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Should You Start A Home Based Business?

Whether or not to start a home based business is probably one of the most important questions that you will ever have to answer. If you are even seriously pondering the question in the first place, then it probably means that there are circumstances in your life which are causing you to consider undertaking a venture which will have a significant and far reaching impact on your own life and on the lives of your immediate family memebers as well. Before you take a leap of faith into becoming a small business owner, there are a few areas of your life which will be impacted and which you should seriously consider before coming to any final decision as to whether or not a home based business is right for you.

FINANCIAL

Starting your own home based business can have many financial rewards and put you in control of your own financial future. However, there are a few things to consider before beginning your undertaking.

First, will you start your home based business on a part time basis and keep your day job until you are making enough profit to enable you to quit and devote your full attention to your business? Or would you rather quit your day job now so you can devote your full time and energy to building your business? There are pros and cons to both approaches and only you can decide which one you will feel most comfortable with in the long run. If you have enough savings to meet your living expenses for a good six months to a year then it might be worthwhile to quit your day job to focus on growing your business. You’ll see results a lot faster and that will give you the momentum you need to keep going. Starting a home based business requires a lot of up front work and if you are doing it on a part time basis it is easier to get discouraged when the results don’t materialize as quickly as you had originally planned. On the other hand, having a full time income will enable you to spend more on your business without having to worry about meeting monthly living expenses.

You will also have to set a start up budget for your business as well. Any home based business will require some start up costs, even if they are only minimal at first. For example, if you are going to be doing business on the internet, you will need to register your domain name and pay a monthly fee to have your website hosted. Domain names can be registered for as little as $7.00 and monthly hosting can be obtained for a minimum of about $25.00. You’ll also need to determine how much money you are going to devote to advertising your new venture. While there are some very good ways to advertise your business for free, eventually you are going to have to lay out some money to advertise if you hope to see the kind of profits that will make your online business worthwhile. While we are not talking about massive amounts of money here, a few hundred dollars would be a reasonable sum to get some quality advertising to promote your business and allow you to start making some sales which will generate even more cashflow to reinvest in your business.

PERSONAL

Most people who are interested in starting their own home based business cite personal reasons as one of their primary motivations. It seems that more and more people are getting fed up with corporate America these days and it’s no secret that the average workday continues to get longer and longer, lunch hours become nonexistent, and the financial security that once came with retirement is no longer a reality for most people. Not only does having your own home based business put you in charge of your own financial future, it also allows you to start spending real quality time with your family. Most people are so exhausted at the end of a typical workday that just getting through dinner without nodding off is a real challenge. With a home based business, you control the hours you work and you automatically add at least one or two additional hours to your day that you would otherwise spend commuting to and from work.

Of course, getting your family adjusted to having you working from home may take some effort in the beginning. If you have very small children at home it can be a challenge to keep them out of your office while you are trying to get work done. If you are the primary caretaker, you will need to work in small spurts throughout the day while the kids are napping or watching a video and then put in a few hours after they go to bed for the night. Once they are in school, the routine becomes a lot easier because you can adjust your schedule around their schoolday and have most of your daily work completed by the time they get home from school.

Life can sometimes be a series of tradeoffs, so spending all that quality time with your family also means that you’ll no longer have the social interaction that was once a part of your 9 to 5 routine. Now that you have a home based business, you will have to go out of your way to gain some of that same social interaction. Joining local small business organizations is a great way to make new friends, network and have your business become known in your local community. A lot of these organizations have weekly or monthly meetings with guest speakers at either a breakfast or afer work social event. In any case, socializing will now become a great way to network and spread word of mouth about your new business venture.

MOTIVATION

You have to be motivated to start any home based business. This motivation is twofold. I am talking here about both the internal drive to take action and get your business off the ground, as well as the vision you have in your head of what your business will eventually look like once it is established and what it is you want to accomplish with your business.

A home based business can bring many financial rewards, but a lot of people will get discouraged with the up front work that is required to get any business off the ground. I have often heard an analogy used by folks who do business on the internet that I like a lot because I think it is so accurate. The analogy is that starting a home based internet business is like a rocket taking off. For those who are not NASA aficionados, a rocket apparently uses something like 80% of the energy that it will use during it’s entire mission just during those first few minutes of liftoff. That momentum then helps carry it throughout the rest of it’s journey. It’s a lot like that with a home based business. It takes a lot of up front energy, but one day you realize that the hardest part is over and you’ve created enough momentum to help make it easier from now on in. You have to have the motivation to get through those early days, otherwise you’ll never create the kind of momentum that you need to see yourself through.

