Before you go jumping for joy though, let’s take a walk through the steps that will help ensure that you’ll be creating a successful home business.
1. Assess Yourself
What are your strengths, talents and skills? Alternatively, what are your weaknesses? Are you crafty & creative? Detail oriented and organized or do you tend to run without a game plan?
Consider your personality traits as well. Are you a grumpy morning person? Someone who easily feels overwhelmed? Or perhaps you’re enthusiasm is infective and that goes right along with your self-confidence.
All of these traits, strengths, weaknesses and talents will play a huge role in the success of your home business, so lets work on choosing the perfect business for you!
2. Create a list of potential business ideas
No matter how weird, wild, wacky or even boring, write down every idea that pops into your head.
We’ll be going through this list in the next steps to narrow down your ideas, but try to jot down at least 10 home business ideas, and we’ll go from there.
Take your favorite things into consideration too: friends, family, hobbies, everything you love to do!
3. Scratch off the absolutely insane ideas
Those ideas that you know will cost millions to start, or that are simply out of the realm of possibility. You want something that is completely feasible, and won’t break the bank to get started.
Now wipe out any that aren’t going to work as a home business. If it’s going to require a factory to produce, then that’s not the business for you to start right now.
Hopefully you’ll still have at least 1 idea left on your list, and with any luck, you’ll have several. The next steps will put your ideas to the test and see if you can make one or more of them work!
IMPORTANT – Complete the following steps for each business idea remaining on your list! You may think that you have the perfect idea, and believe you can stop here and start up your home business right now. STOP! Please don’t run the risk of investing your time and money into a business that isn’t viable!! Let’s focus on being successful instead, and complete the following steps 😉
4. Assess Your Space
One of the first considerations is how much room in your home do you have for your new home business? How much space is going to be required?
For example, if you’re considering becoming a Virtual Assistant, you may just need desk and computer space with some room for office supplies. However if you’re considering creating and selling furniture, well.. I hope you can see where additional space will be required!
5. Financial Considerations
Assess your financial needs to ensure that you’re not going to put your current situation in jeopardy. Will your home business require significant start up income (ie: startup loan, 2nd mortgage etc), or do you have everything you need already at your finger tips? If the latter, please note there will still be small expenses for your website hosting, etc.
6. Find Your Angle – Where will your profit come from?
This can be broken down into two main questions:
A) How much will people pay for my product or service?
B) Can I make a profit from those sales?
Suppose that you’re a very tech savvy person who is looking at website design as a business idea. You know from personal experience that it will take you a minimum of 2 weeks to complete a website, therefore you feel comfortable at taking on 2 clients per month, and each of those clients will pay you $500. Doing the math, you can make a profit of $1000/mth less expenses – internet, website hosting etc.
That’s crazy money for a startup!!
When considering the profit angle, you need to do your research without just arbitrarily pulling a number out of a hat. What are other people charging for similar products or services? What is your actual cost (time + production) vs how many hours it will take you to complete the order.
If it takes you 25 hours to refinish a small table and you’re charging $200, when you do the math it works out to you earning only $8.00/hr which will include your time & materials. Your time has to be taken into consideration in order to make a true profit, so please don’t sell yourself short!
7. Create A Business Plan
Regardless of popular belief, you don’t just need a business plan to apply for a financial loan or assistance. Every home business should have a business plan in order to work out the viability of your home business idea.
For more information on creating business plans, have a look at Preparing Your Home Business Plan.
Once you’ve completed your business plan, if the results show that your home business idea isn’t feasible, then scratch it off your list. You can always revisit it at another time, but for the moment you’re looking for that key idea that you can turn into a successful home business.
— Wahm Dianne