Get Organized To Earn Money from Home
by Bonnie Rice
Many small businesses don't last the first year. Experts will give any number of reasons, but they all come back to poor planning. When you fail to plan, plan to fail. While it is nearly impossible to "get rich quick" by working part time out of your home, it is possible to start a successful home business if you take the time to think things out before you start.
One mistake people make is to dig into the "opportunities" advertisements with no idea of what they want to do. While there are people who could sell anything, it's much easier (and more fun) to sell something you really believe in and enjoy talking about. Instead of looking at what's "out there", look inside yourself. What are your interests and hobbies? Is there something you do for fun that you could be doing for money?
Don't automatically dismiss an idea just because no one else is doing it or because it doesn't seem there would be much of a profit. Think it all the way through. If you started with one interest, could you branch out later to related interests? Could you start with one product and actually make money from a related product. For example, I've seen decorated goose statuettes in many yards around here and wonder who's making the real money--the person selling the geese or the ones who sell the seasonal costumes for them. You could do both. Choose a product that will get you talking and start there.
The next mistake is to start without a plan. You need to know what you will produce (your product or service), but that may be defined by how you plan to sell it and to whom. You might want to change your product or service slightly to fit the people you can sell to easiest. Or maybe you will adapt your advertising to fit them. Either way, know who they are and how to contact them before you start or you may find that your message is going to all the wrong people or that your product isn't really what they want.
There are many books on planning a budget for a small business and because so much depends on what type of business you choose, I won't go into a lot of detail here. Remember that you need to figure in ALL the costs of doing business and figure out how you can earn more than you spend. One way to look at this is to use the tax forms you use to figure your businesses profit or loss. On the US 1040 Schedule C there is an itemized list of common business expenses.
At the end of the year you'll want to think of as many business expenses as possible to reduce your tax, but early on it's easy to ignore expenses to try to fool yourself into believing the business is doing better than it is. Start with the tax-time mentality and prepare accordingly. It may mean that you shouldn't plan to spend any business money that comes in for the first year or two--because it will be needed to keep the business going. It may mean that you need to have a bigger savings account before you start. The important thing is to be prepared.
Unless you want to depend on a few regular clients, advertising will be an ongoing expense. Plan to advertise as much as possible--it's one of the most important parts of your business. If you aren't an "advertising" or "writer" type, you may want some help with advertising. You can start by getting a clear idea of what you want to tell your potential customer. Write a friendly letter explaining all of the benefits of using your business. Use "you" and "we" instead of "someone" in your letter. Answer the question: "what's in it for me?" for your customers. Include information on how to become a customer--the number to call, where to find the product in local shops, where to write for more information, and your web-site URL if you have one.
Use the letter as the basis for your marketing plan. Pick a key phrase and repeat it everywhere. Use your list of benefits. Include at least one every time you address potential customers. Keep rewriting the letter as your business grows or changes--or as you discover new benefits.
If you have found a business idea that excites you and written a basic business plan that includes a complete and accurate description of your business, where to get the money for basic expenses, and who to sell to and how, then you are ready to open your business. Start off on the right foot with press releases to any and all appropriate news sources--a new business is always news and an announcement will bring in the first few inquiries--perhaps a few customers. Well, don't just sit there daydreaming. You have a business to run!
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save and I could use help dealing with it! or No, debt is not a problem but I am trying to get ahead financially!
More Money Tips & Tools
- 10 places to look for $500 in savings
- 9 savvy strategies to save for a rainy-day fund
- 5 big bills you can cut fast
- Money-saving secrets of the rich and frugal
- Do you pay more becasue of variable pricing?
- 5 financial strategies from King Solomon
- Getting a reluctant spouse to consider credit counseling
- This week's Readers' Tips