Dear Reader,
These articles will provide a step by step guide on how to start and run a home based business based on my experiences and other home business owners. This is part 1 in a series of 5 articles. They are written in a basic format and where possible main points are summarised in an attempt to be understood by all. I have tried to minimise the technical jargon as much as possible.
So lets jump right in and see what we need to know about starting and running a home based business.
Regards,
Alvin
http://www.parttimeincome.orgI publish Home Business Tips, a fresh and informative newsletter dedicated to supporting people like YOU! If you're looking for the best rated home business opportunities, latest time saving tools and helpful support from a friend in the business, come by and a grab a F-R-E-E subscription today at:
http://www.parttimeincome.orgWhat type of business?
The following is a list of business that can be run from home. Look through the list and note any that grab you, these may give ideas to explore and develop. Please note that this list is not exhaustive, there are many home based business opportunities out there!
- Aromatherapy
- Beauty therapy
- Book keeping
- Computer repairs
- Desktop publishing
- Event management
- Furniture restoration
- Graphic design
- Hairdressing
- Interior decorating
- Network marketing
- Resume writing
- Tutoring
- Web design
Will it work?
Many people waste their resources on good ideas, but not viable business propositions. You need to conduct a feasibility study to test the idea and help you make a decision whether you need to pursue it or not. More on this later.
Essentials you must consider for a home based business:
- A good idea
- Money
- Time
- Customers
- Location
Remember this is a business and a business requires time and money. Be sure you allocate sufficient amounts of both of these when you do your research.
A good place to start your research is to see if someone else has done it before at another location. Find out if they were successful or not and why. This may involve a simple e-mail or a telephone call, you will be surprised how many people are willing to tell you their story.
Legal matters
A decision will need to be made on the legal structure to operate the business, eg: sole proprietor, limited company. You are best to check with a qualified professional, like an accountant, to determine what will be the best for you.
Business costs
You have to take things seriously, a business needs capital to start up and operate. You need to calculate business expenses and the following list will help you think about and estimate some costs. Remember these are listed to stimulate you and because your business may be different, you may have different costs.
Business expenses
- Start up capital
- Telephone, fax, computer
Operating costs
- Insurance
- Cleaning
- Gas & electricity
Administration costs
- Office supplies
- Consultant fees
- Information technology expenses
Trading costs
- Interest charges
- Leasing
- Packaging materials
- Travelling expenses & networking
Break even point
Knowing costs are important to calculate sales needed to reach break even point. This is where the gross profit is the same as your operating costs. If your business doesn't make enough money to reach break even point, plus profit for all your efforts, this business idea may not be feasible.
Borrowing funds
You may have sufficient cash to start and operate the business. Typically you could approach family, banks and financial societies to help you kick start your idea.
When you borrow money make sure you know:
- How much you need
- What you will do with it
- When and how you will repay it
- What collateral you can offer
Target market
You must know the group of people you want to sell your product or service to:
- Who they are
- Their location
- When & how often they buy
- How much are they willing to pay
- Their age
The competition
Most times there are already others doing what you are going to do. Think about what way you can compete with them:
- Price
- Quality
- Knowledge
- Service
This way you and your customers will be clear on your competitive advantage.
SWOT Analysis
A SWOT analysis is a tool to help you determine whether your business will work. SWOT stands for:
- Strength
- Weaknesses
- Opportunities
- Threats
Strength and weaknesses are factors inside your business which the business has a control over. These are what your business is good and bad at.
Opportunities and threats are factors outside your business which the business has no control over. You will find that your opportunities will emerge from your strengths, while your weakness would become threats to your business.
Suppliers
When you have determined what products you need, find a supplier. Research various suppliers and explore what they can offer you. Negotiate the best possible price and trading terms you can. Working closely together with suppliers will form a strong backbone for your business.
Cash flow forecast
This management tool is essential and gives you a summary of your monthly earnings and costs over 12 months.
The basic format of a cash flow forecast is:
- Starting balance
- Add projected cash inflow
- Deduct projected cash outflow
- Result is budgeted cash balance
Usually when you first start a home based business it may be easier to do a three month cash flow projection. List the actual monthly results and this will let you know how accurate your projections are and gives you and idea of a trend so you will be project the next 3 months.
Click Here To Get Other Resources On Home Based Business Ideas & Opportunities
I Am Making As Much Money Part Time From My Home Business As I Was Working Full Time In My 9-5 Job. Want To Hear My Story?
http://www.parttimeincome.org
I publish Home Business Tips, a fresh and informative newsletter dedicated to supporting people like YOU! If you're looking for the best rated home business opportunities, latest time saving tools and helpful support from a friend in the business, come by and a grab a F-R-E-E subscription today at:
http://www.parttimeincome.org