You have decided that you want your own business for a variety of reasons: maybe you want to be financially independent, or be your own boss, work at your own time, and maybe, just maybe, retire as a multi-millionaire at the age of 35! But do you know what business you should start?
Selecting the right kind of business is a difficult process for any starting entrepreneur. Many dream of starting their own businesses, but remain frozen in status quo mainly because they do not know what business to engage in. Good ideas seem to be a dime-a-dozen, with newspapers filled with stories of how teens are reaching financial nirvana on very simple business concepts. Unfortunately, the next big business model perfectly eludes you!
Here are ten tips on selecting the home business most suited for you.
1. Take time to explore various options
Instead of choosing the first business that comes to mind, take time to explore various options. Check out other business ideas! Read books providing ideas for possible home-based or small business, and trade magazine articles on trends and market demands. With the phenomenal growth of the Internet, information is now literally at the tip of your fingertips.
2. Find out what type of business appeals to you most.
Read our Hard Knock’s Guide to Selecting a Business. Determine your goals, interests, wants and capabilities. You can turn your fascination for miniature shoes into a business; or your skill and expertise in designing graphics into a fledging business enterprise. The important thing is that you must enjoy your business. The most successful entrepreneurs feel passionate about what they are doing. You cannot feel passionate (and hence more driven) about your business if you do not like it!
3. Choose a business that will be personally satisfying as well as profitable.
While you may have passion for your hobby or craft, always consider its business potentials. Do you think there is a demand for it? Will it bring you recurring income? How saturated is the market? Are there barriers to entry? Will you have economies of scale? Start a business that you think has a solid potential to be profitable. You will need to do a lot of pencil pushing and calculating to determine the financial viability of a business. This will entail analyzing your market and conducting a break-even analysis, a preliminary financial projection that shows you the amount of revenue you’ll need to bring in to cover your expenses. It may sound like a lot of hard work, particularly if you’re not a financial whiz, but this is one of the important steps in assessing whether the business you’ve selected can make you money.
4. Think whether you can and want to handle every aspect of the business.
When you start your new small business, you may not have the luxury of a full-time staff complement to help out in some aspects of the business. Instead of simply focusing on the strategic direction of the business, you may be required to collect receivables, track expenses, cold call customers, and do thousands of other tasks. Be aware of the other tasks that you have to do in your business.
5. Draw a layout of your intended work area to see how it will fit into its allotted space into your home.
Remember, you are starting a business at home to save on overhead costs, so make use of every possible nook and cranny that you can use in your house. If you want to start a cake decorating business, you need to have a large kitchen. Forget about starting a dance instruction class if you live in a studio apartment!
6. Make sure the business meets high safety standards, esp. if you have children at home.
This is particularly essential if your business deals and uses chemicals and other harmful substances. For instance, keep all the chemicals used for a carpet or upholstery cleaning business in a safe place in the garage beyond the reach of children.
7. Check with an insurance agent to determine the kind of insurance coverage the business is going to need.
It is good planning to determine what insurance is necessary to minimize your risks and protect your business. General categories of insurance include property, licensing, liability, health, disability, workers’ compensation, and life insurance.
8. Ensure compliance with zoning laws and ordinances in your area.
Visit your city hall or the planning office to see whether zoning regulations would prevent you from selecting a specific location. Carefully note the regulations governing business signs and types of businesses that are allowed at different locations. You do not want the city hall folks to come knocking down at your door asking you to cease operations after you have spent thousands decorating and equipping your business!
9. Select a business whose organizational characteristics are compatible with yourself or your family.
You should select a business that fits well with the schedule of your family. If you have a newborn baby in the house and your husband works full time, you should look for a business that would allow you to take care of your baby. Businesses that would compel you to actively seek clients out like a real estate endeavor may not be suited for you at this point.
10. Get your family members involved in the business and have fun together working for its success!
Every telecommuter dreams of merging home and office, career and family into a symbiotic blend of harmonious bliss. It is not always easy, but one way will be to involve your family in your home business. During summer, you can ask your kids to help in the packing of your product. Or your teen son can help design your Web site. Your spouse can help in negotiating with your clients. The most important thing, though, is that everyone in your family enjoys working in your business.
- Types of Insurance for Your Home Business
- Book: The Last Chance Millionaire
- Top 5 Challenges of Home Business Entrepreneurs
- Pros and Cons of Financing a Business
- Are You Financially Ready to Start Your Own Business?