You’re also going to need to identify your motivation in terms of what it is you want to accomplish with this business of yours anyway. Do you have a great idea or product that you want to promote? Most people actually don’t, and that’s okay. Selling your own product is often thought of as the most lucrative way to make money on the internet, but you can still make quite a bit of money by finding other people’s products and promoting those as an affiliate. That means for every sale you make, you get a commission. And you can also generate residual income for yourself by recruiting other people to become affiliates under you. But no matter which way you go, you have to like what you’re doing and what you’re promoting. Starting a home based business will not bring the financial rewards you are hoping for if you are not doing something that makes you feel energized, excited, challenged and, perhaps most importantly, that you are providing a worthwhile benefit to those people who are buying your product or service.

Well, I certainly hope those few points have given you enough to ponder as you go through the process of deciding whether or not a home based business is right for you. I hope you come to the conclusion that it is, because there is no better way that I know of to take control of your own financial future. If you don’t take the bull by the horns and do it for yourself, nobody else will. But don’t forget to have fun along the way. Pick a home based business that you’ll look forward to tending to day in and day out and that benefits other people in some way, and I promise you that the financial rewards will follow……

Seven Common Mistakes Made By Small Business Owners

Most new small businesses won’t be in business this time next year. That’s the cold hard facts. Though it is easy to start your own business, it takes a lot more to succeed in business. There are seven common mistakes made by small business owners. Let’s explore them so you can avoid them.

Mistake #1: Neglecting Your Continuing Education

You are the only renewable resource, besides your employees, your business has. You may be a master at getting the most out of your other resources, but how are you doing with you?

Today’s world is characterized by rapid change. Keeping up on innovations in your business and new business strategies is crucial for long-term success. However, most small business owners do not invest any time or money into developing themselves. The less you know, the more time, money and energy you will waste in the future.

Do not be satisfied to be “functional” in the software programs you use to run your business. There may be many time saving options in those programs if you take time to find them. Here’s an easy strategy that will take about fifteen minutes a day. Take your favorite software program (accounting, planning, contact manager, or marketing) and access the “help” menu. Now learn one new function of that software program per day. Fifteen minutes of your time may yield big returns in the future!

Mistake #2: Failing To Plan Is Planning To Fail

Many small business owners avoid planning at all costs. The old adage, “Failing to plan is planning to fail”, is true. Without a well-thought out plan for establishing your business, running your business, and marketing your business, you will waste a lot of time. Time you don’t have.

So, how do we find time to plan while we’re trying to run a business? Do the work in small increments. Keep a notebook handy throughout your day. Have sections designated for “Operations”, “Finance”, and “Marketing”. Make notes as random thoughts appear to you during a day. At the end of each week, take an hour or so and summarize the ideas into a plan. Place the actions that will yield the highest potential return at the top of the list. Start Monday of the next week by tackling the items at the top of your list.

Mistake #3: All Work and No Play

Running your own business is hard work. There is no doubt about that. However, without proper relaxation, you will become increasingly less productive. It isn’t the hours you spend at work but the productivity of the hours you spend there. Become a student of your own business. When do most customers access your business? When is the slow time of the day or week? If you are available for an entire hour that may only yield one small sale, you would be better off out of the office.

Take a walk. Talk to people along the way. They could be future customers. Join a gym and work out during a half of that slow hour. This kills two birds with one stone. You get healthier with better endurance and again, you can network with people who might be future customers. Join that Chamber of Commerce and attend those meetings! Join the Rotary or Lion’s Club! Not everything you do to successfully advance your business will occur at your business.

Mistake #4: Take Your Existing Customers For Granted

Remember the first customer you ever had? Remember the appreciation you had for them? Remember the little things you did for them? When did you stop and WHY?

Avoid looking after your existing customers and they will go elsewhere. Customers have more options today then they ever had before. If they don’t find your competitor locally, they will find him/her on the Internet. Ignore customers at your own peril.

The fact is without them you wouldn’t be in business. It’s time to make certain they understand how much you really appreciate them. How about having a special reception or buffet on site for your customers? What about a special appreciation day? When was the last time you contacted customers just to tell them how much you appreciate their business? A happy customer is a valuable business asset, now and in the future.

Mistake #5: Never Ask For Referrals

As stated above, your existing, happy customers are a major business asset. That asset can yield benefits in many ways. But you have to ask. Instead of spending a lot of money on your advertising, why not ask customers for referrals? Referral sales are the cheapest and easiest way to grow your business. “Two Men and a Truck”, a moving business, generated $150 million dollars in revenue from 95% referrals sales. That is a target we should all shoot to match!

Mistake #6: One-Stop Shop Mentality

Many business owners fail to achieve their true potential because they try to be all things to all people. You need to target your ideal customers. Look at your product. Ask yourself who would benefit most from your product. Once you have selected a targeted group, learn everything you can about them.

