In this discussion, we are going to focus on issues pertaining to how to start a home-based business. Many of the most successful businesses were actually started it in someone’s home. We’re all familiar with the many fables and legends of individual starting multi-billion dollar enterprises in their basements and garages and certainly you can develop a highly successful business that is based from home. Of course, only a small and almost infinitely small fraction of the use of home-based businesses will become as successful as the next Microsoft were Facebook, however, you can develop a secondary income for yourself to the development of a home based business. In fact, over time, your home-based business may become your full-time job. When you are starting a home-based business, the most important thing to do is to first determine what type of business at you ultimately seeking to start. Many people, with the advent of the Internet, have taken the starting small e-commerce businesses were small blogs are able to generate a modest amount of income on a monthly basis. As such, we fully recommend that you harness the power the Internet when you are starting your home-based business. However, not all home-based businesses need to be based on the Internet or have a nationwide presence. For instance, if you are very good with numbers and have a strong background in bookkeeping, then it is very common for you to open up a part-time bookkeeping practice that is based solely out of your home.One of the downsides to opening a home-based business that operates with local clients if they can come off as unprofessional that you simply work out of your home as it pertains to the services that you render. As such, you may want to work directly with the client at their location or providing services such as bookkeeping or other personal services that do not necessarily need to be rendered within your home. Over time, you may want to be to able to afford a small office space that will allow you to give your business and more professional look as it pertains to working with local clients.It should be noted, on a side discussion, as it pertains to financing a small business it is somewhat typical. The small business administration typically does not allow for loans made to home-based businesses. This is primarily due to the fact that one of the reasons why the small business administration was created was so that traditional businesses could be launched and individuals would hire other people within their small business facilities. As such, you may be an excellent candidate for a SBA loan however you are going to need to move into a traditional facility before you’re able to receive this type of financing. However, there are a number of other types of financing methodologies available to you. This may include using some of your own savings, using some income from your 401(k) or IRA accounts, taking out a personal loan, using credit cards, or working with a potential investor that can provide you with the financing that you need in order to launch a business. Of course, there is no proper way to ever play in the business, there are a million ways to skin a cat, and as such you may want to tap some unconventional means as it pertains to obtain financing for your home-based business. As it pertains to using credit cards or personal loans in order to finance your home-based business, this can be a very expensive endeavor. Most personal loans are unsecured by any type of tangible property more tangible asset typically has a substantially higher interest rates in the back associated with a secured loan. In most cases, your interest rate can vary anywhere from 9% to 20% per year depending on your overall credit score. As such, it is absolutely imperative for use loan financing in order to start your home-based business recommend that you very carefully to all potential financing options for using personal loans or credit cards. In time, there are other types of lending facilities that you can use as it pertains to receiving the financing that you may need on the ongoing basis.After you determine which type of home-based business one a start, it is time to start the preparation of your business plan. Here, you’re going to want to create a blueprint of how you intend to provide your services or products the general public, how you will integrate certain procedures and protocols into your day-to-day activities relating your to your home-based business, developing a well focused financial model that has a profit and loss statement, cash flow analysis, balance sheet, pregame analysis, business reaches page, and general assumptions page that will be used in conjunction with your company, and a detailed overview of how you intend to market your business.As we discussed before, you can use the power of the Internet to market your business, even on a local level areas many home-based businesses are now also turning to popular social networking websites such as Facebook, Flickr, tumbler, and other popular portals in order to get the word out among people they know. You have a number of contacts within your local area that have a specific need for a specific type of service then you may be able to reach out to them directly by being able to directly contact them via e-mail and through the affirmation social networks. In fact, we strongly recommend that you create a Facebook page and work-related social networking page that showcases your home-based business in exactly the services that you provide as it relates to your company. If you are engaging in e-commerce operations, then it is extremely important for you to invest heavily in promoting your business through social networking media, search engine optimization, and pay per click marketing. In time, you’ll find a number of people are able to find your e-commerce platform very quickly and that your infant every turn over rate will be extremely high. Although this is somewhat of a general article pertaining to how to start a home-based business, you are, again, engaged in the