Monday, July 23, 2007

Starting an in-home business

LexisOne reprinted Tips For Starting A Home-Based Business from the Associated Press. I suggest reading the entire article but since I am not sure how long the link will persist, here are the high points:

Here are nine other considerations for those operating or considering a home-based business, according to small-business experts:

1. Start with research. Explore business structures on Web sites such as from the Small Business Administration. Seek feedback on your business plan from seasoned volunteers at SCORE, Counselors to America's Small Business.

2. Do a detailed analysis of costs to figure out how much money you'll need. Forecast three scenarios: a best-case, realistic and worst-case financial picture. Karen Belasco, founder and "chief cookie counselor" of Good Fortunes, a personalized cookie business in Canoga Park, Calif., said she wishes she had spent more time learning about cash flow and the bottom line when she started the company in 1995. "I really lost money for a very long time and we couldn't figure out why," Belasco said. "There were certain hidden costs we just weren't seeing." Still, Good Fortunes has grown to do just under $5 million in annual sales. "My drive and determination was what kept me in business," she said. "I could've used some basic tools at the beginning that probably would've gotten me here a lot faster."

3. Overcome distractions and designate a space in the house for business activity. "Carve out a space where you actually go," said Charles Matthews, executive director of the University of Cincinnati's Center for Entrepreneurship in Ohio. The kitchen table doesn't cut it, he said. "Select a location that's exclusively devoted to your business. It doesn't have to be huge but it has to be effective and efficient, especially if you have clients visit your office."

4. Be your first investor and keep funding sources close to home at first. Start with family, friends and home equity before seeking angel investors or venture capital, Monosoff said. "You have to believe in what you're doing with conviction, and you have to invest in yourself with education and time and money before you can expect other people to support what you're doing."

5. Consider entering contests and business-plan competitions that can help fund and guide your business.

6. If you have trouble securing a bank loan, consider applying to the SBA or microlending organizations. Monosoff recommends sites such as, and, which are run by nonprofit organizations that offer loans up to $25,000, plus coaching, she said. "To have that combination of the funding to give you the seed money and the mentoring is just invaluable."

7. Outsource high-level business functions such as accounting if you don't have the background or time to do a competent job. "A lot of accountants and attorneys will give you a consultation for free," Monosoff said. "Be sure to ask that before you go." Ask for and check references before turning over the bookkeeping, Nemeth added.

8. Ask family for support or consider hiring someone to do the domestic work if you feel overwhelmed. Relinquishing tasks such as child care, housecleaning, cooking and grocery shopping can help you carve out time to focus on the business. If you can't afford to pay for help, look for programs offering free activities for kids in your area. Contact your local Chamber of Commerce.

9. Have an exit strategy. Can you sell the business, pieces of it, or license the product if you no longer want or can afford to continue?