Due to difficult economic times, many people seek new revenues. A valid alternative is to start a home business. However, this involves challenges and realities that must be understood before.
How to Start a Home Business
The home business has always been a way to create some extra cash. Some real benefits of these businesses are:
1. They allow a flexible schedule, whether you work part time or only for a few hours a day in your business
2. Fixed cost savings by eliminating a normal business costs such as a local income or payroll (not having employees)
3. Reduce average travel time in a business, because the company is located in your home
4. It can develop in person (physical business) and virtual (telephone, internet)
The home business has always been a way to create some extra cash. Some real benefits of these businesses are:
1. They allow a flexible schedule, whether you work part time or only for a few hours a day in your business
2. Fixed cost savings by eliminating a normal business costs such as a local income or payroll (not having employees)
3. Reduce average travel time in a business, because the company is located in your home
4. It can develop in person (physical business) and virtual (telephone, internet)
So far it seems to be an attractive business opportunity, however, the reality is that not all businesses started, succeed. Indeed, using the home as workplace, you save money and time, but some problems to face are:
1. Having a bad location significantly affects the home business
2. Do not have enough time (or have a fixed work schedule), tends to lower sales
3. The absence of a separation between home and work, can lead to personal and family problems
4. There is a tendency not to take seriously these businesses by the entrepreneur
1. Having a bad location significantly affects the home business
2. Do not have enough time (or have a fixed work schedule), tends to lower sales
3. The absence of a separation between home and work, can lead to personal and family problems
4. There is a tendency not to take seriously these businesses by the entrepreneur
Therefore, some tips for starting a successful home business are:
1. Define your resources
Before starting a home business (even before the business idea), you must define the resources available, both in terms of money, time, personnel (human resources), education and experience.
a. Money
Despite reducing its fixed costs, capital is needed for activities such as purchasing inventory, purchase of machinery, upgrading of its workspace, utility payments, etc.. The exact amount will be defined during the financial analysis to make your business plan.
b. Time
A business is a business treated poorly doomed. Daily work is required to devote to the business, even when you’re not on the counter. Consider a real way if you have the time to start a business. On average, a home business is like a part time job at least have to spend 4 hours a day.
c. Human resources
The home business are very similar to the family business, since family members involved in the business. Therefore, the starting a business should be a family decision, if this scenario happens, to be considered by the parties to enter into administration. If you have the financial resources to hire someone, we recommend hiring part time.
d. Education
In this issue, I refer specifically to management education. To manage a home business, you need to understand some basic management concepts, such as pay for products, such as determining the utility, how to handle customer service, develop a business plan, business strategies, etc..
You can check 100Negocios business courses, where he will train in the most practical and accurate on these issues.
e. Experience
Having business experience will help make enough to respond as a home business. If this is the first time that a company develops, it is recommended to minimize the investment, ie, start slowly, investing as small as possible. During this process, make many mistakes, but learn a lot from them, and will not cost you dearly. Also avoid at all costs using all its resources or high investment, if you do not have business experience.
2. What business idea fits?
Depending on the resources established in the previous section, must develop several home business ideas that suit your conditions.
Some resources for finding the best business idea are:
• List of home business ideas
• How to find profitable business ideas
• Section 100Negocios business ideas
• Profitable business in Mexico
It is very important to evaluate the first of 5 or more business ideas, and determine which best suits your available resources.
3. Make your business plan
This is where most entrepreneurs stops (and stuck). The concept of most of the business plan is a document that is long, tedious, and boring of a business. However, the reality is that the plan is more sitting representation of your business idea.
To determine whether an idea is profitable or not, the only way is to evaluate all that entails the idea that we proposed. For example, some factors to evaluate are:
• Potential suppliers
• Current Competition and close
• Cost of building an inventory
• average retail prices
• Number of people moving in front of my house
• Type of consumers (economic status, age, gender)
• Etc., etc..
Only the business plan can help you answer these questions, and to determine the most important:
• How might sell under my circumstances (at home)
• How much will it cost the business (fixed costs, commodity taxes, etc.)
• How much will I earn (yield)
You can check the course CEUN 2.0, where we show you all the steps to make your business plan, or the Alpha course, where we see how to do financial analysis to answer the above questions.
4. Investing slowly
A mistake that every new entrepreneur make when starting a home business, is launched with all their capital to build your business. One lesson I’ve learned over the years is gradually invest in the business. That is, to know what elementary or basic business needs, and do this.
For example, say you want to put a paletería at home. Have the space available, but lack backport (paint, flooring, etc..), Buy the machine to store the ice cream (and other machines), post signs and announcement out of business, buy raw materials and plastics (bottles, spoons, etc. .)
The business problem would be to invest all your money in creating a beautiful local day 1. Time passes and he realizes that it was not business as expected, but a seasonal business that sells only in hot weather. Likewise, revenues are not sufficient to sustain monthly expenses.
