According to research, approximately half of all small businesses in the United States are home-based businesses. The prospect of starting a home-based business can be very intriguing and tempting. The chance to be your own boss, to work out of the comfort of your own home, and to make a name for yourself are all valid reasons to try your hand at starting your own company.
However, the same research indicated that the margin of success for startups, including home businesses, is worryingly small. For example, in 2015, more than 410,000 startups opened, but more than 395,000 closed. Before you commit to opening a home-based business, learn about the most significant challenges would-be entrepreneurs have faced.
Not Enough Knowledge
Unless you have prior experience in running a business or studied the principles of operating a company, you might not have the knowledge required to run one smoothly. Even a small operation running out of your house can get complicated, from maintaining inventory to ensuring product quality. Not to mention the complications of accounting, taxes, and the other financial minutia.
If you have had zero experience in managing a business or running one, you should at least take classes before investing in the idea. Better yet, you could gain insight into running a business by getting actual job experience.
Not Enough Reach
Unlike well-established businesses, such as franchise opportunities for lawn care or other services, your home-based business will not have name recognition or an identity. Don’t make the mistake of relying solely on the patronage of friends and family members to keep your business afloat, nor should you stake everything on word-of-mouth. Without expanding your reach, you won’t have enough customers to stay profitable,
Invest in low budget but effective methods of reaching out to possible customers. The most striking examples include creating a social media account for your business, looking into local search engine optimization, or hosting public events.
Not Enough Space
It may seem easy to allocate enough room in your house for a business, but you’d be surprised by how much room it needs. Aside from a computer terminal, you’ll also need room for filing, taking calls or meetings, and a workspace. This problem gets bigger if you’re making products at home because you’ll also need room to store your inventory.
Even worse is if you share your home with family members. Delineating your workspace and living space must be strictly enforced if you are to concentrate on running your business instead of picking up after children or seeing to the needs of family members.
Not Enough Time
As a business owner, you must have enough time to address all the issues and complete all tasks related to your business, and this can get very challenging when you’re working out of your home. You may have responsibilities and duties to your family that you can’t postpone even for your business, which means you’ll have to incorporate them into your schedule. What’s more, it could be challenging to maintain a healthy work-life balance when your work is where you live. Proper scheduling and finding the right middle-ground is the only way to make things work.
If you believe that you won’t be able to overcome all of these challenges, then maybe starting a home-based business is not for you. Thankfully, you can take classes, build experience, and even try running a franchise until you’ve developed the requisite skills to be your own boss.