The process of starting a business means creating your product or services, from defining your business strategy to writing the business plan. It also entails seeking capital by looking for possible investors, contacting banks, negotiating for loan terms, and reviewing loan documents. Then you begin the process of choosing the legal structure, registering the business with your local county office, and getting licenses, permits and tax identification numbers. Once you have the business set-up, the next step requires developing the marketing plan, doing the actual marketing, cold-calling clients and closing the sale, and preparing marketing materials. Then comes the part of managing the business, which includes keeping the cash flow positive, doing bookkeeping, and collecting receivables (if any). If you have a web site, you need to begin designing the site, keep it updated, reading all emails and responding to inquiries. And so on and so forth.

Running a one-person home business can be very overwhelming. You may feel burnt out and frustrated too early in the game. There are just too many things that need to be done and 24 hours is simply never enough. As a business owner some tasks may not even be part of your core competencies that you still need to learn and develop skills or even take lessons to be prepared for it. Nonetheless, you have to do it because no one will!

You will find that getting customers can be a challenge. If you are operating on the Web, looking at your site statistics and seeing that only five people have visited it so far can be very frustrating (probably you, your family members and a couple of friends). Hence, you may be tempted to use unethical Internet practices such as sending spam messages in the hope of getting people to visit your site and buy your products. This can add to your frustrations because many recipients of "Spam" retaliate by sending you flame messages or report you to your ISP. This could make your life a bit miserable during your early days online.

Even if you put a sign in front of your house to announce your business to passers-by, you will find that it takes time for prospects to trust you and take your business seriously. The customers may not respond to your business in the timeframe that you think they should.

To help solve the problem, you need to do your homework early on by researching who your customers are, identifying where they are located, and determining the most cost-effective ways they can be reached. Research has shown that the three most effective strategies for home-based businesses to get customers are through word-of-mouth advertising, referrals, and personal networking. You can also engage in various cost-effective strategies such as publicity campaigns, cold calling prospects, subcontracting for larger businesses, and others. Be patient, though: it takes time for any marketing strategy to bear fruit.

You can also try convincing your former employers to support your business by buying your products or contracting your services. A number of corporate workers-turned-home business entrepreneurs initially cater to their former employers, then seek out other clients as they become more established.

When seeking financing from banks, getting suppliers credit, or even applying for a merchant account (account that allows you to accept credit cards for your business), you will find that most creditors and lending institutions stay away from home-based businesses. Banks, in particular, are too conservative and are often reluctant to provide start-up financing. In their book, a home business is too great a risk, more so if you have little or no experience in running any business.

Lending institutions and creditors will not touch you with a 10-foot pole, unless they see that you have ample personal financial resources. The irony, of course, is that you will not have gone to the bank to request for a loan if you have the personal resources. Some creditors may lend you, but the terms could be so stiff and the loan amount too small. Vendors may extend some credit to you, but they are usually small at the start and you may have to promise future business in return for the extension of the immediate credit.

It can be very frustrating to discover that it is harder to get money from outside sources if you do not have any personal resources (assets and properties for collateral, access to high credit lines from credit card companies, etc.) to begin with. And much, much harder if you have some bad and negative remarks on your credit report.

One of the primary reasons you may have started a home business is to be closer to your family while working in a business that fits your schedule. Alas, you may sometimes find that family obligations take up most of your time, and what little time you have left is insufficient to do any work at all.

If you have a new baby in the household, you may find your hands full nursing the baby, changing diapers, and taking care of baby's needs that it is almost impossible to concentrate on finishing your business plan. If you have toddlers in the house, you may find it hard to cold-call clients and be heard amidst the screaming, crying and fighting. When your spouse arrive, he may expect you to drop everything that you are working on and demand that you spend some time with him.

Given that your home now performs the additional function of being your place of work, you must seek out consensus from all family members because of your work's potential impact on their lives. Space previously reserved for family activities may now be taken over by the business. The spare room you once have may now be your home office. Personal calls during the day must be limited to allow customers to easily reach you. Family activities during mealtime or weekends may be disrupted with the visit of a customer.

When thinking of starting a business, you must include in your planning how to cope with both family and work responsibilities. It would be easier if you have the resources to hire babysitters for your kids, or household helps to assist in some of your domestic chores.

An important drawback you will be facing as a home business entrepreneur is the high cost of insurance. If you quit your job, you lose not only your paycheck but also your employer's contribution to your health care insurance. Unless you are married and your spouse is employed, you can expect to shell out more than a hundred dollars a month to cover your own health insurance.

You're your own boss, but that also means you have to supply your own benefits. In terms of health insurance, your options may be limited to individual health insurance coverage purchased directly from a provider; and group coverage purchased through a professional association or civic group (i.e., trade group, chamber of commerce).

Individual health insurance covers medical expenses on an individual basis. To apply, you may be evaluated in terms of how much risk you present to the insurance company generally done through a series of medical questions and/or a physical exam. With group health insurance, a single policy covers the medical expenses of many different people. Unlike individual insurance, where each person's risk potential is evaluated and used to determine insurability, all eligible people can be covered by a group policy regardless of age or physical condition. The premium for group insurance is calculated based on characteristics of the group as a whole, such as average age and degree of occupational hazard. Group health insurance is usually cheaper than individual health insurance.

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