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| A Home Based Business Survival Kit No 2 |
This is the second of three articles on starting a new home based business. The first article Home Based Business Survival Kit 1 is a self evaluation How can you be sure that starting your own business is right for you? This next article is about the basics of setting up your home based business. How Do I Get Started
The decision has been made.....Yes I am right and ready to get into business for myself. You've chosen a business that interests you, fits your character and is potentially profitable. You're excited and apprehensive at the same time. So what's your next step?
Set Up Your Business Plan.
Your first question may be: What is a Business Plan? My first business began with an idea. I needed to give my idea some substance so I started to write my ideas down on paper. This was the beginning of my business plan. A business plan helps you to define your business. Jim Rohn says "Always start with the end in mind." You need to know what you want to achieve and what your business will be like when it is up and running. Your Business Plan helps you to look ahead, allocate resources, focus on key points, prepare for problems and opportunities, plan for those unforeseen complications and help you make good business decisions. A builder won't begin construction without a blueprint, eager business owners shouldn't rush into new ventures without a business plan.
Your business plan can be divided into three main sections.
1. Finances
2. Marketing
3. Management
Finances.
Where will you get the financial resources to start your business? One of the main reasons that small business fail is because of insufficient finances. You need money to start any real business. I'm not a financial advisor but these are some very simple principles that I have used in the past.
1. Work out your running costs for at least 6 months and make sure you have enough money put away to be able to operate, even with no income coming in. Always be conservative with your estimations. Double your potential out goings and halve your projected income.
2. Keep good books and that's where your accountant comes in. There are many simple accounting software packages on the market but it helps if your accountant is using the same package so that when you send in your books for tax time it is an easy process for your accountant to work on. It will save you heaps of money in the long term.
3. Keep your finger on the financial pulse of your business.My wife and I have regular finance meetings to keep an eye on our spending and income. Sue is my accounts manager. Because we run a home based business ourselves we know that it is very important to differentiate between our work time and family time. At first we found it difficult to make unemotional financial decisions because we were husband and wife. We would bring in baggage from our family life into our business life and ended up having huge disagreements over finances. We had to separate our family relationship and our business relationship so we would literally put on two different hats. Sue wore a hat with Accounts Manager written on the brim and I would have Marketing Manager written on mine. It might seem a little extreme but it worked. We were able to focus on the work at hand in a much more objective way.
Marketing.
To succeed, entrepreneurs must attract and retain a growing base of satisfied customers. Marketing programs, though widely varied, are all aimed at convincing people to try out or keep using particular products or services. Business owners should carefully plan their marketing strategies and performance to keep their market presence strong.
I've broken Marketing down into 4 parts
1. Identify Your Opportunity.
You should have already carried out this part of marketing when you identified the product or service that you intended to sell. Many people think marketing is just selling. It's the job of marketing to decide WHAT to sell in the first place. People must want what you are selling or they will never by. You can have the best product in the world but if nobody wants to buy you will go broke very quickly. You need to research your market, find market gaps, trends. Look at your competition and their product and marketing strategies.
2. Look at Your Competitors Marketing Strategy.
You and your competitors will be competing for the same customers. The job of marketing is to decide how to create a strategy that will give you an advantage over your competitors. Don't bury your head In the sand and think you have no competitors....you will have. Look at what marketing strategies they are using and try to be different.
3. Putting Your Product in Public View.
Marketing is to create demand for your product through advertising. To let your potential customers know about your product and where to get it. To show the values of your product over your competitors.
4. The Sale.
The ultimate goal of any business is to make money. If your marketing is done well the sale is just an exchange of goods for money. The sale can complement and enhance the marketing strategy so that the customer is happy to part with their money.
Operating your business.
Working from home sounds great and it has many bonuses. Not having to commute, working your own hours, not having to get dressed up everyday for work. Those are some of the good things but there is always a trade off. We need to be aware of the down side of working from home as well. You are on your own so you won't get any interaction from others. You don't have a boss watching over you so it is easy to not work. There's no one to pick up on your mistakes so the buck stops with you. You won't be picking up a regular wage every month. So what can you do to maximize the advantages and minimize the disadvantages.
Beating the Isolation Factor
This is not always seen as a problem at first but it can become very lonely working by yourself. It is sometimes difficult to maintain motivation when you are not having that interaction with others that most people get when working in an office or factory. There are many ways to counteract this isolation such as, joining a networking group, meeting up with other local small business owners or even a short walk around the neighbourhood or a visit to the shops can break down that feeling of isolation. It doesn't need to be all work and no play. A lunch or coffee date with a friend is a great way to banish boredom.
Be Your Own Boss.
When there is no boss looking over your shoulder, work is easy to do but it's easy not to do. I have found the best way to overcome this problem is to be organised. It is best to have a specific area set aside for working. I turned one of my bedrooms into my office and I went to work each day by walking from our living area into my office. Set your self daily tasks to be completed. Never finish your day before you have planned the next. Write a to-do list for the next day. Try to keep the list to three to five things you would like to achieve that day. If you don't finish one of those tasks put it as number one for completion the next day. There's nothing better than walking into your office and having your work already organized for that day. When you start a new business you will have to learn new skills. You don't have a foreman or boss training you. You will make mistakes but don't let them stop you from reaching your goals. Even the most successful business people make mistakes, it's how you handle them that can make the difference between success and failure. The best way monitor your output is to develop your own business tracking sheets. I developed a simple excel spreadsheet, listing the areas of marketing, sales and expenditure. Once a week I would give them a quick glance for any obvious problems but every month I would analyse them in detail. It's very important pick up on problems quickly before they cause too much damage. Minimise your chance of failure by keeping on top of mistakes and fixing them as quickly as possible.
You are now ready for business. You've chosen your products. You know your marketing strategy. Your office is set up and your waiting for your first sale.
My next article will help you stay in business, be successful and help you avoid being just another statistic.
(c) Copyright Ralph Montague
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