I’m speaking in a few months to a group of women who are in the early stages of starting home-based businesses. Having been self-employed for years, I am a huge fan of the micro-business revolution, and of course, I’m familiar with the evidence that an hour spent commuting will probably be the most miserable hour of your day.
So yay, working at home. But in our excitement about working in our jammies, it’s easy to lose sight of the business aspect of home-based businesses. Here are a few questions and thoughts for people who are looking at starting a new form of cottage industry.
Choose work that interests you. A good question to ask is would I still be interested in this business even if I couldn’t do it at home? I’d still want to write books and articles even if I had to go somewhere to do it. Writing at home is more convenient, but it’s the substance of the work, not the location, that drew me to it. Asking this question will increase the chances you’ll stay motivated, even through rough patches with your business.
Choose work that’s remunerative. Another pet peeve: people get so excited about work that can be done “from home” that they don’t demand appropriate compensation. Even if you don’t have the same real estate overhead as a traditional office, you’ll have other expenses, and your time is valuable. When figuring out your rates, aim for compensation you’d be OK with even if you did have to commute.
Give yourself time. Just because you’re at home, if you’re planning on working, you can’t really be “at home” with your children at the same time. If your kids aren’t in school yet, you’ll need to figure out a system for getting adequate hours to invest in your business, especially as you’re starting it up. For most people that means paying for childcare, though if you have a partner or relative who’s up for watching the kids, that works too. Some people swap childcare with neighbors or friends. I’m not saying it has to be 40 hours a week, but starting a business is far less stressful if you know you can take a client call at 10 a.m. without interruption.
Think “food truck” innovation. One of my new favorite concepts. Some new businesses are like starting a restaurant: expensive and risky. You go out with one big idea, and if some element is wrong, it’s hard to retool. But other businesses are like food trucks. They’re less capital intensive, and the point is to try things, see what works, and do more of the things that work and less of the things that don’t. Retooling is much easier (you just move your truck if a location is bad, or change your menu board if yesterday’s grub didn’t sell). Blogging is helping me be more efficient in trying ideas out before I, say, write a book proposal on them.
How would you scale up? It is always possible that your business will become successful. Then what? You have 168 hours per week and you can’t work for all of them. Will you hire people? Will they come work in your house? Would you still work in your pajamas then? (answer: no. Not appropriate, unless the employees are related to you). Will they work from their homes? Do you know how to manage a virtual workforce? Would you ever rent office space? What if you have inventory -- where are you going to be storing this? Your garage and basement have limited capacity. These are happy questions, but worth thinking about. You can make the choice to stay small, but then you need to figure out a plan for doing that.
What’s your exit strategy? You may intend to do the substance of your work until you retire or die, but maybe that’s not your goal. Would you ever think of selling your business? Would you pull the plug if revenue didn’t meet a certain threshold? How long are you willing to experiment?
I’m always looking for stories of business challenges and what people learned from them, so if you’ve got a home-based business and a story to share, please let me know.
In other news:
A few links. At CBS MoneyWatch, I'm blogging about How companies can make work less painful. I also ask Do you have a plan for flu season? We got hit with one of the nasty stomach bugs going around this week. I hope you all are staying well!
Photo courtesy flickr user Desiree Tonus