Change your store or website to reflect that targeted customer’s needs or desires. Speak their language. Find out where they hang out and what they read or listen to. Understand their concerns. Sell them solutions, not products, and you will excel!

Mistake #7: Neglecting Marketing

It is so easy for a business owner to get caught up in the daily operations of a business. The inventory ordering, order processing, data input, and more, can become all consuming. Then one day you look up and wonder what happened to the business.

Marketing is all about future sales. You plant the seed today to reap the benefits tomorrow. If you want a long-term successful business you can hand off to the children, don’t neglect marketing. Every month, set aside at least 20% of your time dedicated to marketing activities.

Marketing activities include deciding to expand an existing product line, dumping unprofitable products or adding new products, determining where your advertising can generate the biggest return for the investment, and planning your marketing materials. These are crucial functions for your success. Neglect them at your own peril!

In summary, staying focused upon these seven common business mistakes can save you a lot of time and money. They are also crucial to the ongoing success of your business. Stay focused on the future while you work in the present. Don’t develop work habits counterproductive to a successful outcome.

Business Opportunities: Success and Failure Statistics as Well as Possible Prevention

Let’s face it, business opportunities are a rather quick, easy way to start a business. They are usually “turnkey” operations, where someone that buys into a program either online or offline is provided with all the necessary elements of immediately being in business for themselves. Business opportunity programs can also be cost effective, as many abound, and finding one within a restricted budget is rather easy.

The biggest challenges faced when choosing a business opportunity program are the following:

1. Choosing one that suits an entrepreneur’s needs and skills as well as interests.

2. Choosing one that pays enough in commissions on goods or services that makes it lucrative enough to turn a healthy profit.

3. Choosing one that is wanted and needed by customers/clients.

4. Choosing one that does not exist in an already glutted market. This would lead to too many choices of other providers and a rather limited market for the business owner.

The sad facts are that because of the easy start up, and the rather quick “fix” that business opportunities present to potential entrepreneurs, business opportunity members can quickly enter a business and just as quickly leave it. Turnover can be quite a problem. Since little initial investment is required, many members “jump into” a business opportunity at whim, and quickly find that running a business is a whole heck of a lot of work!

The reason for the failure rate is also attributable to certain outlooks and requirements that many business opportunity “joiners” fail to consider when joining:

1. Is the business opportunity nothing more than empty promises, the old “too good to be true” adage? Unfortunately, these types of offerings run rampant both online and offline.

2. Is the business opportunity catering to a dying market? Markets can fluctuate, so due diligence is needed. Research into markets, just as with any other business is paramount.

3. Is the business opportunity solvent? Talk to other members, and do research. Become aware of any problems in payments/revenues before you join.

4. Is the business opportunity flexible? Does the Biz Op restrict members in their advertising methods, or are they inflexible and “distant” in their approach to members’ concerns/problems.

5. Is the business opportunity viable? Viability should be financial as well as personal. In other words, does the Biz Op have a great financial track record and does it meet the needs of “you” personally, as far as personal satisfaction and approaches to sales and marketing?

6. Is the business opportunity working within the confines of federal, state and local laws? Depending upon where a member lives, these laws can vary widely!

The real statistics on failures of small businesses, many of which now are business opportunities and franchises, are well documented by the United States Small Business Administration: http://www.sbaonline.sba.gov/. Business statistics provided by the United States Department of Labor, report that in 1994, the number of businesses that failed that year were divided into the following categories:

* Bankruptcies (a 15.4% increase from 1993).

* Failures (a 17% increase from 1993).

* Terminations (.3% increase from 1993).

The Small Business Administration attributes these failures and the evolving higher percentages to the fact that there are now MORE small businesses in the United States overall, with a 49% increase in numbers since 1982.

The Small Business Administration also states specifically that statistically, only one in seven can be considered a true “failure”, leaving unpaid obligations in their wakes. Others simply sell or shut their doors for a variety of other reasons.

Since most business opportunities, at least initially, open with less than 100 employees (many are simply the owner, as sole owner and executor of all business “chores”), then most Biz Ops are indeed “small businesses” and as such all the pertinent failure statistics can be applied to them. What is really surprising and rather “staggering” is the fact that most business failures are not due to outside forces, but those that the business owner has complete control over! These issues included lack of marketing know-how, lack of record keeping, lack of management competence, lack of financial management, and other business basics such as controlling employees and the inability to seek outside assistance and advice!

The wise business owner, whether or not involved in a business opportunity, will seek to learn and implement proper procedures, and investigate proper methods of operation throughout the life of a business.

If this is done, a Biz Op owner, or any small business owner, has less of a chance of becoming the “latest failure statistic”!

© Vishal P. Rao. All rights reserved.