If you are considering starting a home-based business, the following tips will help your venture survive and thrive.
1) Start small
The mistake some home-based business owners make when they start out is trying to grow too fast. Growth costs money. At first, you may have to make-do with less. You may have to live with your less than perfect office setup, an older but perfectly good desktop and laptop and the like. Starting your business on a shoestring budget and having the willingness to make do with what you have takes discipline. If you start your business, buy the latest desktop and laptop, purchase all new office furnishings and pay for advertising, you’ll chew through profit. While many of these items will be deductible come tax time, if your income is variable (and it often is when starting a home business), you’ll have cash flow problems that can quickly escalate and make it impossible to make ends meet.
2) Consider liability insurance
Remember back to when you worked for someone else? You didn’t have to worry about disgruntled clients suing you. No matter how unlikely you think it is, operating your business without some kind of liability insurance is risky. A law suit can be a home-based business killer. If a client alleges neglect or incompetence and sues for damages, what will you do? Although you may consider your business is at low risk, having some coverage is better than having no coverage. Consult with an insurance agent and explore the available options.
3) Have a website
It nearly goes without saying that you’ll need a website. There are some home-based businesses that operate without one, but even if your business’s website doesn’t generate sales directly, it will always have an indirect yet equally important benefit. A website legitimizes you and your business. Not having a website, particularly in this day and age, may seem like a warning sign to would-be clients. They may wonder why and may consider you and your business less trustworthy and reliable. A website allows you to: describe the benefits of your services or products, showcase your experience, makes a positive first impression, establishes you as an expert in your field, and saves you time in face-to-face consultation and Q ‘n A.
4) Get cheap SEO services or DIY
Once you have a website, either learn to do basic search engine optimization (the art of being found when people search for services online) or hire affordable SEO services. There are many guides online that teach the basics of SEO and if your website is built using WordPress, the job is made easier by using free plugins that do some of the work for you.
If you are doing it yourself, see:
- “SEO basics: 22 essentials you need for optimizing your site” from Search Engine Watch.
- “WordPress 101” from iThemes.
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5) Wear many hats
When you start your home-based business, it makes sense to learn to do as many tasks as you can. That means you’ll wear many hats including web marketer, writer, and even bookkeeper. You can make your life easier using applications that help increase productivity while keeping you organized. Flare Cloud Accounting is one such application. With Flare, you can create and send invoices, track expenses and profit and create budgets. Best of all, you don’t need any experience to use Flare. Sign up for a free trial.
For a list of apps that can help you wear many hats, see:
6) Know your tax deductions
Knowing what you can deduct can save you money come tax time. Consult with an accountant or bookkeeper and understand your tax obligations as a home-based business owner. See the following for help:
7) Track your time
Tracking your time is important because it will help you stay organized and have more free time. Time tracking will also help you create more accurate estimates.
- “Time Management Tips for Freelancers“.
- “How to Create an Accurate Estimate. Tips to Make Job Quotes Less Scary“.
8) Save for a rainy day
For most home-based businesses, there will be times when income fluctuates. In months when your income is good, it’s prudent to save some of your earnings in a rainy-day fund for those times when income dips or you are hit with unexpected expenses. Slowly accumulating a couple of months of income will protect you during lean times and give you peace of mind.
For more information about budgeting, see:
9) Don’t sell yourself short
When you are starting a home-based business, you’ll be tempted to price your products or services at low prices to attract clients. You may have to at times, but beware of falling into the trap of leading with price. If you do, you are setting expectations for clients, decrease your profits and chew through time that could be spent providing more lucrative services.
For more information about pricing, see:
- “Why Avoid Low Pricing as a Freelancer or Small Business?”.
- “Top 10 Skills Every Home-Based Business Owner Needs to Succeed“.
Home-based business owners need to network. Consider joining local business clubs. You’ll get to know others in your fields who may refer business to you. Ask any successful freelancer and they’ll tell you that they have relationships with other businesses offering similar services. The “competition” could turn out to be one of your best resources for referrals. When they are too busy or would rather not take on some types of work, they can refer to you, and vice versa.
Join a club and start networking: