Work Home Money

Step 1: Decide What Products or Services Your Small Business will offer

You want to start your own small business. A few steps can make it smoother for you. We will discuss about these steps here so that you can start your own small business without trouble.

The first of the steps to starting a small business is considering the following questions:

• What do you want to offer?
• Are you an expert? If yes, what makes you an expert?
• Do you have then necessary skills and education for starting your own work? Will you be able to compete in the marketplace?
• Does your product or service meet a need?
• Do you have a marketing plan? How will your business be affected by the economic condition?
• Is your product or service seasonal? Can you market it throughout the year?
• Why you want to start this business? Do you want to do it because you love it or just to make some money?

 Imge courtesy: http://noniche.ning.com/

Always remember “Do what you love, love what you do.” For the success of your online business, you should love it. It is going to be your livelihood and if you do not love it enough, you will not be able to get motivated to do the needed work.

When you are excited about the business, your customers will notice it. You will find customers enthusiastic about your product or service.

Step 2: Know Your Market and Your Competition

When you enter a business, you need to know your market and your competition. You need to understand the small business marketing concepts, the market you want to enter and the competition in the market, so that you can offer an effective value proposition for your business to you customers.

Consider a few things here:

• Who will be your customers?
• Will your customers be businesses or consumers?
• What will be the characteristics and traits of your “typical” customer?
• Is the market for product or service that you want to offer already saturated?
• Will your value proposition beat your competitors?
• How do you plan to differentiate yourself from your competition?

• What is your competitive advantage?

Step 3: Make Sure You Can Do the Tasks Needed Before Starting a Small Business

Before you start a small business, you will have to understand and consider that you will need to complete many daily tasks yourself or through others.  If you know that you cannot control these tasks or get someone to take care of them, then it is better not to start a small business.

We provide a few questions to you. These questions will help you to find out if you will be able to handle the daily task requirements of a small business. See if you can handle the day-to-day general tasks necessary for starting a small business:

• Organizing a workplace
• Setting appointments
• Managing people
• Ordering supplies
• Bookkeeping
• Marketing
• Filing
• Answering the phone
• Checking and replying to e-mail

If you can do all of them yourself, then it’s great. If you want to pay someone, and can pay then you can definitely get a help. Remember that most of the home businesses are managed by a single person. Most of the home businesses are started on a shoestring budget and small business generally don’t have substantial budgets to hire help.  So, there is a good chance you will need to do everything.

Think twice before starting out. If you can not handle all the mundane works of business, then probably you will not be able to find time out to do what you want to do.

Step 4: Make a List of What Needs to be Done to Prepare Your Home for Business

Once you decide that you surely want to start the business, start making a list of the things that you need to do. These are the things that you would need to do if you want to handle the business from your home.

If your business is not ready to provide what you want to provide, then think about what you need to do to get it ready.

• Will you need extra room for your office, inventory, equipments, supplies and others?
• Do you already have an area you can use for your office? Will you need to do adjustments to find space for your business?
• Do you need special conditions (preventive, climatic) for your inventory or finished products?
• Do you need to add a room or other area in your house for the business?
• While determining what you need, please keep track of your estimated costs which will help you to find out the needed cost later.

Step 5: Understand Legal Barriers to Starting Your Business

Check the laws that govern the types of business you want to start. Different countries and areas have different laws.

Check out the restrictions that your area may have. Follow the directions and the restrictions of the country, region or area has. In some places you cannot start a business at your home in any residential area. So it is wise to check before you leap.

If you are working with chemicals or with hazardous material, you may not be able to start the business at your premises or you may need to take preventive measures.

If you start a business, you may need to have some special exemption. Check the legal formalities to be done for your business. You may also need to have a license to operate a business.

Step 6: Review Your Small Business Insurance Needs

Insurance is very much necessary for you when you want to start a small business. Starting a business is very risky and by starting it, you expose yourself and your family to risk. So, get the necessary insurance before setting out on the journey of entrepreneurship. It will help you to handle the risk before it’s too late.

Consider a few things-

Will you need health insurance? If you need it then you should have it. Decide how you wan to get it and how much it will cost you. Decide the health insurance amount. If your spouse is working then you get your health insurance clubbed together with your spouse.

For chemical business or hazardous materials, when you need to store them, you will need property insurance for your business. Find out the type of property insurance you need. Get a small business insurance policy.

Makes sure, you understand about liability insurance. Liability insurance is very much necessary for you as a small business owner. Insurance will help you to get through tough time.

Also get auto insurance if you will get your car for your small business.

It is always advisable to find out the best small business insurance policies (because homeowners’ and auto insurance policies may not help you with your small or home business) for your business.

Find out the estimate for small business insurance in this step as it can be a major expense of doing business.

Step 7: Learn the Risks and Benefits of the Legal Forms of Business Organization

There are various legal forms of business organization. You can choose any form you want. It can be a sole proprietorship, a limited liability company (LLC), an S corporation, a partnership, or a C corporation?

To decide on a form or business organization that you want to adopt, you will need to go through various legal forms. The cost of different forms are different.  The forms will also affect the tax and personal liability condition of you. Different organization have different tax structure and different personal liability status for the debt and actions.

The choice of the business organization form will also determine the next steps that you need to take.

Step 8: Determine Your Startup Costs

Now in this step, calculate the startup cost for your startup. You ill need a certain amount of money to get it up and running. While calculating the estimates you made in different stages will help you to reach at a probable figure.

The costs will vary depending on your choices in different stages. Once you complete the previous stages, you will be able to find you the estimates.

Few other questions that will help you to find out estimates for your startup cost:

• Will you have to hire people like a lawyer or an accountant?
• Will you have the need to need to buy office furniture or equipment?
• Do you need starting inventory? What type of inventory will you need?
• Will you buy a franchisee or a business?
• Do you need to pay any license fee?
• Will you need to spend money on any construction? Again in case of construction costs, will you need to hire experts?

This step is crucial and so spend more time to make it more accurate.

Step 9: Consider Your Break Even Point, Your Cash Flow and Your Funding Options

In this step you need to answer several questions which will decide how you will do in your business:

• How much money will you need before the money starts coming in from your home business?
• Will you keep your full-time job while working on your home business? Is there another breadwinner in the family who can help you until you develop an income stream while you devote your full time to your business?
• What will your continuing expenditure for equipment, salaries and/or inventory?
• How many products will you have to sell or how many hours of service must you provide before you reach the break even point?
• How much money will be flowing in during the initial period?
• Where will the money come from? Will you borrow money or get the money from your own account or sell some investments and/or assets?
• Will you need a silent partner who will get you necessary working capital till you reach the break even point and start earning profit?
• If needed, are you willing to use your home to get the necessary finance for your business?

Answers to these questions will make sure you go through the right path. Once you know the answers, then you can start working on your startup plan. It will also help you to find out the sources of your fund and set the target startup date.

Step 10: Gauge Your Family’s Support for Your Home Business

You may disagree with us here. Some people think that you need to do it before.

Your business will sure be a big part of your family members’ lives and so you need to tell them what you want to do and what impact it will have on them. They will need to make changes to their lifestyle to accommodate your business, so they should know your plans well.  This is specially true when you have a spouse or a significant other or children at home.

Communicate your plans to them in clear words. Ask for support of your family. Their support will keep you going for a long time and will keep you motivated. Answer their questions, objections, issues and discuss with them.

Your business should not damage your family relationships. For that, you need to keep your priorities straight.

If everybody is happy in the family, then it will show in the business.

Try out these 10 steps and find yourself ready for the plunge.

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