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11 Traits for Success When Starting a Home Business
Starting a business is a difficult path.
Data from the U.S. Bureau of Labor Statistics shows that most failures of new businesses happen within the first two years of operation. In fact, 34% of new businesses are not operating after those first two years.
Facts don’t lie. It’s difficult to start a business and keep it running.
According to the U.S. Census Bureau, about 50% of all business were home-based in 2007. I would venture to estimate that even fewer home businesses make it to the two-year mark.
I have a few ideas why. But first, let’s focus on why so many people are starting a business from home.
What’s the difference between running a business and running a home-based business? Not much, except that instead of going to an office, you’ll be at home. Herein lies the primary challenge to a successful home-based business:
So many people trying to start a home-based business essentially drop the word “business” out of the equation and are simply looking forward to being at home.
If you’re starting a home business or already have one underway, make sure you start by looking at the bigger picture. In other words, if you’re running a business from your home, you can’t just “be home” doing whatever you normally do.
This is where the danger lies.
After all, you will be working on your business from home, so you need the same focus and concentration of any professional who is starting a small business, whether from home or from an office or storefront. It’s still a business.
After helping to train thousands of people in growing or starting a home business, I am convinced that this is one of the top distinctions prospective business owners must make. It’s an important mindset shift to have, whether you’re starting an online business or an offline one, or want to earn a little extra income, replace your existing monthly paycheck, or aim for $50,000 a month. (This is not an exaggerated figure: over half of businesses queried by the US Census Bureau reported that their businesses were their primary source of income.)
If you regard it as a “stay-at-home job” rather than as a legitimate home-based business you would establish outside of the home, you may be destined for quick failure.
So what does running a home-based business take? I’ve put together 11 personality traits and characteristics that are crucial for home-based business owners.
1. Take it seriously.
Don’t get sucked into the belief that it’s anything but you trying to start a business from home. Yes, you will save on some expenses, such as renting an office space and commuting costs. However, along with the freedom of a home-based business come the less enjoyable tasks. For example, you will have to pay taxes on your earnings. You also will need to set up the appropriate business structure (like incorporating or sole proprietorship).
2. Focus on providing value.
Most importantly, like all successful businesses, you will be responsible for providing value to your clients. Whether you publish an eBook, offer a full-blown training product, invent something cool, offer a consulting service, or even earn from advertising streams (like Adsense or affiliate offers), you have to give customers something of value.
Many affiliate and Adsense marketers have learned this firsthand when they were not truly focused on offering customers value. Instead, they built sites just to earn from the advertising. Internet users were unhappy when landing on their sites, so Adsense closed their accounts. And high search engine rankings were lost when search engines caught onto the tricks the marketers were using to rank their sites higher than those with real value to them.
3. Do what you love.
People who find a way to coordinate a home-based business with something they are good at and love are among the happiest and most successful small business owners. If you love candles, why not become a distributor? Good at computers? Independent computer technicians are able to provide individual support to local businesses.
One successful home-based business came about when the owner’s son was diagnosed with celiac disease, a condition that requires omitting wheat-based foods from one’s diet. Tired of not being able to find a good birthday cake recipe, this determined mom created her own and started making them for friends. Pretty soon word spread of her delicious cakes, and she created a home-based business that now collects thousands of dollars in revenue each month, thanks to partnerships with health food stores.
4. Hone self-discipline and self-motivation.
Starting a business from home is a labor of love, but it also requires a surprising amount of self-discipline. Make it easier for yourself by setting clear expectations and boundaries with your family.
There needs to be a clear distinction between your home life and your work life. This can be physical, such as setting up a home office that’s in a separate room of the house, a dedicated phone/fax line, and a lock on the door.
Equally important is the mental divide that must be in place in order for you to effectively work. Creating (and sticking to) work hours, setting a daily routine, and getting family on board with when you are available is central to your business’ success.
5. Finding balance.
If you have set up clear boundaries around your home-based business, it should be pretty easy to find “down time.” However, for some new business owners who are eager to find success, the prospect of taking time off is discouraging, and even unmotivating.
After all, shouldn’t you give it your all?
This misconception can cause untold damage, often resulting in burn-out for new business owners. The importance of balancing your work with pleasure is even greater when you are your own boss. This can be as simple as building in breaks in your day (walking the dog, eating lunch on the patio) that get you out of the office for a short while, to scheduling in vacation time annually.
6. Study marketing trends in your field.
Just like you expect teaching professionals and health care providers to keep up with continuing education, as a small business owner, you need to keep on top of the current trends in your industry. The oil baron J. Paul Getty once said, “To succeed in business, to reach the top, an individual must know all that is possible to know about that business.”
Subscribing to industry journals or magazines can keep your skills and ideas fresh on how to do business at home. Keeping your business active on social networking sites can help you study marketing trends and get the word out about your services.
7. Build a team.
In the age of the Internet, it’s never been easier to create a work team. Websites like oDesk and Guru can connect you with exactly the professional you seek. For people with limited budgets, these sites can be excellent help in tracking payments to contractors, assigning work, and processing payments and tax documents. Best of all, they make it possible for you to delegate less important tasks to others so you can focus your expertise on building a home business.
8. Develop strong money management and good financial habits.
Every business owner wants to reduce her/his expenses to create a better bottom line. Legitimate home based businesses can successfully achieve this by adhering to consistent methods of money management.
Perhaps this is something you can do, or maybe it makes more sense for you to hire a third-party bookkeeper. Be upfront with yourself as to whether money management is a strong suit of yours.
If it isn’t, you can take a course at your local community college on financial planning for business owners. Read business books – Amazon lists thousands of titles under the “Budgeting and Money management” section. Successful home-business owners implement techniques in their personal spending habits that are mirrored in their business practices.
9. Be resourceful, be adaptable.
If you find that your business is floundering or not as fresh as it once felt, it is up to you to find ways to adapt it to meet the market’s demand. Perhaps someone contacts you with a request that is outside of what you normally offer. Instead of saying no, exploring the possibilities can open new doors that you might not have known were available to you. Do you cater to a certain audience? Explore the possibility of expanding your services to other target audiences.
For example, over one-third of business owners have reported that at least 10% of their profits come from sales to other businesses and organizations. If this is not a part of your home business, make it one. Being adaptable to change and resourceful of what you have at hand can extend your home business’ lifeline well past the two-year mark.
10. Implement organization into your business.
A business cannot be as successful as its potential when work is hidden under piles of papers or strewn about in a disorganized fashion. While some business owners take awkward pride in their personal disorganization (“I know where everything is!”), rest assured that the people who work with them do not.
Aim to keep your work space tidy and organized with well-labeled files and suitable furniture, such as filing cabinets, shelving, and desks with built-in printer dock stations. This same organizational spirit should extend to your computer files, so identify a method of saving documents and stick to it. Finally, stock supplies in a way that makes it easy for you to access what you need quickly. Plan periodic supply runs to keep impromptu trips to a minimum. All these are important guidelines on how to do business from home.
11. Take time off.
I mentioned the idea of scheduling vacations into your life earlier, and cannot stress enough how important it is for home-based business owners to get away. After all, when your home is your office, you may find it difficult to vacation there!
Taking time off is cited by successful business owners as one of the critical ways of recharging their creative juices. For new businesses, this may mean vacationing for an extended weekend. Even just that helps. Find your balance and make sure to take that time off so you can be well-balanced and ready to go.