Tips for Starting a Home-Based Business in a Recession

LAID-OFF? DOWNSIZED OUT? OR FACING THE POSSIBILITY OF? IF SO, HERE ARE TIPS FOR STARTING A HOME BUSINESS

If you are one of those who has been laid-off, downsized, or fear you are about to be, this may be the time for you to consider joining the ranks of the millions of home-based business owners.


Prepare, Plan, and Persevere

No matter if you expect or expected a job loss, or if you were unceremoniously “dumped” from your position, you may still suffer an emotional “shock” of sorts. However, #1 if you see your unemployment time as an opportunity to follow a work “passion” or “dream,” you will be more likely to recover faster and accomplish the goal of being a successful home-business owner. Here are common-sense tips to help you succeed in a home-business startup if you are either unemployed or may be shortly:

Preparation

Even though you may want to start a home business immediately, taking preparation steps like the following will help insure your venture’ success:
*Research a home business idea(s) that interests you to see if a profitable market exists (potential customers).
*Assess what marketable skills you have gained through job and volunteer experiences. You could write a resume’ for yourself and then list all the skills you have gained from each paid and volunteer experience and decide which will be best utilized in your business. Choose a business idea you really like, because you will be working many hours to make your home-business startup a success.
*“Match” your skills with your desired business idea. Decide if you will need more training, education, and/or work experience in order to pursue your chosen venture.
*Consult with your family and discuss the impact a new business could have on their lives in terms of your time and the money that will be involved. Enlist their help and reward them accordingly.
*Gather your business’ experts such as a lawyer, accountant, insurance agent, business coach, computer consultant, financial advisor and other professionals before you start-up so you will know whom to turn to when you need their advice.
*Legal Considerations. Find out from local, state, and federal agencies what licenses, permits, you need, and if there are zoning considerations for your home business. Determine your business’ structure.

Essential Plans

The adage that explains why many businesses go under, ‘Businesses do not plan to fail; they fail to plan,’ really is true. Do not neglect to create the following plans:

*Business Plan – A business plan is a blueprint or strategic plan for you to follow in setting up and managing a business. If you need help in writing one, seek a small business consultant, or use books and software like Linda Pinson’s Anatomy of a Business Plan and Automate Your Business Plan.

*Financial Plan – This will include two parts: personal financial planning; and one for your business start-up and on-going finances. Eliminate as much personal debt as you can and try to have at least six months living expenses saved before you start a business full-time. Do not underestimate your business’ startup costs. Make sure your business’ prices factor in your overhead and other expenses, your profit margin, and a salary for yourself.

*Marketing Plan – Experts recommend that a new business owner spend 50 to 75 percent of his/her time in marketing their new business. Take time to plan your marketing strategies. Research your competition and strive to find your business’ market “niche” –what will make your business unique in its offerings to its customers.

Perseverance

True entrepreneurs persevere and never give up until they find the answers that lead them to business success. Persevere until you…

*Conquer your fear of failure. – Many successful entrepreneurs have failed in their previous startup ventures, but learned from their mistakes and have gone on have profitable enterprises. *Learn to manage your business. – Monitor your business’ cashflow, and its expenditures and profits, and make adjustments as needed to keep your businesses thriving and going forward.

*Know how to stay current. Know the latest in trends and technology in your industry and be flexible to change if the profits are to be made in those new directions. Trade groups and business publications are good sources of this information.

*Put customers’ needs first and have lots of them! Maintain a quality product, service, and treat all customers with respect. This policy will help develop loyalty with current customers and attract new ones, without having to lower your prices in the face of competition or in a slow economy.

Working a Home Business Venture Around Your Day Job

If you fear that your days in your current job may be numbered, you might consider starting a venture now and operating it inconspicuously while at your day job. Make use of mobile technology, such as a cell phone, a laptop computer with a business e-mail address, and other devices that you can use in during work and lunch breaks to market your business and reach customers. In using time more efficiently, many new entrepreneurs discover they can free up time for business tasks they can do at their current job or later when they are home. (SEE article, “Sneak a Part-Time Home Business Around Your Day Job”).

