Did you know that, on the Web, 70% of home based businesses fail in the first ten months? For those of us who would like to start a home based business — maybe even work at home — that’s a very discouraging survey.
Does that mean that your business goal is doomed to unsuccessful? Far from it! Here are steps you can take that greatly multiply your chances of success. With a small time and a little serious study you can hit the ground running. Let’s start from the beginnings
The bright idea
To start, defiantly, you need to come up with an vision. Typically, work at home business opportunities can be divided into four groups:
1. Offering an existing product/service in an existing market.
2. Presenting an existing product/service to a new market.
3. Offering a new product/service in an existing market
4. Introducing a new product/service to a new market.
At this stage of the game the only limit is your imagination. Inspiration can come from anywhere — maybe you have a hobby that you’d like to turn into a full-time job; you possibly will be on the receiving end of bad service one day and decide to try doing it better yourself; or you could have a talent that you’d like to capitalize on.
Once you’ve come across something that you’d like to do, its time to take a look at the market and see what’s on offer.
Passing the test
So you’ve had a good thought and you’re eager to roll with it; now its time to put it through its paces. For the purpose of the exercise, let’s say that you have a passion for healthy living, and that you want to distribute a range of lifestyle accessories that promote healthy living with a do-it-yourself approach.
Ask around: Is there a market for products that promote healthy living? What sorts of products are existing? Who would you be competing with and what do your competitors offer? Do you have the required skills to run such a small business and — more to the point — what would those skills be? Where would your business be located?
Once you’ve answered those questions you should have a fairly clear picture of what your business will look like.
You source various products and decide to do some more study into the range of lifestyle products offered by a company called Vitality 4 Life. Your own life experience plus some work you’ve completed as a dietician has given you the vital skill sets, and you think that you’ll be able to work at home, giving you extra time for family. There is an existing marketplace, but there’s room for growth. Now it’s time to take a closer look.
To be or not to be
It’s time to get down to the nuts and bolts. You don’t want to skip into something feet first and find out the tricky way that the budget just doesn’t work.
To get started, sit down and work out if you need to hire staff, which means paying wages.
If you lease a premises you’ll need to be able to pay the rent, and your location will have to be suitable for your business and target bazaar (which also means that you’ll have to think carefully about just what that target market is). You’ll also need to work out the likely demand for your product/service.
O.k. you’ve worked out that there is sufficient demand for fine quality juicers, sprinters, water filters and other superior end accessories to take a shot at a distributorship as a work at home business opportunity. Now you need to make some marketing decisions.
Look at me! Look at me!
Advertising can be costly so you’ll want to be sure that your advertising budget is spent wisely. That means more market research, this time one-on-one. Profile your customer groups so you can aim your marketing at the right group/s of people.
Draw up a questionnaire (a short questionnaire — people run out patience if you ramble for too long) and hang around outside a few of the local gyms (for our particular example). Come up with a mixture of open questions (What do you think off..?) and closed questions (Do you have a gym membership? Yes/No.); sliding scales can be useful too.
For our health accessories business, a good question might be how did you hear about this gym? Radio, TV, newspaper, word of mouth act such a question would then give you an indication of the types of media that your target group responds best to.
Choose a business name, print up some business cards, buy some stock and get ready to trade!
Measure it, manage it!
A teacher of mine made the point that, in business, if you can’t compute it you can’t manage it.
You need to be able to plan ahead, and to do that you need to know — or to be able to accurately predict — your total sales. The equation is simple: Number of customers x average sale x frequency of visits per customer per year = total sales. Remember it, revise it often, measure your business and you’ll be able to manage it!
Keep an eye on your bottom line and, most importantly, always be aware of your cash flow — the cold, hard cash that you have in the bank. Allow for invoice periods (14 days, 30 days etc) when you’re planning your budget.
The market place has a life of its own, and no one can prepare for every contingency. Put some thought into your idea; make sure that there’s a market for what you’re offering; research, research, research; promote your business effectively; always know what’s going on in your bank account and don’t forget about cash flow!
It’s not perfect but, if you stay on these few simple steps, you’ll be miles ahead of many new small business ventures. If you’ve heard of a great work at home business opportunity, or have a product or service of your own to market, you’re off to a huge start!