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Articles of Interest to PC Entrepreneurs
Any of these articles may be republished by other newsletter, magazine or ezine publishers as long as they are posted intact with all credits. If you are an author and would like an article added to this list, email the article in HTML format to mtims(at)matcopublishing.com
STARTING A HOME BASED BUSINESS
Michael A. Tims
It wasn't too long ago that going to work meant leaving the house and traveling to your place of employment. There, you would put in 8 or more hours of "work" and receive a check at the end of one or two weeks for the work you did. I guess that's why they called this, "going to work".
Today many people do part or even all of their work at home. These type workers have been called telecommuters, doing work at home and either taking the finished work back to the office or even sending it over telephone lines from their home computer to their office computer. In fact, according to the Small Business Administration (SBA) there are as many as 13 million workers who do at least a portion of their work at home and a whopping 9 million that are independent telecommuters who work exclusively at home.
A growing number of people have gone one step further and severed all ties with employers and formal office settings. They have decided to go it alone in a home based business of their own. The SBA estimates that there are more than 30 million home based businesses in the US, with that number growing steadily each year. Every day people are turning garages, basements or spare bedrooms into board rooms to join the ranks of the newest and bravest entrepreneurs, those that have decided to stay home and raise a business.
GETTING A START Before you plunge headlong into any home based business, it is very important to analyze your motivations for doing so. If you want your business to succeed, you should base your decisions on more than just a desire to be your own boss, although coupled with other reasons this makes a strong motivating factor. Once you have analyzed your motivating factors, begin writing a formal business plan. A business plan will keep you focused on the important aspects of starting a business and keep you from straying off on tangents. Only when you have a plan in place can you make adjustments and improvements to it as you go along.
As you read the following questions, remember that there are no 'best' answers or 'right' reasons for wanting to start your own home based business. It is important, however, to understand all that a new venture like this involves.
For starters, ask yourself the following: * Am I the type of person who can switch from responsibilities of the home to those that are work related?
* Do I have self discipline? Can I meet deadlines and maintain work schedules without someone else reminding me what needs to be done?
* Can I work alone or do I need other people around me? Some people cannot handle the isolation of working at home.
* Am I self motivated; the type of person others would call a self- starter?
FINDING YOUR OWN NICHE Choosing a home based business is a little like choosing a mate; your decision should be made with much thought and concern for your future.
Before you invest any time, effort or money in a new business venture, take a few minutes to sit down and answer the following questions also. They may help to separate good ideas from poor ones that carry a higher potential for failure.
* Is your home large enough to set aside space for a business?
* Have you identified and described a business plan?
* Have you identified the product or service you plan to offer? Don't be vague, be very specific.
* Have you identified a market or need for the service or product?
* Is there room for one more such business in the market area?
* Why would clients or customers come to you instead of your competition?
* Do you now posses the talent and expertise that the business requires or will you have to learn new skills?
* Is this a type of business that CAN be run successfully from one's home?
LEGALITIES INVOLVED A home based business is subject to the same laws and restrictions that any business must adhere to and possibly some that only apply to home based businesses. These questions simply point out some of the areas you should be aware of. This is not meant to be legal advise and an attorney should always be consulted once you know what advice to seek. Likewise, the state in which you live may have unique restrictions and regulations for your particular business and the state's department of labor should also be contacted.
* Check with your city to determine if there are any zoning restrictions on a home based business. You don't want to get a business up and running only to have it shut down because of zoning restrictions.
* Be aware that certain products cannot be produced in a home business environment. Most states prohibit the home production of hazardous products such as fireworks, poisons, drugs or explosives. Neither can you manufacture sanitary products or medical products. Some states also prohibit the making of food or drink products or even clothing or toys. Be sure to check on all legal issues for your proposed type of business.
In addition to the above legal issues, the following accounting and/or registration type items may need to be addressed.
* You may need to obtain a state business license or certificate of business.
* You may have to register your business name with the city, county or state. This is sometimes called a DBA (Doing Business As) or Assumed Name Registration.
* If you are selling retail, or if the state places a sales tax on your particular service, you will need a state sales tax number.
Additionally, if you will have employees, you will be responsible for:
* Obtaining a federal employer ID number.
* Withholding local, state and federal income and social security taxes.