First Customers—Your Former Boss, Co-Workers, Clients

Many home business entrepreneurs’ first clients are the people with whom they have worked for or with previously. If you have been a valued employee, but management was forced to let you go, you may be able to work for them as an independent contractor. If your business will compete with your former company, it is best to first check with an experienced attorney about non-compete contract issues, protected trade secrets, and former client business relationships so you will not be sued. However, if your business does not compete, people you know will be more likely to become your first customers because generally, people like doing business with people they know.

Possible Start-Up Funds from Your Existing or Previous Job

Realize that it make take six months or longer for your business to turn a profit, so the more funds you have available for your new venture, the longer your business can survive. If you are still employed, check to see if you will be getting a severance or retirement package, and if you will qualify for unemployment compensation that could help finance a business or pay living expenses. You may be able to cash in company stock or use money form your 401K, but know there may be restrictions and possible taxes to pay.

It may be daunting to start a business, especially when a regular paycheck is no longer a reality, but with careful planning and preparation, your home business can provide a good living and you and your family a good life.

SIDEBAR: Resources Close to Home

Some of the best resources for information for your home business startup can be found right in your own neighborhood. Here are some of the best:

1) Public and College Libraries – Provides business-related books, publications, directories, and Internet access (if you do not have a computer).

2) Business Owners’ Organizations – Local chamber of commerce organizations, women’s business clubs, and local chapters of trade associations can provide you with networking opportunities, business tips and and possibly mentors to guide you.

3) Government: – Offices of local agencies, state (or province) officials, and regional offices of federal agencies such as Women’s Business Development Centers (www.sba.gov), Small Business Development Centers (www.sba.gov/), and offices of SCORE (www.score.org) can provide you with free or low-cost business consulting.
                                                                         -30-
Previously published in HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit http://www.homebusinessmag.com/
 
Read other similar articles that I wrote for Home Business Magazine about starting in tough times: (www.HomeBusinessMag.com)


“Selecting the Right Business for Tough Economic Times: Match Your Talents, Skills, and Interests with an Economic Downturn”
http://homebusinessmag.com/business-start/how-guides/10-start-success-tips-recession

“Ten Start-Up Success Tips for a Recession”
http://homebusinessmag.com/business-start/how-guides/10-start-success-tips-recession

                                                                        # # #

Profiles of Entrepreneurs

If you are a micro-small business owner-entrepreneur, and wish to be featured here on this blog, contact me. Here are the interview questions:

1) What inspired you to start your business(es)?


2) A brief description of your business(es)?

3) Your most effective method(s) of promoting your businesses?

4) Your best customers?

5) What do you consider your best business achievement?

6) What do you like about being a business owner?

7) Do you have a business success tip in tough economic times?

8) Do you have a favorite business-building idea(s)?

9) Do you wish to add any additional comments or tips for our readers?

10) Goals for your business in 2011 and beyond?

11) Your Name, name of business, web site, other?

Looking forward to hearing from you (post a comment below).

"Are YOU the Next Millionaire Next Door?"

"Are YOU the Next Millionaire Next Door? - Home Business Magazine (HomeBusinessMag.com) - August, 2011 Issue


This was my fifth year writing this feature, interviewing home-based business owners whose businesses have grossed a million+ dollars. Here are those featured:

#1 - Samy Liechti - Founder, BlackSocks.com - providing customers with "sockscriptions" of black socks.

#2 - Heather Schuck, Glamajama children's clothing - glamaLife.com

#3 - Marc Ostrofsky, Author & Serial Internet Entrepreneur - GetRichClick.com

#4 - Dan Engel, E-commerce services - FastSpring.com

#5 - Shelly Palmer - media and technology expert - ShellyPalmer.com

#6 - Dina Amico-Kriescher - stuffed animal workshops - NoahsArkWorkshop.com

#7 - Mark Faust - author, speaker, business consultant - EchelonManagement.com

#8 - Stacy DeBroff - information for Moms; brand consulttant - MomCentralConsulting.com

#9 - Dr. Farrah Gray - author, speaker, publisher - DrFarrahGray.com

#10 & #11 - Collette Larsen & Zachary Ross - direct sales - JoinLarsenGlobal.com

#12- Paul Mann - pet boarding business opportunity - FetchPetCare.com

This issue is presently for sale at major magazine and newsstands. Read their profiles to encourage you to start your own successful home-based business!

                                                                                    -30-