Starting a Home Based Business
How to Start Your Home Business
A Perfect Time to Start a Home Business!
Starting a Home Based Business
I don't want to have debts, but I do want to start my own business! I quit my full-time job to be a full-time homeschool mom. My husband and I are living now with one income.
The situation is that we want to start our own business. I will be the one to run it and my husband will keep his full-time job. Right now, we are evaluating some franchise/license opportunities. The one that we like most requires us to invest about $75,000. We are thinking about a SBA loan. If the business goes okay, then we will expand and my husband will quit his job to be an entrepreneur, which is one of his dreams. What can the experts at The Dollar Stretcher suggest?
Starting a Home Based Business: Examine Your Interests and Skills
There is no one-size-fits-all answer to this question. What kind of business is right for you depends to a large extent on your individual interests and skills. Personally, I think it makes much more sense to decide first what it is you want to do and then decide whether it makes sense to start a business doing it, rather than deciding to start a business and then deciding what you want it to be.
When I chose to go into business as a freelance writer about two years ago, I knew I would be taking advantage of the skills and business contacts I had developed over a period of eight years in publishing. Another advantage for me was that this business had almost no start-up expenses. I could work from home using equipment I already had, which included my home computer, printer, and Internet connection. If I had needed to take out a loan to start my own business, I probably wouldn't have done it.
I recommend you check out the website of the Small Business Administration (sba.gov), which has many articles on how to start and run a small business. Their "Free Small Business Startup Guide" looks like a particularly useful resource.
Also, I think you may need to think more carefully about whether you can handle the responsibilities of running this business on your own. If you are now a "full-time homeschool mom," what are your kids going to do when you have a business to run? Will they go off to school? I strongly suspect that running a business and homeschooling your kids at the same time is not a realistic goal.
Starting a Home Based Business: Two Resources Will Help on the Journey
She should check out two resources:
- Small Business Development Centers (SBDC) - These are non profits partially funded by the Small Business Administration. They are all over the country and offer free one-on-one counseling and many classes for a fee. She can get help evaluating a franchise, writing a business plan and putting together a loan application.
- Service Corps of Engineers (SCORE) - They are similar to SBDCs with the free counseling and fee based workshops, but are an all volunteer organization. They even offer email counseling, which is especially good for those in rural communities.
Starting a Home Based Business: Really Know the Reality
About five years ago, I was a stay-at-home mom looking to start my own business. We didn't have much debt at the time, and had a modest amount of money to put into it. We bought into a franchise and opened a small boutique shop in our town. The up-front franchise cost was pretty small and we saw it as a great opportunity to make a good living. It all looked good on paper and we signed up for loans and got going.
However, we did not anticipate the limited revenue for the first few months, and soon found our savings gone. The SBA loans and other bills associated with a business came in quickly, and unfortunately, within a year, we had to liquidate and close. We are still paying off the debts this many years later. So unless you have a good cushion of cash to invest, I would seriously reconsider what you can do right now. Also consider that with your attentions focused on a business, you may need to find childcare, work wardrobe, transportation and, most importantly, time for the family. Having your own business is like another child. There is constantly something requiring your attention, and you are on call all day. Be prepared for less time to accomplish all the wonderful things you do in your home right now, for and with your family.
Starting a Home Based Business: Start with a Business Plan
I have started and maintained a variety of businesses and consider myself an entrepreneur, starting when I had my first sales job at 13 years old. I am currently showing my 11-year-old daughter and 9-year-old son how to start by thinking about what kind of business they would each like to start. The first thing I try to teach my kids is to do something in line with something they already love to do. I'm sure this will not be their only venture and I always tell them they can start a business with a goal of eventually selling it to someone else if it becomes that successful. This way, they have an "out" for themselves should they get bored or tired of it. Here are some of my suggestions:
- Before spending so much money and taking out a loan for a new business, I would suggest getting their feet wet by taking on a part-time position with someone else who is already up and running. Get experience at running a business at someone else's expense. This is a good way to learn the day-to-day running of a business.
