When you start a home business, you have to get very good at a dozen or more disciplines, and you have to get good very quickly.
You have to learn marketing, sales, customer or client relations, time management, planning, financial management, and thrift spending. And you still have to perfect the delivery of outstanding products or services. Plus, you have to master the delicate skills of balancing home and work.
You may bring some of these skills from past work experiences. Some of these talents may come naturally to you. But you’ll have to develop a good portion of these critical skills on the job. This list of twenty start-up secrets will help you focus on what’s most important in getting your business up and on its feet quickly and securely. These secrets were collected from discussions with successful home-base entrepreneurs.
Secret # 1: Market Research
You should study the market for your products or services before you launch. You need to learn who your customers are, how to reach them, and who you will compete against to win their business. Beware of a business idea that has “no competition.” That means you’ll have to develop the market yourself — and that will be expensive. Study your market until you know who your customer is, how exactly to reach that customer, and why your product is superior (or less expensive, or easier to use) than your competitors.
Secret # 2: Seek Outside Advice
You’ll need to learn a great deal during your start-up period, so seek expert advice. Your first meeting with an attorney or accountant is free, and you can learn a great deal about legal and accounting needs in one visit. The Small Business Administration provides a wealth of expertise, including the free council of retired business owners and managers. You don’t need to know everything about running a business to succeed, so it helps if you can identify people who know what you don’t know.
Secret # 3: Learn from Other Entrepreneurs
Judy Garland once gave this advice to her daughter, Liza Minelli: “Steal from the greats — that’s what I did.” There are patterns of excellence among successful business owners. Learn what it takes to succeed in business by studying the business habits of thriving entrepreneurs. You can meet these people by joining local business associations or by simply calling them on the phone and saying, “Can I take you to lunch? I’d like to ask you a few questions about how to launch a business.” For the price of a lunch, you can pick an entrepreneur’s brain mercilessly.
Secret # 4: Delegate and Ask for Help
You’re going to need help in launching your business. If you achieve any degree of success in finding clients and customers, you’ll soon need assistance and support. Usually family members are happy to pitch in, and they often work for free. Accept their support and assistance. Some home-based entrepreneurs struggle, believing they have to do it all themselves – even while family members want to help. As you accept help, make sure you delegate the jobs that keep you from doing the most critical tasks.
Secret # 5: Keep Funding Close to Home
When seeking funding in loans or investment capital, bankers and investors want to see that you already have your own money on the line. They’re also encouraged when they see that family and friends have invested in the business. First seek funding from personal savings, family members, home equity loans or personal lines of credit. This will give future investors the confidence that you believe in yourself and have plenty of incentive to make sure the business succeeds.
Secret # 6: Master the Internet
The Internet will provide quick answers to hundreds of thorny business questions, and it may well provide a market well beyond your local area. Take the time to master this endlessly useful tool. You can use it to learn marketing and sales or locate sources of funding. Even if your market is entirely local, you can still use the Internet to find customers or clients. Email alone is also a powerful and necessary communication tool, whether you’re reaching out to customers, vendors or experts.
Secret # 7: Stay Agile
What worked yesterday, won’t necessarily work tomorrow. Things can change quickly in business. Successful entrepreneurs are committed to change, because the world keeps changing. Products that sold well last year may flounder this year. Be prepared to revamp your notion of what you sell and how you reach customers. There is a very high likelihood that your business concept at launch will look vastly different your actual business once you’re succeeding. Don’t be rigid about what you expect your business to look like.
Secret # Marketing/Sales: Watch Every Penny
The original owners of “Mad” magazine were a mom and pop business. Mom would literally count paper clips and ask employees to make sure they didn’t inadvertently throw or give any away. That may be excessive, but I’m sure that operation didn’t waste any of its precious capital. Become a hawk at cutting expenses. A nickel saved on expenses goes straight to the bottom line. Push all of your vendors to their best price, and shop where your dollar buys the most.
Secret # 9: Under Promise and Over Deliver
Don’t sell more than you can deliver. Customers will keep coming back if they believe your products are services are a good deal. It can be tempting to promise the moon just to close the sale, but it’s the long-term relationship with customers and clients that will keep your doors open year after year. The trick to delivering a great buy to your market is to soft-sell what you’ll deliver, then give, give, give in benefits and value.
