Starting a business from home can give you the freedom and work-life balance that you crave. However, getting a new venture up and running is never a walk in the park. You need lots of effort and dedication to thrive.
If you aren’t careful, or go ahead without knowing what to expect, you can cause yourself considerable stress and frustration. In this article, we present four mistakes to avoid when you’re starting a business from home, to help guide you safely along the path.
Not having a concrete plan
Planning can seem like a tiresome task. However, having a successful business usually involves more than just coming up with an idea and running with it.
The planning phase is when you sit down to do your research and set yourself clear goals. This step can go on to guide your other future efforts with things like branding, operations and marketing.
Here are a few tips regarding planning:
- Even if you’re not seeking funding, it still makes sense to put together a proper business plan that includes financial projections.
- Check the feasibility of your idea with your target audience, and familiarise yourself with your competition.
- Read anything and everything you can find on your business sector. It’s also worth preparing for the future by looking what you will do as and when the business is profitable. Check out the 10 top investments for young people or similar topics for ideas on this.
- Plan for both success and failure, and ensure that both of these outcomes are clearly defined. It makes a lot of sense to have a “plan B” ready in case you don’t achieve your initial objectives.
Having insufficient funding
Whatever business you’re starting, you’ll need enough funding to launch it smoothly. Cash flow can be particularly challenging in the early days. Some businesses, such as blogs and authority websites, have very low running costs, but in other cases you may need to borrow some money to get started.
If you create a business plan, as advised in the previous step, it should help you see when you might feel the pinch, and how much funding you could need.
If you’re concerned with your credit score, then there are ways to improve bad credit to help you get the financing you might need.
Here are some things to consider when funding a business from home:
- The cost of equipment
- Energy bills
- Initial inventory and shipping costs
- Funding for contractors or employees
- Reserve funds to cover cashflow
- IT and internet costs
Charging the wrong rates
Getting pricing right is crucial is any business. It’s always a delicate balance between customer satisfaction and ensuring profitability.
Entrepreneurs who don’t do enough research often end up underpricing their products and services. There’s also often a temptation to do this to “play safe” and ensure that you generate income, not realising that there’s not truly enough profit coming in to keep the business going. On the flip side, over confident pricing could scare customers away.
Helpful ways to determine pricing include:
- Conducting thorough market research and seeing what your target audience expect to pay.
- Studying the competition, and considering where to pitch your services.
- Imagining yourself as the consumer of your own goods and services, and thinking about how much YOU would be willing to pay. If YOU wouldn’t be willing to pay more than $100, then don’t set the price at $150!
Failing to separate home and work
Boundaries between home and work can easily become blurred when your business is in your home. It can be hard to know when to stop (or perhaps start!) work, and having the “office” right there can sometimes be bad for family life.
This article discusses some strategies to ensure you properly balance work and family life. No two families and no two businesses are identical, so there are no hard and fast rules. In most cases, a combination of a specific work area and some firm boundaries around working times go a long way to start things off on the right foot.
Launching a new business is tricky – from the planning to the execution.
If you want to succeed, it’s essential to avoid the most common mistakes that many make when starting a business from home. When you consider your next venture, make sure that you keep in mind the tips provided above.