- Take a few business related classes such as booking keeping, website design/maintenance, marketing or advertising. Whatever you can do yourself could possibly save you money or at least give you the option of having checks and balances on those you hire.
- Try a related direct sales business that has a low start-up cost to get a list of clientele going. If they were going to open up a bakery, perhaps they could start with a food related company, have a few parties a week and gather up names and referrals. Most people know about 300+ people. For every person you meet, they have an untapped source of more customers for you as a business owner. You can also quit at any time without any major financial loss. This is a good way to learn good customer service skills by working one-on-one with your customers. Since one part of this way of doing business usually has a recruiting aspect, this would teach what you need to be able to train others to be good workers. It would also help you hone your eye for talented people to hire. Another idea may be to set a goal or time limit. A goal such as gathering up 1,000+ names or working until you learn a certain set of skills could serve its purpose in saving you time and money. Many mistakes are made simply through not knowing enough information.
- Learn from other people's mistakes. Talk to other people in the same business and see what kinds of obstacles they have encountered and what they would do over if they had the chance.
- Make a five-year business plan to grow the business with the intention of selling it for a certain amount of money. Success can more easily be measured if you can sell it for say ten times what you initially invested in five years. Not that you would, but that would be a nice option to have built into your plan.
- Most importantly, make sure that you truly love what you are doing. The work that you do must be something that you can't wait to wake up and do every day no matter what. Statistics show that up to 95% of all people who work hate their job. Don't be one of them!
Starting a Home Based Business: There is No Equal to Good Information
After enjoying your newsletter for many years, I am glad to finally have an opportunity to give something back! I have made every financial mistake in the book, and have learned a lot along the way.
After coping with a serious disability and a long-term stretch of unemployment, I started a business about one year ago, in partnership with a former classmate. Almost to my surprise, we're actually becoming quite successful. Early in our partnership, we enrolled in a well-respected Workshop in Business Opportunities (wibo.org) that offers a 16-week educational program for would-be entrepreneurs in the New York City area.
Among the first nuggets of advice they provide is do not rush into a franchise opportunity. Take a fraction of your considerable savings and invest it in a course for prospective business owners. You may find one at a local community college or university, or perhaps the SBA can recommend one. Even your local public library may have a connection with S.C.O.R.E., or offer short courses on business research. Spend at least as much time looking into the skills and tasks required to be successful in business as you have spent looking into that franchise!
Of course, you would also want to speak with other franchisees of the company you are considering. There are organizations and publications that evaluate and rate franchise opportunities, and your local librarian can probably help you find them. You may still decide that the franchise is the way to go, but you will have greater confidence in your choice and a better chance of succeeding with good information.
Starting a Home Based Business: From One Entrepreneur to Another
I've been the owner of a freelance writing business for 16 years (home-based for the past 10 years). Here are some things I've learned that may be helpful.
Running your own business is a full-time job. If you want to be successful, you'll need to treat it like a job and work every day. The first few years can be extremely financially, physically, and emotionally intense.
Getting some capital to start the business is a wise idea. I started my company with very little seed money and struggled with cash flow problems for the first four to five years. That said, getting an SBA loan (or any other kind) is a serious decision. If your business fails, you still must repay the loan. Do your due diligence, and know the potential risks and rewards of the franchise you're considering.
Trying to run a home-based business while caring for children is very difficult, if not impossible. I had a caregiver for my daughter when she was young even though I was working at home. I'm not sure how one could homeschool children and run a business. I understand that homeschooling is also a full-time job.
Running your own business is wonderful, but it's not for everyone. Before jumping in, it's worthwhile to consider whether your family and you have the commitment and discipline that it will take to be successful.
Starting a Home Based Business: Read This Book
Going into business for yourself requires some research and planning. If ever I could make any suggestion, it would be to get your hands on a book called The ABCs of Making Money
by Dr. Denis L. Cauvier and Alan Lysaght. This book is a great resource. It tells you the 15 criteria to look for in a business/franchise and even goes as far as to mention the one business that met all 15 through their years of researching business opportunities.
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