options if you are always short of funds:
- Keep your receivables current. Make sure that your customers who pay
you "net 30" really does pay 30 days after purchase. Better
yet, keep your receivables at a minimum and require customers to pay
immediately by cash or credit card.
- Get a loan or a credit line to provide you with a short-term infusion
of cash and get things moving again.
- Start a new profit center. If your business is not giving you the
financial results that you expected, it may be time to rethink your
strategy and overhaul your business. Or you can add to your current
operation and widen your sources of revenues.
- Increase the prices of your goods and services, if necessary.
5.
Admit your mistakes, build on your successes.
As you are planning to start your business, you have the time to think of
possible scenarios of what could go wrong and how. But if you are already in
the midst of running the venture, it is so easy to get caught up with the
day-to-day tasks that you no longer have time to evaluate where it is going.
Strauss
emphasizes that, "For your business to survive and grow, if you are
now in business, take stock occasionally and (re) evaluate how your spend
your day." This exercise will help you look at your business
objectively, identify what is wrong with it, and find out how to remedy and
improve the situation.
Strauss
suggests asking yourself the following questions:
- Is what I am doing working?
- Are there any other ways to accomplish what I want more quickly and
with more enjoyment?
- How can I spend my day more efficiently and have a better time?
- What would I need to change in order to do so?
- Are my competitors doing anything that I can copy?
- How can I make more money and have more fun in the process?
- What else can I do to grow and expand without breaking the bank?
- If I could give up any part of my business, what would it be?
- What area can I expand?
- Are my priorities in order?
- What can I do differently?
- What do I need to learn to be more successful?
- How can I give back?
6.
Other mistakes to avoid.
There are a million and one things that can go wrong when you start a
business. Some of these mistakes can nip your business in the bud, while
others can make life tougher for you. Strauss provides the most common
pitfalls that you need to avoid:
- Insufficient start-up capital
- Going first class from the start
- Failure to analyze the business objectively
- Litigation imbroglio
- Not giving the customer a reason to change
- Throwing good money after bad
- Risking everything without calculating the costs.
- Ignoring the obvious.
More
Resources
You may want to read the following books to
increase your home business' chances of success:
Working
from Home : Everything You Need to Know About Living and Working Under the
Same Roof by Paul Edwards, Sarah Edwards
A
View from the Tub: An Inspiring and Practical Guide to Working from Home
by Millie Szerman
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