business of selling products on an e-commerce basis than we strongly recommend that you also use very popular third-party selling platforms such as eBay and Amazon so that you are able to, again, had a very brisk inventory turnover as it relates to your overall operations. In the following, that at the onset of your home-based business operations, you are typically able to sell more of your e-commerce-based merchandise through Amazon and eBay versus through a proprietary e-commerce site. Additionally, as it relates to e-commerce, these websites often charge minimal fees as it pertains to showcasing the products that you have for sale to the general public. As such, if you are selling products that you are either acquiring or producing on your own that you may want to check out this type of third-party sales platform in order to further your sales as time progresses. Of the utmost importance that you developed a very strong marketing plan especially to if you are engaged in e-commerce selling activities.Relating to our discussion as it relates to financing ongoing business operations, once you have established your business then you may want to consider the possibility of taking credit cards. If you are heavily engaged in e-commerce, you can usually secure a line of credit based on your amount of money that is coming in through the credit card receivables that you receive. For instance, if you operate an e-commerce website that generates $10,000 a month in revenue then you can typically obtain a credit line equal to approximately $10,000-$20,000 depending on the specific lender. This is commonly known as merchant financing and it can be a very good way for you to manage your cash flow on a month-to-month basis as you plan on starting a home-based business. However, unlike in SBA loan that were conventional business loan, merchant financing based on credit card receivables is typically very expensive. As such, it is strongly recommended that you use this type of marketing sparingly as it does cost a significant amount of money. Typically, work in financing is approximately the same interest rate costs associated with a personal loan or credit card.Also, you’re going to want to think about whether or not you shooting for your business or create a limited liability company to manage your business operations. If you do decide to incorporate create a limited liability company then you will have the ability to create a bank account in the company’s name, and don’t conduct business under the company’s name, and have that company almost act as a third-party as he progressed business operations. Additionally, there are many tax benefits associated with incorporating as you will be able to more effectively receive and deduct certain expenses for your home-based business. On a side note, and home-based business should ever be started for tax savings purposes. In fact, the IRS has cracked down substantially on individual entrepreneurs have created a home-based business solely with the intent to write off a substantial amount of their ongoing living expenses were ongoing business expenses. As such, you need to ensure that you are operating this as a legitimate part time business it is simply based out of your home. When you’re starting a home-based business, we strongly recommend that you have a certified public accountant or tax attorney work with you so that you can properly plan out how certain normal expenses within your home will be deducted if you were Corporation or your limited liability company. Of course, you do not necessarily need to start a corporation or limited liability company in order to larger business operations. At the onset of operations, you can decide to work as a sole proprietor which means that ultimately everything that you do as you conduct business is through you as an individual and not as appropriate. However, with this comes the risk of unlimited liability if something should happen or if you are sued. For instance, many business experts often recommend that a individual business does incorporate into the fact that it should something go wrong be litigating party can typically only go after the assets that are held by the corporation. However, if you were acting as the sole provider, any leading party can come after all of your personal assets including your home, vehicles, retirement accounts, and other issues and assets that you may have been held by your person. As such, you should make a determination as to whether or not you will be engaging in any type of activity or selling any product that ultimately could have some potential for you don’t wind up in court for one reason or another. Again, we always recommend these speakers with attorneys for all of the advice as it pertains to these matters.This business can be a fun activity and certainly can provide you with a very good source of secondary income for the ability to eventually turn your home-based business into a full-time job. Again, in summation, you need to always ensure that you are starting a home-based business for the right reasons. The wrong reasons, as we discussed throughout this article, include simply starting a home-based business with the intent of paid tax deductions. The best reasons for starting a home-based business are typically because you want to have a business that provides you with ancillary income that this is your passion and that you want to create a full-time business out of it in the future.The other thing that we always discuss, and recommend, you keep a very reasonable and levelheaded and reasonable as he progressed through starting your home-based business.
Business Checklist: Define Your Product or ProductsWhat is it you are actually selling? Is this a physical product that has to be packaged and shipped, or an “Information Product” that must be downloaded?Physical Product
How will it be manufactured?
How will it be shipped?
What packaging is necessary?
Are there any restrictions on content?
Are there any regulations that control this?
Will it be manufactured in house or outsourced?
