If you're thinking of starting a home-based business, you're probably aware of some of the obstacles you face. But, can you overcome them? Here's a look at 9 reasons NOT to start a home-based business - at least if you're not capable of overcoming them with a little work and determination.
1. You Don't Have a Nest Egg to Start a Business
Regardless of what type of home business you want to start, you need to expect that it will take some time until you start seeing any sort of income that will support you. You can also expect that you'll have some startup expenses and that you'll need to pay estimated taxes. All of these things take money.
Ideally, you should have at least 4 to 6 months of your expenses to draw from. This will give you some time to get your home based business established and, hopefully, establish an income stream from your business.
Workarounds for this Obstacle
If you have access to inexpensive credit or investors who are willing to take a chance on your home based business, or if you have a spouse or significant other who can earn enough to pay your bills while you are getting your business established. You could also consider either starting your home-based business on a part-time basis or taking a part-time job until your business is capable of providing a steady revenue stream.
2. You Can't Get or Afford Health Insurance on Your Own
It's pretty risky to go without health insurance. One substantial illness or injury and you could be bankrupt. If you are going to operate a home business full time, it will be up to you to figure out how you will get health insurance at a rate you can afford. If you have any kind of illness or past medical history, getting health insurance on the open market is nearly impossible, especially as you age.
Ideally, you have a spouse who can get you health benefits on his or her group policy at work. This would provide you with a reasonable premium and in most plans, eliminate the need to pass medical underwriting that might otherwise result in an insurer refusing to cover you.
Workarounds for this Obstacle
You might be able to join a professional organization or union as a self-employed individual that provides group health coverage to its members, although these are becoming increasingly rare and even these policies are getting tougher to afford. Some states do not permit medical underwriting - health insurers are regulated to "take all comers" regardless of any medical conditions you might currently have or have had in the past that have since been addressed.
Higher deductibles can provide affordability to some who are otherwise insurable. A savings program, a tax-deductible medical savings program, or combination of the two, can help you pay your deductibles while you operate your home based business.
3. You Hate Taking Risks
You don't want to place yourself in a situation where you can't sleep at night. Remember, having your own business provides a great sense of freedom and independence, but it comes with the risk of no steady income and making your bills every month can be a very challenging and stressful experience.
Workarounds for this Obstacle
It's very hard to change the emotional part of your dislike for taking risks. The best thing you can do is to provide some sort of safety net. Having that available should make you feel more confident and will go a long way toward reducing your stress levels. Additionally, while many argue that entrepreneurs must be "risk takers by nature", there is such a thing as a foolish risk and a calculated risk. Doing your homework to understand what the real risks are and what their impact could be, will not only help you better prepare for them, but can also help you to better identify which risks you absolutely must avoid in your home based business.
4. You & Your Spouse or Live-In Don't Get Along
If you are married or are living with a significant other or even a roommate or parent, everyone needs to be on the same page. If you are already constantly arguing or fail to see eye-to-eye on most issues, running a home business is going to be extremely challenging or nearly impossible. After all, you don't want to make your day-to-day living situation worse than it already is. With a home-based business, your day-to-day will probably involve being home most days, nearly all day long. That means you'll have little opportunity to escape a tense situation whenever your partner or roommate is also home.
Workarounds for this Obstacle
You need to have frank and honest discussions with your spouse, partner or roommate. Look for ways you can meet half way. Be supportive and try to understand your partner's needs and concerns and ask that he or she do the same. Try to resolve your problems BEFORE you actually go ahead and start your home-based business. Consider counseling if it seems warranted for your specific situation.
5. You Lack the Self Discipline Required for a Home Based Business
Being your own boss in a home-based business will take a tremendous amount of self discipline on your part. There won't be anyone telling you what you should do or when you should be doing it. You'll have the distractions typically found around the home - TV, web surfing, the kids, etc. - competing for your attention every day. If you're accustomed to following instructions and having someone else lay out the details for you, chances are very good that you will not be successful in a home-based business. Success doesn't come easily - it requires persistent hard work - perhaps even harder work than you've ever had to tackle.
