Managing a home based business offers numerous advantages to small business owners such as more flexibility, an adaptive timetable, no commute and the work-life balance we all crave for. But the reality is that any home based business comes with its own set of challenges and difficulties.
Just because you’re your own boss and you’re in charge of all the business decision, doesn’t mean that you’re not in the risk of making some costly mistakes.
So we compiled a list of the Top 6 mistakes to avoid when starting a business from home.
1. Not having a business plan. A lot of entrepreneurs decide to startup their home based business without any kind of plan and that is a huge mistake. Regardless of the type of business you have, it is essential to take the necessary time and effort to plan the business and to clearly state the objectives you intend to achieve. A lot of small business owners start their home based business like a hobby, but that doesn’t mean they need to treat it as one. Just because your office is in the living room it doesn’t mean that all the business success rules don’t apply to you, so act accordingly, if you want to make it big.
For starters you can use this Mini Business Plan Template to get an idea about the necessary steps you need to take.
2. Not doing any market research before creating a product or delivering a service. Oftentimes startup entrepreneurs tend to get so excited about their business idea that they tend to overlook the market research phase. It’s true that sometimes the business idea works anyway, but if you truly want your home based business to succeed you need to do a market research to test if there actually is a market for your product or service. Market demand for your product or service is the most important factor, so you need to determine the current size and the future potential of the market in order to think your business strategy.
You should also test your product or service before you put them on the market because if you don’t you’ll have no idea if people are even going to want to buy them.
3. Not Keeping a Separate Space for Your Business. Even if you don’t live in a spacious house, you need to set aside a space reserved almost entirely for work. Try to create a professional environment where you can focus on business matters without any distractions and interruptions.
You can opt for a little-used room or for an empty corner in the living area, but everybody needs to know that that is your home office. Don’t just put your laptop and your agenda anywhere in the house and move it every time other members of your family need that space, because this way you won’t be able to concentrate and you will lose the professional vibe you need to create in order for your small home based business to thrive.
4. Not making sure you have enough money. Many small business owners live with the impression that just because it’s a home based business it can bypass all the rules that apply to regular businesses. The harsh truth is that more than 90 percent of businesses will not make money when they first open and it will take a significant amount of time, maybe years, until they start to make significant profits. If you really want to develop your home business you need to be prepared to spend some money to get all the resources you need in place. This is one of the main reasons why it’s advisable to keep your full-time job when you decide to start your own home business, so you will continue to have a constant flow of cash to cover your expenses.
Plus, you will need to create a budget and to evaluate all your start-up and daily operating costs in order to see how your personal expenses and your business overheads fit together and how much you will need to save in order to provide the necessary business funds. After the business has been established, it is vital that you set up a good bookkeeping system to manage cash flow and ensure compliance with tax laws.
Related: Starting a business with no capital
5. Not taking time off. Many home-based business owners develop a tendency to work all the time. This type of mistake goes hand in hand with not having a proper professional space well delimited inside the home, because this way you will tend to work everywhere and anytime and this is a recipe for burnout and can cause resentment among your family members. That is why is particularly important to have the support of your family and to make sure that they understand the concept of you working from home. It may sound odd, but this is actually a real problem, because many people cannot relate to the idea that someone who sits at a computer in his or her home is working; for them working means leaving the house at a certain time, going into an office and coming back home in the evening.
So because it is often difficult to associate being at home with working, you must be able to maintain boundaries between your personal and professional lives and avoid working 24/7, in order to be able to remain productive.
6. Allowing interruptions. When you work from home, the potential distractions are unlimited: your kids playing around, the TV in the background or family members wanting to talk to you. All these distractions get in the way of your focus and your ability to handle the tasks at hand. So both you and your family members have to understand that there needs to be a balance between working time and family time and that just because you’re home, doesn’t mean that you’re not working.
How you can do that without antagonizing your family? For starters you could set your working hours and make sure everybody knows them and then establish specific times when you don’t allow interruptions or taking personal calls.
Any business requires dedication and focus and a home based business makes no exception.
This is our rundown, is your rundown different?
What things do you wish you had done differently? What blunder do you see new entrepreneurs making?
If it’s not too much trouble share your musings in the comments section. You may very well assist somebody with evading a major slip-up.
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