Starting a home-based business is an alluring prospect for many entrepreneurs. You have the option to work for yourself, make your own schedule and do the kind of work you’re interested in. You can dress however you like, and your commute consists of walking from the bedroom to the office.
However, running a home-based business is not without its own set of challenges. Many people fail to realize that running a business requires thorough preparation and a lot of planning in order to effectively deal with those challenges. To help you on your way to self-sufficiency, here are six eye-opening challenges to consider when setting up your home office, as well as suggestions on how to meet those challenges head-on.
1. Insufficient Planning
One of the biggest reasons home-based businesses fail is that would-be business owners don’t realize how much work is required, especially before opening the business’ doors. Startups can be difficult to manage, especially when financial expectations and long-term goals are not planned for. It is important to prepare for and anticipate all of these challenges with research, reading and planning.
To avoid issues, create a business plan before you get started. It should include your mission statement, long-term goals, cash-flow expectations and more. There are many great templates online that can help you get prepared by thinking ahead and anticipating both the work required and the rewards you expect from your efforts. A good business plan isn’t just good for organizing your hopes and dreams. It’s also used to market your idea to potential investors and business partners.
2. Lack of Funds
A lack of funding can be a problem for any new business, let alone a home-based one. In addition to supplies, products and the general costs of running a business, even getting the proper licenses and budgeting for debt service can become complicated and expensive. While it can differ for certain companies and industries, a good rule of thumb is to have enough money available to conduct business for about five months without profit.
If you’re so inclined, try finding simple ways to raise the money, such as selling off unnecessary items in your home or storage. If possible, try to find another side job for a few months while launching your new business from home, until you are able to afford to work exclusively for yourself. Other options include finding investors or applying for a bank loan. However, you decide to fund your new business, research each funding option carefully to decide what is best for you and your organization in the long run.
3. Overwhelming Amount of Tasks
Running a home-based business requires preparing and filing permits, licenses, marketing plans, business plans and more. Even if you know everything you need to do, it can still be hard to know exactly to start. The overwhelming amount of tasks can be a turnoff, especially if you aren’t aware of what you need to file.
Get a mentor who can show you the ropes of running a home-based business, or find training classes to help guide you through the process. A good resource for researching permits and licenses is the Small Business Administration, which allows you to search by location and business type. Also, follow a thorough checklist to ensure you aren’t missing any crucial steps.
4. Lack of Focus and Productivity
You will need a lot of discipline to work from home and stay motivated. The opportunity to procrastinate can be quite big, enabled by friends stopping by, calls from family or mindless link-clicking. Along with these distractions, there is no one telling you what you need to be doing, so it can be easy to slack off and relax. There’s also no one to make sure you’re working on the right things or, for that matter, preventing you from getting lost in the details.
To combat these dangers, set daily goals that work toward your long-term goals. Make schedules for all of your time, and monitor how you’re spending your days. Use these schedules to see where you are wasting time and how you can spend your time more valuably. It may seem cliché, but there are apps for this. Also, inform your friends and family of your schedule and routine, and ask them to respect your business hours.
Many people starting a home-based business don’t have a background in marketing, so they tend to forget the importance of marketing their own business. Most people will assume that creating a social media account and a website is enough, while others may not do any marketing work at all. But home-based businesses are not a case of “build it and they will come.”
Research marketing tactics, make a marketing plan and stay updated on ways to market your business. Blogs are a great place to start, as are regular relevant contributions to your social media accounts. It is important to create content that is helpful and interesting for your target audience; you should also be responsive and give feedback when your followers leave comments.
6. Record Keeping
Bookkeeping and other tasks, like managing earnings and expenses, are not the most glamorous duties. However, keeping track of tax payments and invoices are a necessity in any business. It can be easy to neglect the paperwork associated with these tasks, especially if you are making money and busy with other work.
Stay on top of your record keeping by using bookkeeping or accounting software. You may also opt for hiring an accountant to help you, or you can take on a partner or a friend to manage these tasks for you. The fee associated with getting someone to help you out may very well be worth the peace of mind you’ll get in exchange.
The most important thing to remember is that, since you have no one to answer to, you must become great at managing yourself, your time and your resources. Achieving this might appear difficult, but a little knowledge and some discipline can go a long way in helping you achieve your goals. By being mindful of these hurdles, you can start your home-based business in the best way possible.