Will I maintain stock or will it be custom made per customer?
What materials are necessary?
Where will I get the materials?
Will the product be fully assembled or in kit form?
What user instructions are necessary?
What required warnings must I include?
What patents for copyrights might be necessary?
Will the product be licensed?
Who will be my primary suppliers?
What is the warranty?
What exactly is the product line selling?
While the product be available in online?
Will the customer be able to download the product?
What copyrights are necessary for that product?
What rights does the buyer have with the information product?
How will enforce the copyright?
Will I sell this product to others for resale?
What components are with the information product?
Will the product be a subscription product?
Only online product also be available on CD/dvd or a physical package?
Other product be a computer program?
Who will do the program development?
How will all upgrades be handled?
What is the warranty?
Business Checklist: Determine the Market Geography and Demographics for Your Products/ServicesBelieve it or not, just because your business is primarily on the web, you must still consider the geographical considerations for your business. Rather than thinking in terms of physical location and distance to customers, you must now consider the international implications of doing business on the web.
In what countries will you be doing business?
Is your product of a legal to sell in all countries?
What are the import and export restrictions?
What countries do you not want to do business with?
What will be your base currency?
How will currency exchanges be handled?
What are the tax implications of international business?
Do I need to have a presence in every country that I market my product?
What are the business reporting requirements for each country I do business with?
If sued, will I need to go to court in that country?
Business Checklist: Determine Prices for Your Products/ServicesEverything for sale is not $47 with an up-sell of $97. There is actual competition in the marketplace, because the marketplace is broader than just the internet. Before you can determine prices, you need to understand your target market and tangential markets that may have an effect on how you price your product. A more important question is. “What is the customer’s perception of the value of your product and what you think that customer would be willing to pay”? Another question to ask would be “What would the customer have to pay or what would it cost this customer if they did NOT have your product?”
Market research. What are the prevailing prices for similar products and services?
What makes your product unique? Why would someone want to pay more for your product?
What are the costs of using your product?
What are the benefits of using your product?
What are the benefits of using your product as opposed to a competing product?
Is this a product that your customer would ask for or must you convince your customer that he needs this product?
Who is your competition?
Business Checklist: Determine Image You Want to Convey (in Light of your Target Market)How to achieve that image though advertising, business cards and letterhead, brochures, office/store appearance, your appearance, etc.)
How many different types of exposure would you have with your customers?
Will you have face to face contact with your customers?
Will you conduct webinars for your customers?
Who would you want to be associated with in business that will give you a better image?
Business Checklist: Draft a Marketing PlanInclude the types of marketing, advertising, and promotions strategies you will use to reach each of your target markets.
Videos and YouTube
Business Checklist: Create Customer Order Collection MethodAt some point you are going to need to take orders from customers.
How will this ordered be handled?
Who will handle the orders?
How will the orders be fulfilled?
What forms are necessary?
Will orders be taken over the web?
Business Checklist: Join Applicable Trade and Professional AssociationsWhat trade associations or professional associations would apply to your new business?
How do you engage with those associations?
How much does it cost to be part of those associations?
What kinds of time commitments are required for these associations?
Where do the associations meet?
Business Checklist: Investigate the Cost of Advertising in Various PublicationsBelieve it or not, the local Yellow Pages may still be a viable channel for your advertising. Who else?
There are many yellow pages knockoffs out there. Which ones are worth subscribing to?
Business directories can provide an online presence and also free or low cost advertising.
Newspapers have gone, electronic. Consider placing ads in the local newspaper which will also give you an electronic presence for your news releases
Determine what activities in your company would actually warrant advertising or news releases.
To determine what prevents you can participate in that would give you advertising exposure.
What is the cost to participate in those events?
Business Checklist: Define Web-based Marketing and Advertising StrategiesWeb based marketing is not all “viral”, in your face offers. Again, your marketing and advertising strategies must reflect the image you wish to project. That image could be blatant, painting you as a 2 AM car salesman or infomercial spokesman, or could be subtle, intellectual, informed, and business like. Each approach has its merits and downsides. The one thing you must protect is your image: how OTHER PEOPLE see you.
Which internet mediums will you pursue?
What are your goals of Internet Marketing?