By investing little by little, we can realize (before using all capital), if: 1) the business can be successful and worth continuing to invest in it and 2) what they want to see the customer of this business.
In this way, we would use the minimum necessary to give attractive presentation to local, without buying the machines, invest in a product and plastics. With painting the interior and the facade, put an ad out, and fix a front desk (no tables or chairs), the investment is reduced, and we can see for a few weeks or months, how the business works.
Before starting a home business (even before the business idea), you must define the resources available, both in terms of money, time, personnel (human resources), education and experience.
a. Money
Despite reducing its fixed costs, capital is needed for activities such as purchasing inventory, purchase of machinery, upgrading of its workspace, utility payments, etc.. The exact amount will be defined during the financial analysis to make your business plan.
b. Time
A business is a business treated poorly doomed. Daily work is required to devote to the business, even when you’re not on the counter. Consider a real way if you have the time to start a business. On average, a home business is like a part time job at least have to spend 4 hours a day.
c. Human resources
The home business are very similar to the family business, since family members involved in the business. Therefore, the starting a business should be a family decision, if this scenario happens, to be considered by the parties to enter into administration. If you have the financial resources to hire someone, we recommend hiring part time.
d. Education
In this issue, I refer specifically to management education. To manage a home business, you need to understand some basic management concepts, such as pay for products, such as determining the utility, how to handle customer service, develop a business plan, business strategies, etc..
You can check 100Negocios business courses, where he will train in the most practical and accurate on these issues.
e. Experience
Having business experience will help make enough to respond as a home business. If this is the first time that a company develops, it is recommended to minimize the investment, ie, start slowly, investing as small as possible. During this process, make many mistakes, but learn a lot from them, and will not cost you dearly. Also avoid at all costs using all its resources or high investment, if you do not have business experience.
2. What business idea fits?
Depending on the resources established in the previous section, must develop several home business ideas that suit your conditions.
Some resources for finding the best business idea are:
• List of home business ideas
• How to find profitable business ideas
• Section 100Negocios business ideas
• Profitable business in Mexico
It is very important to evaluate the first of 5 or more business ideas, and determine which best suits your available resources.
3. Make your business plan
This is where most entrepreneurs stops (and stuck). The concept of most of the business plan is a document that is long, tedious, and boring of a business. However, the reality is that the plan is more sitting representation of your business idea.
To determine whether an idea is profitable or not, the only way is to evaluate all that entails the idea that we proposed. For example, some factors to evaluate are:
• Potential suppliers
• Current Competition and close
• Cost of building an inventory
• average retail prices
• Number of people moving in front of my house
• Type of consumers (economic status, age, gender)
• Etc., etc..
Only the business plan can help you answer these questions, and to determine the most important:
• How might sell under my circumstances (at home)
• How much will it cost the business (fixed costs, commodity taxes, etc.)
• How much will I earn (yield)
You can check the course CEUN 2.0, where we show you all the steps to make your business plan, or the Alpha course, where we see how to do financial analysis to answer the above questions.
4. Investing slowly
A mistake that every new entrepreneur make when starting a home business, is launched with all their capital to build your business. One lesson I’ve learned over the years is gradually invest in the business. That is, to know what elementary or basic business needs, and do this.
For example, say you want to put a paletería at home. Have the space available, but lack backport (paint, flooring, etc..), Buy the machine to store the ice cream (and other machines), post signs and announcement out of business, buy raw materials and plastics (bottles, spoons, etc. .)
The business problem would be to invest all your money in creating a beautiful local day 1. Time passes and he realizes that it was not business as expected, but a seasonal business that sells only in hot weather. Likewise, revenues are not sufficient to sustain monthly expenses.
By investing little by little, we can realize (before using all capital), if: 1) the business can be successful and worth continuing to invest in it and 2) what they want to see the customer of this business.
In this way, we would use the minimum necessary to give attractive presentation to local, without buying the machines, invest in a product and plastics. With painting the interior and the facade, put an ad out, and fix a front desk (no tables or chairs), the investment is reduced, and we can see for a few weeks or months, how the business works.
5. Honestly assess the location of your home
The most common problem when creating home business is to have a poor location for business idea raised. That is, we are not saying you have bad location, but the idea does not fit with the location of the house.
In developing the business plan, you need to assess whether the location is suitable or not. This can be done through an opinion poll, people who pass in front of the house, and ask if they buy X product here.
Another way to assess whether it is a good location or not, is to find a close competitor. Despite first impressions, having competition is a good sign, indicating that there is a demand in the area for the inhabitants.
6. Check that you have permission to land use
Another legal status to open a home business, is not having the permission or license commercial land use. As background, usually in homes or residential areas, register the property with a licensed residential land use, ie it tells the government that this home is for home use.
