Eventually 40 million people need to read this article. That is the number of people starting or want to start their own home-based business. It is part of the American Dream. There are multiple reasons for wanting to start your own business. Financial freedom to do what you want. Working when you want to. Not having to rely on someone else’s decision, whether it is good or bad, that affects your financial future. Not having a boss telling you what to do.
People who want to start their own home-based business already know these benefits and strive to achieve them. It is often deciding what business to get in and how to get it started and profitable that starts stumping people.
The basic starting point is to ask yourself what you like and enjoy doing. Everyone has some interest. It is difficult to NOT find some type of way to spend money on that interest. If you spend money on it or know of people who do, there is a business there. If you are going to stay interested in you business, it must interest you. Otherwise it becomes another job. Make a list of the things you do in you spare time. If you go to a bookstore, what sections to you browse? If you have an hour to surf the net, what types of things are you looking at? The answers are where you should consider your business interest.
Now that you have some topics – what to do with them? There are many options. Regardless of the avenue you choose, remember this. It is always more difficult than you first imagine.
For example, many people say to blog about your favorite topics and put advertising space on the site. There is nothing wrong with this idea, but how much have you written in the past year? If nothing, it might be difficult to suddenly crank out 2000 words a week. Having an original blog is great, but now you have to draw people to it. Many people do nothing but work to bring internet traffic to other people’s blogs. It is a competitive situation to get eyeballs to your site.
We are not trying to discourage your dreams but want you to know and think through what you are getting into.
Maybe writing is not your thing. Perhaps selling goods on a storefront is more your style. eBay is a good choice and there are also many pre-written storefront applications if you want to go solo. eBay obviously has a built in draw of eyeballs to your storefront. Prices are competitive on eBay. Depending on your product, there could be other sites that have online marketplaces that offer better terms than eBay. Selling goods is more about getting with the right supplier than anything else. Once again, if it is something you have an interest in, the chore of finding the right supplier(s) will not be much of a chore.
You found a niche and know how to attain your revenue stream. You will need to put on the business cap to find cost savings or new revenue sources. Did you know the average grocery store profit margin is 2%? That is all. One needs to sell a lot of lettuce to make some money. Think for a second about why that is so small. Here are a few:
Facilities – Grocery stores are huge. The bills alone are tremendous. Look at that parking lot. Someone is paying property taxes on the whole thing.
Waste – Ever pick up a mushy avocado and put it back. So did everyone else. That avocado gets thrown away along with hundreds of pounds of other food. That is food the grocery store bought and lost their investment on.
Employees – you have walked in and seen people goofing off or working slow. They get paid as much as the efficient ones.
Advertising – that weekly flyer in the newspaper that is printed in color is very expensive.
We are not trying to tell people about grocery store economics, but these are good examples of how many tiny things add up. Controlling the little cost is often the difference between operating at a profit or a loss. Your business will offer you many opportunities to spend money. Hold the purse strings close and always ask yourself, is this needed now.
While we are telling you to watch the purse string, one thing worth paying for is the advice of people who have done it before. Often times, they do not want to give out the advice. Why would they? If it is working for them, the last thing they want to do is to have one other person in the marketplace using their hard won secrets.
A single mistake can cost you hundreds, if not thousands of dollars. Even worse it can cost you time. If someone is willing to help you learn from their mistakes, it is worth every penny.
When selecting an industry, think about how easy or how motivated new entrants can come into the marketplace. If you have an industry that many people do not want to go into because of some stigma – that is perfect. Take ticket brokering as an example. Many people will have an aversion to it because they do not want to be labeled a “scalper”. Regardless of some of the labels people put on it, the majority of ticket sold to popular events are done on the secondary ticket market. People have created their own barrier to entry. This translates into more market share for the people already there.
I have yet to see where someone started a business and out no money into it. Everything cost something. Even a domain name cost at least $10 a year. Hosting that domain cost even more. If you are selling something, you have to buy your inventory. “No money down” is a myth. The best way is to save your own money and start small. That is not always an option for many people. Between food and rent there is often not enough to save. If there is not enough to save in your budget, it is going to be hard to get any type of loan.
Here is a tip to get some seed capital. Make sure you at least declare your business as a DBA at the county courthouse or incorporate with the state. Most states you can incorporate far a couple of hundred dollars. All the credit card companies monitor who files these. It is a safe bet that shortly after you incorporate, you will start receiving credit card offers for your business. Keep in mind these are still at credit card rates, so you can get charged some high rates. If you truly believe in your concept and this is the difference between starting your business or not, it is something to consider.
The last thing on the to-do list is write it down. You need some type of business plan. It does not have to be a formal document and you might be the only reader of it, but it is helpful to think it through and put pen to paper. Some basics to capture in you plan are your product or service, who will buy it, how you are going to market, prices, where you are going to sell, your competition and your strengths and weaknesses.
We touch on many aspects of starting a home business. It is not exhaustive by any means. Any business requires extensive research and due diligence to get off the ground. By reading this you are demonstrating the all important first step, having the desire to improve your life and position.