|Stop! Before you start your home based business, there are a few questions you should ask yourself in order to determine how prepared you are, or what areas you may need to work on.
Regardless of which business you get into, there will be work, time, and probably money up front involved. Often, you won't see profit right away, so please take that into consideration when you are planning how much money you'll need to start-up.
I recommend checking with your local community college and Small Business Administration for special seminars or classes about starting a small or home based business. Usually, the SBA gives these classes free of charge.
Have you done your planning?
Take the time to write out a mission statement, or business plan, even if it is for your own use...this is your road map and will keep you focused on your goals. Have you taken the time to sit down and think through each aspect of your business and what it will take to get started? Planning your business on paper can help you to foresee any future problems, and help you decide beforehand how you will deal with them.
You will definitely need a business plan for any bankers or investors you may need, because they want to know exactly what they are lending you money for, what you're going to do with it, and how you plan to pay it back.
Be realistic about your abilities related to your business.
Are you knowledgeable about your product/service? Does it interest or excite you? You are likely to be more successful in a business that you are enthusiastic about. Do you have natural aptitude related to your business? Or could you use a refresher course? Are you willing to learn more skills that will help you operate your business? Don't choose a business that is impracticably suited to your abilities.
Do you know where your start-up money is coming from?
How much capital will you need? Be realistic when planning out your business's finances. Keep in mind that it will probably take a little more money to start-up than you think it will...there's bound to be costs you'll forget to take into consideration.
Will you make a profit? How long will it be before you will see a profit?
Are the legal and licensing requirements for your business, and any associated fees? Are there any restrictions or zoning laws in your area?
Do you have the time to start & run this business?
Demands on your time will be very high, especially at first, and some less important things may have to take a back seat at times. The house might not stay as clean (in fact, you can pretty much hang that up unless your family is impeccably clean ;o) and the odd jobs may not get done as quickly.
You will have to know how to prioritize demands on your time. Yes, you will be able to have more flexible hours, but you will certainly be putting in a lot of overtime!
For great time management tips, go here.
Will your product/service fill a need?
Is there a market for your product in your area, or can you create a demand for it? You need to take a realistic look around you and determine that people in your area really DO want what you have to offer. Don't get sold on a business that has no future in your area.
Do you know how you will market your product, and who you are marketing it to?
Do you know what kind of advertising is available to you and how to use it? Do you know who you are marketing your product/service to? Take a good look at your competition...they can teach you a lot about what to, and not to do. See how they are selling their products, and how much they are selling them for.
What will the legal structure of your business be?
Sole proprietorship, corporation, or partnership?
For more information on setting up the legal structure of your business, see Making It Legal.
Do you know how you will do the bookkeeping for your business?
You must chose an appropriate bookkeeping system to fit your business's needs, and be very diligent about keeping accurate records. Keep good records from the beginning, and it will save you a lot of time and trouble in the long run.
It is very important to keep your personal and business finances separate.
Having a separate business account also makes your business seem more legitimate, credible, and professional.
What will you name your business?
This is a very important decision, to be given thought. The name should reflect the image you want your business to portray, and should not give potential customers mixed signals about the nature of your business. This is especially true if you are starting an internet business. You want your business/web site name to closely resemble your product or service to make it easier for people to find you, and remember who you are. Do some brainstorming and write down all possibilities, then run them by family and friends. They can be very helpful in deciding which name best represents your business.