Many mums come up to me to say that they’ve always wanted to have their own home based business. They dream of quitting their jobs, pursuing their passion, looking after their family and living the life of an entrepreneur.
Starting a home-based business needs careful planning and you really must do a reality check first. Money is perhaps the most important thing you need to start a business. Whether it’s a web-based service or a small arts and crafts business, you need to check if you have the money to sustain it.
Here are some tips to remember before you starting your own home-based business:
1. Have at least eight months’ worth of emergency savings.
This is non-negotiable. You must have eight months’ worth of emergency funds before you even start a business. This is to ensure that there’s something to tide your family over in case you decide to resign from your day job and focus solely on the business.
To know how much you need to save for an emergency fund, jot down all your monthly expenses like food, bills, credit cards, insurance payments, mortgage payments, gas, daycare, etc. Add these all up and multiply by eight. The total amount should be your target in saving for your emergency fund.
Once you have already saved enough for your emergency fund, then you can start saving money for your business.
2. Crunch the numbers.
Any business would require some amount of money and it is your responsibility to determine that. Know how much it would require when applying for business permits, what are the taxes you need to pay, and what type of equipment you need to buy. Would you need an assistant? Find out how much it would cost to hire a part-time or full-time employee. All of these should be taken into consideration.
3. Come up with a business plan.
A business plan is a document that gives you a clear picture of your business goals and how you are going to achieve these goals. It includes your initial investment capital, the monthly expenses your business would need, and how long before it takes you to break-even and, eventually, earn a profit.
A business plan doesn’t have to be like a dissertation paper but remember that this is important to make sure that you keep track of your goals.
4. Don’t quit your job. Not yet, anyway.
Many people make the mistake of quitting their jobs to start their own business, only to realize later on that they haven’t fully prepared for it. Starting a home-based business doesn’t have to be an all-or-nothing deal. You can still stay in your day job while laying the groundwork.
Instead of quitting altogether, you can polish your arts and crafts skills by doing it on weekends and selling them online. You can also sell your products and services to work colleagues. Think of them as valuable test subjects who can give you great feedback and how to improve your business. You can also use your annual leave to attend classes or seminars.
Everybody should be able to achieve what they want in life. But just like anything else, you need to work to hard attain that dream. With perseverance and a lot of preparation, you just might be on your way to that dream. I wish you every success in the world.