Workarounds for this Obstacle
Prevent distractions by setting ground rules in the house. Set a schedule for your daily routine and make sure your family members respect and understand it. Even if your clients aren't setting deadlines for you, set your own and aim to meet them every time. Keep track of the hours you are working on a regular basis. That way, if you slack off you'll see it right away - before it's too late. Set specific production calls - I'll make so many calls today, or write so many articles, etc. and then reward yourself for meeting those goals.
6. You Don't Know What Kind of Home Based Business You Want
I often receive email from readers indicating they are anxious to start a home based business and they want me to tell them what home based business they should start. The point is, no one can tell you what home-based business you should start - you have to decide that on your own. If you know you want to start a small, home based business but don't know what to do - wait until you've figured that out. Otherwise, you'll go from business to business and never realize success.
Workarounds for this Obstacle
You need to do your homework, and that includes understanding what makes you tick, what turns you on and what you are good at. You need to have a good idea of what your passion in life is all about because if you can follow your passion, your chances for success in your home based business are much greater because it will drive you to do whatever is necessary to succeed.
Also, don't expect to be successful right off the bat if you have no experience or skill level related to the home-based business you want to start. You would be far better off getting experience from someone else first before going it alone. That way, you'll have a broader understanding of the challenges and potential pitfalls that await your home-based business before you encounter them and you'll increase your chances of being able to overcome them. You'll also be better able to market yourself since you can point to your first-hand experience and be better able to explain to a prospect why they should pick you over your competitors.
7. You Lack the Self Confidence Needed to Run a Home Based Business
Running your own home-based business means you have to believe you can succeed. If you don't you're basically wasting your time and money. You need to be able to handle rejection - not every prospect will turn into a paying customer, and you need to have confidence in your abilities or you won't be able to convince others to have confidence in you.
Workarounds for this Obstacle
Start small - preferably even before you start your own small home-based business. Look for something you can accomplish and then do it to the best of your abilities. Be proud of your accomplishment and start building on your success. It also helps to have others who believe in you - especially when things aren't going so well. Occasionally we all need a pep talk to get back in the game or get back up on the horse.
Believe that you DESERVE success and that you are very capable of achieving it. This is very difficult to overcome if you've spent most of your life with self-esteem issues, but it doesn't mean it's impossible. Sometimes a trusted partner who can help you with your small business can also get you through the rough times.
8. You Don't Have the Time to Run a Home Based Business
Starting and running a home-based business is going to take up a LOT of your time - probably much more than you ever thought it would. Even before you start, you'll need a considerable amount of time to plan and research. After your small business is up and running, you'll need plenty of time because it's likely that you'll be working more hours than you worked as an employee because you'll be wearing all the hats.
If your time is already over-extended - with social activities, family obligations, etc., you need to be sure you can devote the time your business will need to survive and prosper.
Workarounds for this Obstacle
It's easy to say that we're too busy - for exercise or for operating a home-based business. If you really want your own business you're going to have to find and make the time. See if you can get other family members to help you with some of your obligations. Try to set aside specific times for your home based business - including the time you'll need for preparation.
Keep track of the time you spend on your business and non-business activities because it will help you find areas where time is being wasted or could be better spent on more fruitful activities. You may also discover that you really do have the time - you're just not 100% sure you want to start a small business and you've been using time as an excuse or "safety valve" to protect you from your fears. If that's the case, this is probably not the right time for you to start your business.
9. You Have No Tolerance for the Record Keeping Needed in a Home Based Business
Maybe you're the type who just wants to go out there and DO IT. However, operating a home-based business takes some discipline in bookkeeping and record keeping in addition to all of the fun stuff you'll be doing. At the very least, you'll need to keep good records for tax purposes, like earnings and expense and you'll also need to keep good records on your clients so you can stay on top of who's paying on time and who isn't.
Having a good record keeping system and documentation on your business also helps make it easier to sell your home-based business should you want to do so later on. Just because your business is home based doesn't mean you can neglect your record keeping.
Workarounds for this Obstacle
If you just can't stand keeping records, you could look for software to help you manage your bookkeeping and record keeping tasks. You could also consider having a partner or friend with good small business bookkeeping skills handle the bulk of these tasks for you.
Even if you don't prepare your own tax returns, your records need to be well organized and complete to make things easier on your tax preparer and to make sure you get the deductions you have coming to you.
No comments:
Post a Comment