Secret # 10: Treat Credit Cards Carefully
Credit cards may look friendly, but they have sharp teeth that can draw blood. You can start out with a very low single-digit interest rate. Then, with one missed payment, your rate goes north of 20 percent. Your capital is precious; try to avoid spending it on high interest payments. That said, credit cards can be a real lifesaver during difficult cashflow crunches. Just be aware they can hurt as well as help. Don’t use them as a source of capital just because they’re easy. Instead of sending in the credit card flyer, take the trouble to get a long-term loan with a decent interest rate.
Secret # 11: Study Franchises and Business Opportunities
Sometimes a franchise or business opportunity is your best bet for home business success. In recent years, the franchise and business opportunity market has developed home-based versions of successful, branded businesses. The advantage of a franchise or business opportunity is the high success rate — sometimes well above 90 percent. What you give up in freedom, you gain in likelihood of success. Plus, the wide variety of options means there’s a good chance you’ll find a business that fits your interests.
Secret # 12: Follow Your Passion
Some business gurus say you should start a business from your core competence — do what you know. But the practicing accountant may have a dream of opening a photography studio. If so, she may put far more effort into making a home-based photo studio succeed that she would even commit to an accounting practice. If you’re going to put in the long hours and laser-beam focus that are necessary to start a business, choose a business you will love.
Secret # 13: Partner with Vendors and Suppliers
One way to save on expenses — and thus enhance your chances for success — is to negotiate the best price and service package with your vendors and suppliers. These businesses have an interest in your success. Go to them and ask for help on price and terms. You’ll find many are willing to bend in order to win your business if they believe you’re going to succeed and buy their goods or services for many years. But if you don’t ask, you won’t get their best deal.
Secret # 14: Ease Your Way Toward the Launch
You don’t have to quit your day job and plunge into your business all at once, no matter how tempting that may be. If you can prolong your income from your day job while moonlighting to get your business up and going, you greatly increase your chances for success. This can be excruciatingly, especially if one of the reasons you’re starting a business is because things at work have turned sour. But sometimes it’s best to hang in there with the income and benefits until your part-time business is ready to support you.
Secret # 15: Get to Know People
The people you meet in business are often those who can help your business succeed. Join business associations and get involved in those groups. They will become a source of phone-call expertise as well as a source for potential vendors, suppliers, associates, or even employees. Working on committees or in leadership positions at business groups will enhance your reputation and thus your company’s reputation.
Secret # 16: Use Associates, Not Employees
When you need help to sustain your business or make it grow, bring in help through associates rather than employees. Bring in a salesperson who operates as an independent contractor, and there will be less burden on your time and your business. You can use associates for bookkeeping, marketing, and even for creating and producing your products. With the associate relationship, you don’t have to manage an employee and you only pay for your need.
Secret # 17: Learn Relationship Marketing
Find out what your customers and clients need beyond what you are already delivering. If you’re providing wedding photo packages, see if they also want family photo shoots, anniversary shoots, and/or business shots. Look for opportunities to extend your services or develop new products based on the good will you’ve already created with existing customers. It’s far less expensive to sell additional items to an existing customer than it is to find a new customer or client.
Secret # 18: Marketing/Sales: Technology Is Your Friend
Stay up on all forms of technology, from text messaging to podcasts. The more technologically savvy you are, the more efficient you can become in your business. This includes everything from connecting to customers to producing your services and products. Technology advances, such as the Internet, have helped make home business possible. Further advances in technology could make the difference in your home-business survival.
Secret # 19: Fire Your Clients
If you have a service business — say consulting — you only have so many hours you can fill each week. Once you fill those hours, the only way to improve your business is to improve the quality of your clients. The way to do this is to weed out the high-maintenance, low-billing clients with those who are more profitable and more supportive. This means you have to be prepared to fire your troublesome or low-paying clients.
Secret # 20: Remember — Every Person Is Special
Every human being is valuable, and all people deserve to be treated honestly and humanely. We’ve all see arrogant business owners disregard those they view as below them in stature. Avoid this offensive quality. If your business associates see that you treat everyone — including service people at receptions — with kindness and respect, they will naturally extend that respect to you. Treat everyone as you would like to be treated. People will notice, and it will come back to you in prosperity. HBM
Robert Spiegel has owned a number of home-based businesses, both in writing and publishing. He has written five books on home business, including the Shoestring Entrepreneur’s series from St. Martin’s Press.