Businesses are required to have a license of commercial land use, indicating that the area is for commercial purpose. In case of not having the permit or license, you can get in trouble if the business prospers and begins to have more visits. Therefore, check your local authority or how to change the application to register a few square meters of your home for business use.
7. Does the business need parking?
Depending on the type of business, determine the need for parking. When the area is very tight, and no parking spaces, may discourage visitors to come to your home business.
This is why the shopping malls, which have enough space for visitors to park, and can enter the store, without fear that your vehicle is damaged.
Should not have parking space, but depend on it, will find solutions to improve the business, from hiring a valet parking service, rent a space near a neighbor, or modify the structure of your home.
8. Consider the area’s socioeconomic
Sometimes we are so confident that the business idea is excellent, that we forget to think about the consumer. A common mistake when starting home businesses, is not considering the socioeconomic status of the neighborhood or area where your home is located. Remember that a large percentage of their customers are people who live nearby, within 500 meters or 1 kilometer away.
Therefore, the type of business, price level, and presentation must match the socioeconomic status of the area. For example, the seafood food business (selling seafood and seafood), is a type of restaurants in the central region of Mexico, is a business of higher consumer prices. If we put a business like this, in a low-income area in the coastal zone, we may not have problems, but in the center of the Republic would be a serious mistake.
9. Two months of probation
Especially in business from home, we can quickly determine if a business will be profitable or not. Maybe in a month or two, you know if your business is profitable. That is, the rapid appreciation of the business is in a residential neighborhood. If people like, Compare rapidly. If not looks attractive, not enter the premises.
Therefore it is necessary to invest little (only in appearance) at first, and determine whether a business is attractive to the area or not. If we see that there is demand, we can use the remaining capital and efforts in shaping the shop.
10. Business on the Internet
An alternative to physical business are Internet businesses. This is a new business model, where by means of a website or a web platform, we generate revenues from sales of products and services, income, advertising, adsense, affiliate, intangible products, ebooks, courses, etc.
It is very easy to start online home business, and the costs are very low (see this article on internet business). However, it is a model that takes time to understand and generate results, it may take about 6 months to generate revenue.
The most common problem when creating home business is to have a poor location for business idea raised. That is, we are not saying you have bad location, but the idea does not fit with the location of the house.
In developing the business plan, you need to assess whether the location is suitable or not. This can be done through an opinion poll, people who pass in front of the house, and ask if they buy X product here.
Another way to assess whether it is a good location or not, is to find a close competitor. Despite first impressions, having competition is a good sign, indicating that there is a demand in the area for the inhabitants.
6. Check that you have permission to land use
Another legal status to open a home business, is not having the permission or license commercial land use. As background, usually in homes or residential areas, register the property with a licensed residential land use, ie it tells the government that this home is for home use.
Businesses are required to have a license of commercial land use, indicating that the area is for commercial purpose. In case of not having the permit or license, you can get in trouble if the business prospers and begins to have more visits. Therefore, check your local authority or how to change the application to register a few square meters of your home for business use.
7. Does the business need parking?
Depending on the type of business, determine the need for parking. When the area is very tight, and no parking spaces, may discourage visitors to come to your home business.
This is why the shopping malls, which have enough space for visitors to park, and can enter the store, without fear that your vehicle is damaged.
Should not have parking space, but depend on it, will find solutions to improve the business, from hiring a valet parking service, rent a space near a neighbor, or modify the structure of your home.
8. Consider the area’s socioeconomic
Sometimes we are so confident that the business idea is excellent, that we forget to think about the consumer. A common mistake when starting home businesses, is not considering the socioeconomic status of the neighborhood or area where your home is located. Remember that a large percentage of their customers are people who live nearby, within 500 meters or 1 kilometer away.
Therefore, the type of business, price level, and presentation must match the socioeconomic status of the area. For example, the seafood food business (selling seafood and seafood), is a type of restaurants in the central region of Mexico, is a business of higher consumer prices. If we put a business like this, in a low-income area in the coastal zone, we may not have problems, but in the center of the Republic would be a serious mistake.
9. Two months of probation
Especially in business from home, we can quickly determine if a business will be profitable or not. Maybe in a month or two, you know if your business is profitable. That is, the rapid appreciation of the business is in a residential neighborhood. If people like, Compare rapidly. If not looks attractive, not enter the premises.
Therefore it is necessary to invest little (only in appearance) at first, and determine whether a business is attractive to the area or not. If we see that there is demand, we can use the remaining capital and efforts in shaping the shop.
10. Business on the Internet
An alternative to physical business are Internet businesses. This is a new business model, where by means of a website or a web platform, we generate revenues from sales of products and services, income, advertising, adsense, affiliate, intangible products, ebooks, courses, etc.
It is very easy to start online home business, and the costs are very low (see this article on internet business). However, it is a model that takes time to understand and generate results, it may take about 6 months to generate revenue.
