It’s no mystery that as technology continues to improve at a tremendously rapid pace, opening a home based business is becoming a more and more attractive idea. In fact, according to the Small Business Association, 52 percent of all businesses are home-based, and that number has been on the rise in recent years . With the innovative products and services they provide to consumers and the flexibility that comes with running a business from home, these ventures are presented with a great opportunity to thrive in today’s day and age.
With that being said, managing a successful home business is far from easy, and a great deal of them fail as a result of poor management and small mistakes that could have been avoided with a little bit of research on what some successful home business owners believe to have helped them most in the beginning stages. So, based on their stories and advice, here is what we believe to be the top 10 ways to be successful in your home-based business.
- Minimize your overhead.
While it’s true that making money is a key financial goal for running any business, keeping money should also be at the top of the list of continual goals. Craig Wolfe, founder of CelebriDucks, a company that designs rubber ducks to look like celebrities, believes this to be an often overlooked strategy. He emphasizes the constant risk of bankruptcy that comes with running a home-based business as, “ill-conceived overspending, especially in technology,” which occurs frequently in managing a business from home. For these reasons, be sure to monitor your spending to ensure the money going out is far less than the money coming in.
- A productive workspace does not always have to be at home.
Naturally as a home business owner, the majority of your work is going to be done from home, so it is crucial to establish a productive working environment; one separate from the distractions that can be presented in any home. With that being said, sometimes the home is not always the right place to work, and some people need to have a back-up location.
If being cooped up in the house all day, every day is going to make you stir crazy, consider spending a day at the local library or coffee shop – somewhere that will give you a different vibe than that of being at home without finding yourself surrounded by too many distractions. For example, trying to do work at your child’s piano lesson may pose some issues, so try and find someplace where the activity surrounding you isn’t going to steal your attention. Key takeaway: Variety in location can inspire you to act different, thus causing you to think differently than you would following the same routine – try switching it up sometimes.
- Marketing is KEY.
Don’t be afraid to promote the fact that your home business is from home. This is an important tip from Maria Rapetskaya, the cofounder of Undefined Creative, a home-based design and animation business. According to Rapetskaya, clients often like hearing the explanation as to why a home business works for them (i.e. low overhead).
However, word-of-mouth is just one part of ensuring your business is successfully marketed. It can be challenging, so expect to cough up some extra money to help introduce your product to the world because successful marketing is crucial for any business, but especially for one operating from home. This is a great example where spending the money can result in huge returns.
- Explore the cost-saving power of free or low-cost services.
While managing a home-based business naturally excludes the need to spend huge amounts of money on office space, that is really the only area a home business owner can expect to save money. Business services can run you up a huge tab on your monthly expenses, so consider exploring your options for free or low-cost services. Some examples include the implementation of Google Voice as a business phone line, FreshBooks, which is a cloud-based software often used for accounting needs, or Wave Accounting, which deals with professional invoices.
These are just a few of the many low-cost or free services out there that can help alleviate a tremendous amount of monthly marketing service expenses to further minimize overhead for your home business.
- Don’t be afraid to outsource.
Just because you’re starting a home business on your own does not mean you need to pretend like you’ve mastered all aspects of your business. Outsourcing can be a tremendously helpful way to alleviate some of the stress that can come with one person trying to do too much. Websites such as oDesk and PeoplePerHour are prime choices for those in the market for affordable independent contractors. These sites allow you to share your project and then watch contractors bid on it. You can also select the best-fitting freelancer for your business based on skills and budget requirements. I know, this sounds like a contradictory plan after extensively talking about lowering overhead, but this is another area other than marketing where coughing up the money can help any small business survive.
It’s natural that one person may not be able to do everything in this world, and making the decision to look for help can make or break a business. With that being said, try not to get ahead of yourself. If times are slow and you’re in the middle of a dull period, save some money by trying to enhance your skills by doing some of the work yourself.
- Set work restrictions.
Working from home can be tricky sometimes in that it’s hard to always remember that just because you’re home doesn’t mean you aren’t really working. To combat this issue, make it clear to your friends and family that you still have work hours just like anyone in an office, and ask that they respect that.
It is important however, that those affected by your earnings be kept in the loop, so consider sharing your business plan with those people. For example, it may be helpful to disclose child care coverage, double-amount of hours an independent venture may require, lack of paid benefits, or the lack of a predictable income with your potentially affected family and friends. Ensuring there is an understanding of your boundaries and of the circumstances associated with running a home-based business is crucial in maintaining a positive environment for working.
- Create a business-like environment tailored to your productivity needs.
The first step here is ensuring you have a separate space dedicated to work. Additionally, your computer used for business should be kept that way for the most part, and your office should stay your office rather than turning it into an extra play room or study hall.
In regards to decorations and furniture, that is really up to you as each person truly thrives in different environments. Some may prefer to be surrounded by a lot of stimulating artwork and furniture, while others may prefer simplicity. Some workers like a traditional work desk and rolling chair, while others may prefer to feel more at home in a comfortable environment. Whatever your style may be, use it to create the best space that encourages productivity, and do your best to minimize the outside factors that can come with working from home.
- Consider security.
As you’re marketing your business and it’s becoming more and more known to the public that it’s run from home, certain security measures should be taken to protect your assets. A good start would be to rent a post office box to use as your mailing address for your business. This is especially important if you’re typically alone during working hours.
Another option to consider is an in-house security system, which is always a good idea when considering the ways to keep yourself and your belongings safe. Definitely consider this security measure when you’re going to be away for longer periods of time such as vacation or a long night out. Purchasing a lock box for some of your work supplies and valuables would also be a simple way to keep those assets protected. General rule of thumb: No action taken to ensure the safety of your business is too extreme.
- Does your homeowners insurance cover a home-based business?
Insuring your home business is essential so you can be sure any type of damage done to your home office or your business assets can be resolved whether there is a robbery, or physical damage such as a leak or a fire. It’s important to note that many homeowners’ insurance policies do not include home-based business coverage. This is an incredibly important area you need to look into when you’re starting your home-based business.
If in fact your home business is not covered, which, again is likely, you may need to purchase a separate business owners policy to protect your business assets. Again, no measure is too extreme when it comes to protecting your home and your belongings.
- Utilize your customers as a silent sales force.
As you’re starting to promote your home business, word-of-mouth and referrals are key to expanding your client base. After receiving excellent service or after an effortless delivery of the correct product, satisfied customers are likely to spread the word to their friends and family about the great experience they had with your business. These initial clients are the foundation of your business and an important factor in the growth it could experience. Respect and appreciation should be shown to all customers to prove how much you care about providing the absolute best experience possible.
Offering superior customer service is key. You can also consider a means of thanking loyal customers whether you mail thank you cards, offer exclusive specials or any other expression of gratitude you deem appropriate. Treating customers well is one of the few money-friendly aspects of any business, and it also happens to be one of the most money-generating ones as well.
Keep in mind that most homeowners policies only cover your personal property and not your business equipment. More specifically, a typical Home Owner’s Policy provides only $2,500 in Business Property coverage. You could be paying for the cost of a theft of your business equipment and valuables out of your own pocket. Don’t want to take that risk? Contact Lindbergh for your home business insurance needs.
- SBA Office of Advocacy
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