According to recent studies, 9 out of 10 startups will fail. One of the primary reasons given for this failure is the business’ inability to provide customers with a product or service they need. The business owner’s failure to connect with the public can be directly traced to a lack of conducting pre-launch studies to find out what people are looking for. In addition, there are several other key components to starting a home-based business that any entrepreneur could benefit from.
1. Talk to your family.
Perhaps one of the most significant indicators of the success of a home-based business is the buy-in of the entrepreneur’s immediate family. Statistics show that entrepreneurs who fail to secure the support of their family are less successful—and even fail—because of this oversight. Before launching a venture that will occupy much of your waking time and energies, it is imperative that you have a sincere discussion with your spouse or significant other. Your partner must be ready to support you in your business both emotionally and financially.
2. Write down your plan.
Many entrepreneurs fail to act on one of the most important business tools they’ll need: a well-composed business plan. Typically the entrepreneurs who fail are the ones who feel as though a business plan is an unnecessary function or waste of time. Having a written plan can provide guidance and framework to the business’ growth and development, in addition to helping secure funding from reputable sources. There are dozens of resources available to help develop your business plan quickly and easily, and many small business resource centers offer business plan evaluation and assistance.
3. Follow the money.
While writing a business plan is the first stage toward establishing a home-based business, the next step is securing financing. With a well-composed business plan, it becomes easier to demonstrate to potential funders the future plans for growth and development. Some entrepreneurs seek financial help from friends and family, whereas some may look to small business lenders or banks. There is no cut and dry “correct” method of financing the beginning stages of a business—each method has both pros and cons. Where the money comes from is important, but it is less important than making sure your company has the necessary funds during its critical start-up stage.
4. Choose associates wisely.
Perhaps you have remarked, “We should go into business together!” to a friend. The idea can sound tempting—after all, if you’re friends, wouldn’t it make sense that you’d be good partners? However, hiring friends and family can be one of the worst mistakes an entrepreneur can make. Before making partnerships or deals with people who may not be a long-term asset to your company, evaluate the strengths and weaknesses both parties have. The most successful partnerships occur between individuals who complement each other’s skillsets. No matter how much you like someone, if they aren’t a good fit for your company, the partnership will be a source of frustration. Think of their long-term viability before making a permanent commitment.
5. Develop a plan for marketing.
A majority of start-up entrepreneurs launch their business and simply hope for the best in regard to marketing and promotion. For the business to last longer than a year, however, entrepreneurs must have a plan to generate interest and engage customers. Instead of relying on word of mouth and grassroots efforts, entrepreneurs should have a well-developed plan for staying in contact with customers, generating new leads, and securing the business of new clients. While less organized methods can work, a truly successful business must have a highly developed marketing plan.
6. Engage professional assistance.
Money is tight, particularly in the early stages of a home-based business. The entrepreneur is generally the “chief cook and bottle washer,” wearing many hats in an effort to save money while building the business. This approach may be effective during the very short start-up phase, but as the business begins to take off, most entrepreneurs will find themselves in over their head. Engaging the assistance of professionals will save both time and money, and allow the entrepreneur to focus on the important work of growing the business. CPAs, lawyers, social media managers, and other professionals can help the entrepreneur succeed by using their expertise to guide the business through the early stages of growth.
Starting a business can be an exciting but stressful time. Once you’ve decided to start a business, it is helpful to seek advice from experienced business owners in your field or from others who have successfully launched a home-based business. Following these six pieces of advice can help to ensure that your business will be one of the 1 percent that find success at home.