What is the audience you’re attempting to engage?
What is the frequency of contact?
What is the cost of this contact?
How would you test the marketing mediums?
Business Checklist: Draft Sales LiteratureSales literature reflects not only your image but the image of your company and the image and perception of your products must be in line with those desired profiles.
Should you engage a professional image consultant?
Should you engage professional designers?
Should you outsource your literature distribution?
Business Checklist: Determine Need for Sales Force (In-House or Outsourced)Do your products warrant an in-house or outsourced sales force?
What channels will you use to market your product?
We’re product be direct marketing to customers?
Business to business?
Big box retail?
Will your products be distributed to other channels?
This is just a memory jogger for you, to give you a start at creating an individualized Marketing Plan. In my experience, the entrepreneur is the visionary, but is probably too close to that vision that it is best to engage a third party, professional facilitator to help him answer these questions. The entrepreneur is generally so involved in the day to day fire fighting that they might gloss over the necessity for the level of detail required to answer these questions.Unfortunately, the Marketing Plan is only one part of the whole package of business documentation that should be completed BEFORE you hang out a shingle. If your business requires funding from a bank, venture capitalist, or any other reputable source, the first thing they will ask for is documentation that shows you are a viable business, you have the proper business structure, licensing, and permits, have filed the appropriate statutory and regulatory documents, and have done your due diligence in creating a solid basis for your business.Due to the detail necessary, and to be sure your business documents reflect your image in a professional way, you should consider engaging the Magic Triangle of Advisors:
A Business Consultant
I always add one more to this list if your business infrastructure is dependent on any web presence, servers, applications, PC hardware and software, tablets, and smartphones:
An IT Consultant
It is critical that these advisers have open lines of communication, and it is clear as to the responsibilities each is charged with to create the best singular outcome for you: a successful business.
In these tough economic times, it is more important than ever to utilize these small business marketing tips to ensure that you get the most out of your marketing and advertising dollars. Being aware of critical data such as how much you spend to acquire each customer and where that customer comes from is no longer a luxury but rather a matter of survival. You must have systems in place that will record and track this type of information so that you can determine which of your advertising and marketing methods are producing the best results for your business. This type of information is not always obvious because of the number of factors involved, so you must rely on written data to better assist your analysis.Tracking Your AdvertisingOne of the most important business marketing tips you can implement is to have your staff politely asked every single prospect how did they hear about your business. Every time someone calls into your office or enters your business, your staff should be asking “How did you hear about us?” I also suggest that you take it one step further, if appropriate, and try to get a little bit more information.For example if they say I heard an ad on the radio you can ask “Do you remember what station it was?” or if they say “I saw an ad in the newspaper [or magazine]” you can ask “Do you remember which one it was?” Some people will not remember exactly where they saw it or don’t want to be bothered telling you, but even if you got that additional data only half the time, you would still be ahead of the game. This is particularly useful especially if you’re advertising in multiple places using the same type of media.Tag Your AdvertisementsAnother business marketing tip to help you track your leads is to tag every ad with a unique discount code. For example, you could say something like “Mention coupon code ABC and receive 10% off.” An alternative to this would be to have some fictitious extension as part of your phone number to receive a special offer so the caller would ask for extension 123, and your staff would respond “I can help you” and would record that number (say, on a spreadsheet) which would be linked to a specific ad or TV spot. Of course all prospects would still receive the same offer regardless if they remembered the specific code or not but you would be surprised how many people would make it a point to remember exactly where they saw the advertisement and what the code was in order to receive the additional bonus or special offer.Prospects Versus CustomersAdditionally on your spreadsheet, you should also be tracking whether that prospect converted into a sale or not. This is vitally important because you may be getting lots of responses to one particular type of marketing or advertising, however you may find that the majority of your sales are actually coming from some other ad or medium. Tracking your responses is certainly an important part of your overall marketing program. Ultimately however, you are only interested in where your sales are coming from. Obviously you want to invest your advertising dollars where they will produce the greatest return.By implementing these small business marketing tips and making them part of your normal operations, you can begin to see increased profits in your business and more effective advertising. You can also gain a strategic edge in your marketplace because most of your competitors will not be employing these methods.