The process of starting a small home-based business is different from launching a startup or another business in which you will have investors and employees. However, you still need to be organized and think the process through carefully. With the steps below, you can anticipate some of the potential pitfalls ahead and prepare for success.
Write a business plan
You might not need to convince investors or even seek out a loan, but you should still write a business plan. This can give you a blueprint for your business and help you think through potential obstacles. It can also help you clarify your purpose and goals, who your audience is, and how you will market to them. It doesn’t need to be particularly long, but you may be surprised at how much you can learn and clarify just from writing a few pages.
Take control of your finances
You can start a business on a shoestring budget, but you should still reduce your debts as much as possible and have some emergency funding set aside. This is a good time to tighten your belt a little and cut back on expenses when you can. You should not let student loan payments prevent you from becoming an entrepreneur, but you might want to look into refinancing them. Refinancing multiple loans with a private lender can give you a lower single monthly payment, and this can help with your cash flow as you are getting started.
Consider your employment status
As you are reviewing your finances, think about how much time you want to spend on your new business to start off. If you are already employed full-time, it might be a good idea to start slowly, build up a client or customer base, while still drawing a regular paycheck for financial security. This can take a lot of the pressure off your new venture and even allow you some room to make mistakes. After a few months or even years, you might want to transition to working for yourself full-time.
Prepare your home life
If you have a family or live with roommates, you will need to prepare people for your new normal. One of the major challenges you will face is people assuming that because you are home, you are not really working. You might be expected to take on extra errands or housework. While it might not be completely unreasonable to agree to toss a load of laundry in during a break or let the repair person in, you may need to set boundaries about what you can and cannot accomplish. This can be particularly trying with family in some cases, for whom you also need to make quality time available. A family meeting in which you discuss new expectations could be helpful.
Line up the professionals
Since you won’t have a legal, IT, or accounting department, you may want to talk to a few professionals who can handle tasks for you. Once your business is up and running, getting the word out will be important for future revenue. Paying a lawyer to look over contracts or an accountant to handle your taxes can save you a lot of money in the long run.