How to Avoid Failure By Starting Your Small Business from Home

Nearly 90 percent of people state that at some point in their lives they’ve dreamed of starting their own business, yet few make the initial effort. Often it’s due to lack of funds or personal commitment, or just the fear of failing. And although it’s true that only about ten percent of new businesses do succeed, the reasons why the other 90 percent fail appears to be related to the lack of planning, primarily financial. Starting your business on the home front is one way to reduce start-up expense and risk. The founder of Dell Computers was a college dropout. Starting out of his garage, he managed to excel above all of the world’s top computer manufacturers. One in three computers sold today is a Dell.

I knew of a couple who had a strong desire to start their own business. They both had worked at the same local business for more than 15 years. The husband was practically a master of all trades. When I met up with them, they were a day away from selling their home to buy a lube and tune business, property and all. I convinced them that selling their home to buy a questionable business was extremely risky and perhaps they should be looking at a business they could start from their home with less at stake. The couple took my advice (scary for me) and backed out of the deal. They began researching the needs in their community and found that mail theft was a huge concern. So with less than a $1,500 investment ($1,000 for a limited contractor’s license) they started a company which sells and installs locking mailboxes. They are able to operate the business from their home and by doing so are saving thousands of dollars in profits. After just six months, they have been able to make their living solely from the business.

Business start-up and general business operations can be expensive. Things such as commercial space rent, utilities, and added insurance costs can consume a great portion of business profits. Obviously, the less expenditures each month equals more in pocket income. Keeping costs down is one way to improve the odds of long-term growth and success for any business. Since as many as nine out of ten new businesses close in their first year, and knowing that the primary cause of those failures is lack of financial planning, you can see how important it is to create a doable financial plan for your business start-up and long-term expense.

If you are considering starting up a business of your own, do the proper planning. Research the industry you’re interested in, and see where the closest competition is. Read books and get yourself educated about your new business. Avoid taking large loans to fund your new venture. Instead, keep your business idea in proportion to the amount of money you have to invest. There’s always a way to work out your idea without exceeding your means. And if it’s at all possible to start your business from your home, do it.