So have you decided on the product or service to be offered by your home-based business, registered your business name, secured all the necessary licenses, and are now all set to get started. But one more thing may still not be clear to you. How do you actually run a home-based business? Would it be more ‘home-based’ or more of a ‘business’?
Well, the answer is as long as you run your business like any self-respecting business owner, it really won’t matter much. After all, the people you’ll be dealing with – your customers and suppliers, in particular – generally won’t mind or won’t be able to tell whether you are a ‘regular’ business or a ‘home-based’ one.
In running a home-based business, you should then be minding these three important elements – professional image, time management and basic financial practices.
Your professional image will have a significant impact on your business and you credibility as a home-based entrepreneur. Don’t be tempted to neglect your image simply because you are working from home. Carefully cultivate an image that will enhance your professional self-esteem. If you truly feel like a professional entrepreneur, you should be running your enterprise professionally.
A dress code may not be necessary for home-based entrepreneurs, but when expecting clients and suppliers to come over and see you, make sure that you are dressed neatly and appropriately. Also, make sure that your home office is similarly neat and organized. If the space in your home is too limited to provide an area solely for conducting a business, you need to keep your entire home clean and uncluttered at all times.
Your clients will have reason to deduce that the way you keep your home also reflects the way you conduct business. A visit to your home office should therefore be as pleasant an experience for your clients as it should be for you and for those living in your home with you.
You also need to make yourself truly knowledgeable in your line of business and be perceived as such. Keep yourself updated about current developments in your industry by reading business and trade publications regularly, and make yourself conversant with issues that may be of interest to your customers.
Entrepreneurs often cite the need for flexibility in their schedule and better control of their time as major reasons for wanting to be home-based. This doesn’t mean though that you can be as freewheeling as you want to be. If you make that mistake, you’ll soon find out that not keeping any schedule at all can lead you to giving either too little or too much to your home-based business.
The time you will need to devote to your home-based business everyday will depend on many factors. The most crucial of them are the following:
a.) Your role in the business – are you in it full time or part time?
b.) Your other responsibilities – perhaps you decided to set up a business at home so that you can spend more time with your family?
c.) The growth phase of your business – is it a start up requiring a lot of your attention, or is it already on ‘cruise control’ and needing but little attention from you?
Once you have determined how much time you need for your home-based business, stick to your schedule as much as possible. Do so despite the distractions that may come in the form of unexpected visits from friends and phone calls.
Entrepreneurs who go home-based are often natural whiz kids in multitasking. When you plan to multitask, though, be realistic. Make sure that not all the tasks require very high levels of focus. You can’t do two tasks that require intense concentration all at the same time.
Make sure, too, that those who live with you respect the time you need to run your home-based business. If there are business-related tasks that you can delegate, give these to them. It’s advisable to strike some arrangement with them beforehand, though; if need be, compensate them for their efforts. Being rewarded for these tasks is a great motivator and it definitely will elicit more cooperation and avoid resentment from the people you live with.
To manage your time really well, nothing beats careful planning and seeing a plan through. But remember that with you as your own boss, nobody else will enforce the plan for you but you yourself.
Basic Financial Practices
To succeed, a home-based business must focus more on running a business than running a home. This doesn’t refer only to keeping well-organized and up-to-date financial records, although that’s a very important aspect of any business. Instead, it refers to the larger aspect of fiscal discipline – practicing the good habits needed to keep the finances of the business distinct and separate from those who used to pay for personal and household bills.
Always keep in mind that the monies of your home-based business belong solely to the enterprise. You should never use the funds of the business for your personal needs; in no event should you dip into the petty cash of the business to pay for even the smallest household-related items. And make sure to maintain a separate purse for your family’s living allowance; this is one good way to avoid incurring unexpected but otherwise avoidable losses in your home-based business.
Here’s a very useful tip for avoiding misuse of the funds of your home-based business; make a standing agreement with your family members as to which bills would be paid for by the business. An accountant can tell you which of them may be considered as legitimate business operating expense.
One more thing: if you run a home-based business or any business that deals with products that can be immediately used or consumed – a home-based bakeshop, for instance – make sure that every item your housemates take from your stock is paid for. Otherwise, those unpaid items can be a big drain on your profitability.
Finally, as soon as you can, pay yourself a salary, even if it’s only minimal. This is a good deterrent against being forced to dip into your business coffers to pay for your needs.
These then are the three most important do’s and don’ts you should be vigilant about when running a home-based business. If you get these basics right, you can build your home-based business on a solid foundation and make it profitable like a regular business away from home.