* Complying with all minimum wage, employee health and employee safety regulations.
Now that you have thought about the pros and cons of even starting a home based business and decided on what business to start (This is a subject in itself) it is time to put together a business plan.
DEVELOPING YOUR BUSINESS PLAN It is time to step back and take an objective look at your business idea and write down everything about the business you are planning. Writing a business plan forces you to take a critical look at all aspects of your proposed business; organizational, marketing and financial.
Keep your business plan simple, neat and to the point. Include a cover sheet, business description, marketing strategies, start-up costs, projected operating expenses, projected earnings as well as a directory of business and informational sources.
There are many software packages (commercial as well as inexpensive shareware) that will guide you step-by-step through the stages of writing a business plan. Several of these software packages are referenced in my book on computer related businesses. For now, let me just high-light the main points of a business plan.
COVER PAGE Lists the name of the business, address, mailing address if different, telephone number, name of owner or owners. Include a statement of purpose, identifying your primary goals and objectives.
BUSINESS DESCRIPTION From the business description, anyone should be able to get an accurate idea about your business. What is the principle activity? Be concise and specific. Include product or service descriptions. How will the business be started? Why will it succeed? Here's where you can promote your idea. What experiences do you have that will make the business succeed? Be honest and thorough.
MARKETING STRATEGIES Marketing is the basis of your business. If you don't bring in the customers, you won't be in business long. Are you sure your business can be marketed from home? Who will be your clients or customers? How will you price your product or service? Who is your competition and how will your business compete with its competition?
FINANCIAL PLANNING Money may be the root of all evil, but money is what keeps a business (and the entrepreneur) going. With a little for-thought, you should be able to minimize most financial difficulties. Include start-up costs. What will it cost to get the business off the ground? Add in all initial deposits for utilities, down payments for needed equipment, as well as promotional expenses to get the word out about your new business. The experts say that you should not expect a profit for the first eight to ten months, so have enough start-up capitol to survive any business slumps.
Project the operating expenses per month for the first year of operation. Include salaries, utilities, office expenses, loan payments, taxes, legal and accounting fees, rents, etc. Include normal living expenses for a home based business.
Likewise, project all income. Estimate your sales on a weekly as well as a monthly basis. From these estimates of income, you can predict breakeven points and cash flow predictions. Any marketing research done can be used to help estimate initial sales figures.
Your cash flow will determine if you can pay your bills or not. If your assets look great on paper but there is no money in the bank to pay the bills, your business is a bust.
Once you have your business up and running, you can keep track of all expenses, as well as income, and if you start to see a cash flow crisis developing, you will be able to cut down on all non-essential expenses until the crisis is over.
SOURCE DIRECTORY Your business plan should include all sources that your will need, not only for supplies or raw materials, but informational sources as well. If there is an association for your chosen business, join it. Learn where to obtain help when you need answers to important questions. The U.S. Small Business Association (SBA) is a vast source of information. Look up the number for your local SBA center. The toll free number for the SBA answer desk is, 1-800-8-ASK-SBA.
Other sources of help and information include; Small Business Centers (SBC), the Small Business Institute (SBI) and Service Corps of Retired Executives (SCORE).
In addition, your local Chamber of Commerce, your state department of economic development, local colleges, libraries, as well as companies involved in small business technologies, can also be good sources for information.
Once your business plan is finished, the next step is to put it into motion. Remember the old adage, "The longest journey starts with but a single step".
I hope this report has given you some insight into what needs to be done in
order to start a home business. If you are still unsure as to what business you
would like to engage in, my self published ebook, "101 Computer Related
Businesses" may give you an idea of what businesses are being started and run by
others with the help of their personal computer or PC.
Michael A. Tims is a retired high school math teacher but has run a mail order business as a sideline for over 20 years. Being a self taught computer NUT, one of his passions has been to find unique ways to use a PC to enhance or enable a small business venture.
Mr. Tims has written numerous magazine articles on PC basics or using a PC in business and is the author of the published book, "101 Computer Related Businesses", as well as a syndicated column called, "PC Biz of the Month".
Visit his new web site at www.matcopublishing.com and let him know what you think of it. Many other articles may be read at www.matcopublishing.com/articles.htm===================================================
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