How to Run a Successful Home Business

The idea of a home business is attractive to many people. You may be searching for a way to combine work and parenthood, struggling to find employment, or be unable to work outside the home due to illness or disability. Or maybe you're just at a point in your life where you want to escape the drudgery of working for The Boss. Whatever your reason, a home business can offer the solution - but only if you approach it the right way!

Before starting any business, you must have a business plan.  It doesn't have to be complicated - it's just a description of the business, plus a financial analysis including your costs and likely income. Writing it all down, and updating it as you do your research, will help you set your pricing and see where your risks are. However, one section that's often overlooked is "Objectives".

That's because for most businesses, the objective is assumed - to make as much money as possible. If you're starting a home business, of course you want to make money - but you may also have other objectives which are just as important. For instance, you may be willing to make only half the potential profit, so you can have more free time.

So think about it - what are your objectives? Profit? More personal time? More time with your partner or children? Less stress? Flexibility? Whatever they are, make sure you factor those goals into your business plan.

One of the most important aspects of your business plan, and the one most people struggle with, is to assess the potential profitability of your business idea. 

Even if someone has promised you a business idea will be profitable, don't take it on trust. Do your research first! For instance, there are plenty of people who will tell you that blogging, article writing or affiliate marketing are "easy money" - they're not. Those people get a commission if you sign up, so they have a vested interest in exaggerating the results. So for any internet money-making scheme, Google the name of the program and "scam" to see what comes up - you may be surprised.

If you're planning a "bricks and mortar" business, where you'll be selling a product or services locally, then you can do some real market research on the high street.

• Pose as a prospective customer of your local competitors - that will allow you to see what they offer, ask about pricing etc.
• Take a clipboard into the street and do some "customer surveys". Create a questionnaire to assess the demand for your product or service. Try to keep it short - 2 or 3 minutes is enough. Be sure to thank participants afterwards - a card offering a discount is a nice touch.
  
• Interview entrepreneurs already in the business (see box on right) - but not locally! You'll get better results contacting people outside your area, who won't see you as a competitor. Make sure you send them a thank-you note afterward - establishing relationships with related businesses can be worthwhile.

The best way to maintain your focus and ensure you devote adequate time to your business is to create a dedicated physical and mental space.

• Your "office" may be as simple as a desk in the corner of the lounge, or it may be a separate room. it really doesn't matter, but ideally it should be a space other members of the family don't use. If you have to share a PC, set rules about who can use it when.
• Set aside space for your files and documents, separate from domestic paperwork.
• Decide what your hours of work will be. Write them down. Create a diary, so you can track your hours and schedule tasks.
• Create "start" and "end" rituals. This may sound silly, but it's probably the most important thing, because these rituals are critical to separate "work" and "home" psychologically. For instance, you might start your work day with a half-hour walk, or reward yourself with a coffee and cake at the end of your work session. Or you might simply change your clothes.
• Make rules for the "office" part of your day - e.g. no housework, no personal computer use.
  

Once you've started your home business, one of the biggest threats to success is "creative avoidance".

There will be times when you'll hit a thorny problem or a difficult hurdle in your business, or things just start to get overwhelming. In an office, you'd take a short break and get back to it - but at home, it's much too easy to find some pressing domestic issue that needs attention. Gradually, you'll find your time getting more fragmented and less productive because of the constant temptation to attend to other things - and that's a recipe for business failure!

For some of us, it's not creative avoidance that's the problem - it's just plain laziness! Working from home means you can get up late, linger over breakfast or stop for a cool beer in the afternoon. That's fine if you make up the time elsewhere - but not otherwise!

An often-overlooked aspect of a home business is marketing. You don't have a shop that people can walk past, so no one will know your business exists unless you publicise it. Just creating a website won't get you noticed - a website needs to be promoted too.

Again, if you're selling to local customers, there are some fairly low-cost things you can do.

• Business cards - you'll be surprised how often you can hand them out.
  
• Car stickers - magnetic ones you can stick on the door, or window/bumper stickers. Display them on your own car and see if you can persuade your family and friends to use them too!
• Posters in your home window or on your gate, if you're willing to see customers at your home.
  
• Postcards - ask coffee shops or related businesses to display them.
• Talk to related businesses and offer commissions for referrals.

If you're tempted to try direct mail or letter drops around your neighborhood, bear in mind that the average success rate is only 1 or 2 customers per 1,000 leaflets.