When you start your home business, it is sometimes inevitable that mistakes are made. To get you started on the right path and avoid mistakes when starting your home business, let’s look at the common myths and misconceptions about working on your business from home.
Myth 1: A home-based business has no overhead costs.
Reality: Often as much as 50 percent of a home-based business’ billing rate will go toward covering overhead costs, but the good news is that you can deduct from your income tax a percentage of your household and related bills if you work from your home. You can check with your accountant, bookkeeper, or local IRS office for guidelines about these tax deductions. Read the IRS’ Guidelines on Home Office Deductions
Myth 2: You will not need childcare if you work from home.
Reality: A home business allows you the flexibility of working your own hours in the comfort of your house. However, it is not as easy as it sounds if you have kids. Just try conducting a conference call with a two-year-old in the same room! Even older children can be demanding and sometimes resentful of your business’s demands.
The majority of entrepreneurial parents have some sort of child care arrangement–using either a spouse or baby-sitter to care for the children in the home while they work for a block of time. Others take their children to a family relative, a day care or sitter for a few hours a day so they can work. Check if it is possible to arrange for someone to take care or watch over your kids while you work in your business.
One option for you, of course, is to work in your home-based business only when the kids are sleeping. Less sleep for you, but you may be able to do more work. Or you can work only when your kids are in school (if they are school-age).
It is best to realistically discuss your business idea with your family and think carefully about the number of hours you will actually be able to put into your business.
Myth 3: If you have a home business, you have all the time to do other activities.
Reality: If you are thinking that you have all the time in the world to do a lot of other things just because you are running a home-based business, think again. A home business can be very demanding — even more demanding than a 9-to-5 job. At least with a job, you can leave work at 5 p.m. and totally forget about your job as you enjoy your evening.
For an entrepreneur, especially if you are just starting up, there’s a thousand and one things to do and think about that you may find yourself working far longer hours than when you were just an employee. It is especially hard if you are a one-person business and you need to do everything yourself. It is not uncommon to find new entrepreneurs saying that they worked an average of 12-14 hours per day when the business was just new.
If you want to do a lot of other activities in conjunction with your home business — from volunteering in your kids’ schools to meeting with friends — you need to carefully plan your schedule. It is also important to prioritize the tasks at hand, so you can have a sense of what could be done now and what can be put off for tomorrow. Having a home business does not mean that your “normal life” ends, but be prepared for the business to occupy a huge chunk of your time and energy.
Myth 4: You have a great idea that you know will make you lots of money, and you hope to start it next week.
Reality: First time entrepreneurs and would-be entrepreneurs make the mistake of thinking that a good start and few lucky breaks will spell long term success. Business experts say that the amount of time and research a person puts into a business idea relates directly to the success of that business.
Before going ahead too soon, it is important to thoroughly investigate the business and its trade. While a good start and some lucky breaks can help launch a venture, they will not insure continued success. One woman who has a successful food delivery franchise took a full year to research the business before she invested a single dollar. You can make a list of business ideas that interest you, look to see what businesses like those exist in your community, talk to other entrepreneurs, and even work for a time in a business that is similar to the idea that interests you.
Check, too, to see whether a potential market for your business exists in your community. My sister-in-law tried to start a personal provider service — running errands and shopping for people. Unfortunately, the people in her community are not interested in hiring someone to do their shopping. My sister-in-law now advertises in a community that is only a few miles away but has a higher percentage of professional couples that are more likely to use her business’s services.
When you believe you have a good idea and a potential market, then you can begin to write a business plan to set your goals, financial needs, and so forth. You will have a much better idea of what your business will offer and who your customers will be. You may wish you could start tomorrow, but taking the time to research and plan your business idea will pay off, literally, and your business will be much more likely to succeed.
Myth 5: If you work from home, you can be much more casual in both how you dress and how you treat your customers.
Reality: One of the advantages of a home business is that you can dress in your T-shirt and sweatpants when you work (unless you have a home office that receives customers).
But even if you work in your pajamas, it is important to cultivate a professional image. One of the challenges you will face when running a home-based business is the lack of respect from clients and bigger competitors. You need to prove to them that you are as good as your bigger competitors, albeit with fewer resources.
Start by treating your customers as professional as possible. Do you respond promptly to customer requests? Do you have professional-looking promotional materials? Can your customers depend on your product and service? How can customers and business associates reach you if you are not in your home office? Do you belong to any professional trade groups or associations?
Recommended Books on Home Business:
- Home-Based Business For Dummies
- The Stay At Home Tycoon
- Work at Home Now: The No-nonsense Guide to Finding Your Perfect Home-based Job, Avoiding Scams, and Making a Great Living
- 101 Businesses You Can Start With Less Than One Thousand Dollars: For Stay-at-Home Moms and Dads
- Making Money from Home: How to Run a Successful Home-Based Business