By Rhonda Barfield
You’ve got this great idea for a home business, and you just know it’s going to be a winner. You’re already home-based, and you have some extra time. This seems like an ideal fit. So what could go wrong? Actually, quite a lot. A lot could go right, too. But either way, it helps to understand some basic principles of running a business from home before you jump into this new venture.
1. Do the math on the time investment required.
Most would-be entrepreneurs seriously underestimate their business’ time commitment. Let’s say, for example, that you want to start creating and selling wreaths. Estimate not only the hours required to assemble each wreath, but also driving time to the craft store to purchase supplies. And how long does it take you to find a box, pack it, address it, and mail it? If a customer wants a special addition to the wreath, how many minutes will this require?
Once you have a reasonable estimate, think realistically about how this time commitment would affect your days. Will you have time to operate the business and still (for example) homeschool? Take care of your household? Run errands? Drive your kids to activities? Etc.?
2. Invest conservatively.
If you’ve ever watched the TV reality show Kitchen Nightmares, you know that Chef Gordon Ramsey tries to help restaurant owners who are struggling to make a living. Many of them are failing because they invested enormous amounts of money into a business with little chance of succeeding.
The same can be said of many small home businesses. If you’re considering one, it’s wise to start with a modest investment and then expand it as the cash comes in. Michael and I took out a loan to pay for the printing of 5,000 copies of my first book, Eat Well for $50 a Week, because we knew we already had some major buyers. The money we earned helped us fund 15-Minute Cooking, but sales for this book were much slower and less spectacular. You never know how the money flow will go, so it’s wise to be cautious in your investments.
3. Talk to someone who’s failed at a similar home business.
Yes, failed. If you’re considering selling, for example, cosmetics, chances are high you’ve heard all the advantages. What are the disadvantages? You could benefit by reading an article like one I found, “‘Top 10 Reasons to NOT Do Mary Kay’ Gets Debunked.” In it, a successful rep includes the points against selling for the company and then refutes them.
This kind of feedback is invaluable because, as I read the article, I could see how some women would enjoy selling cosmetics, but also realized I would hate it. It’s wise to hear both pros and cons before jumping into a home business.
4. Think about marketing your home-based business.
As I researched marketing for my three self-published books. I often heard the excellent advice, “Figure out a market first. Then write a book for it.” Fortunately, I had stumbled on a customer base before I understood this principle, but most self-published authors proceed with a book just because they’re convinced it will sell. That’s not good enough.
Do your research to see if you can find a similar product or service that’s selling like hotcakes. How is your idea like the successful one? How is it different? How does the successful entrepreneur market her product or service? How could you do so?
It’s Worth Planning Ahead When Running A Business From Home
It may seem that I’m discouraging readers from starting a home business. Well, yes and no. I’ve met dozens of starry-eyed wannabes who are convinced that all they need to do is to “strut their stuff” on eBay, and response will be immediate and lucrative. Home business rarely works that way.
I love being self-employed, and I recommend it. But before you make a serious commitment, I urge you to consider the time and money investment required, research the pluses and minuses, and construct a reasonable plan for marketing. Following these simple principles can make the difference between a failed, stressful experience and a successful, rewarding part-time (or full-time) career.
Rhonda is wife to Michael, a former homeschool teacher, and mother of four young adults. She’s authored five books—Real-Life Homeschooling: The Stories of 21 Families Who Teach Their Children at Home and four on saving money on groceries—plus 120+ articles. Rhonda also coaches students for WriteAtHome.com and teaches piano.