According to Small Biz Trends, 69% of entrepreneurs launch their businesses from home. Starting a home-based business can be exciting and lucrative. However, study all aspects of your company carefully before committing your time, money, and reputation. Also, take an honest appraisal of your talent, availability of resources, and the demand for the product or services.
Four Considerations Before Starting a Home-Based Business
Is the business a match for you?
Consider your experience, talents, and education. Beyond your qualifications, are you passionate about the business? There are also practical matters. Are you prepared to work and live in the same environment? Do you truly have the financial resources to launch and operate your desired business?
Is there a market for your product or service?
Marketing any product or service is a big endeavor. Perhaps the biggest mistake business owners make is over-estimating the demand for a product or service. It’s important to conduct the proper market research to understand the demand, select the correct products or services, and market his or herself correctly.
Lack of understanding in this area can cost you thousands of dollars. This is the point in the process in which is it imperative to create a business plan. The Small Business Administration is a useful resource in business planning.
Is the business proposition a scam?
The world is full of scam artists ready to take your money. Watch out for inflated claims of return on investment. Research vendors or franchise companies before you sign a contract. Beware of multi-level marketing companies with an emphasis on recruiting new business owners and less attention to the actual product.
Also, pay attention to costly required training seminars. Some companies make most of their money through ongoing training of business owners/franchisees. The Better Business Bureau is an excellent resource to determine the legitimacy of a company.
Have you reviewed all legal and accounting matters?
It is wise to work with an experienced attorney and accountant before starting your business. Beyond help with tax issues, registration, and contract review, professionals can interpret your local government’s zoning ordinances. Also, there may be homeowners’ association rules associated with having a business at home. Overlooking an accounting or legal matter can have devastating financial consequences.