Starting a home business venture is an exciting time, and the last thing anyone needs is to get bogged down in technical difficulties or run out of money before making a sale. The decisions you make early on can have a magnified effect on your chances of success while the startup is not properly established with paying customers and clients. That’s why, for home business entrepreneurs, making the right decisions on where to focus your time and where to invest your money can make all the difference.
As an entrepreneur I’ve had businesses fail, I’ve had businesses succeed, and I’ve even had one that failed and then succeeded (although that’s a story for another time). Through all of this I’ve managed to make virtually every mistake in the book, but I’ve learned a few important lessons that I’d like to share with you.
Hopefully, in the very least, I can save you some time, effort and money and make your path to success a bit straighter and wider.
5 tips for starting a home business
Reign in enthusiasm.
Explore your idea fully.
Get to market quickly.
Find a way to make money quickly.
Be prepared to pivot.
1. Reign in enthusiasm.
It can be the hardest thing in the world to put your passion and energy on hold to do a whole lot of boring business planning and research. But it really has to get done.
Starting a home business is not a sprint.
At best, it’s more like the 5,000-meter steeplechase you see in the Olympics — with people falling and tripping and trampling each other. There are obstacles in the way. The path is never straight. It’s not easy.
Passion and enthusiasm need to be kept bubbling away. They keep you going for the long haul. Let them burn too brightly and you run the risk of burning out before the business has time to become established.
2. Explore your idea fully.
For one of my ventures, not taking the time to fully explore the potential of an idea was a huge mistake on my part. In this instance where I went wrong is pretty obvious, but it’s not always so clear. I’ve worked on other ideas where the true potential was a long way from the original business idea and model, requiring a lot of time and planning to bring to the fore.
It pays to share your ideas and concepts with (hopefully) trusted people.
I understand why entrepreneurs are hesitant to share their business ideas with family, friends and colleagues. There’s always the risk that someone will take the idea and do it themselves. Sure, I concede that point. Although it’s still hard to get to market — even if the idea is stolen.
But while there are risks associated with sharing, there are also advantages. Really big advantages.
Assuming the people you share an idea with have (to a reasonable degree) your best interests at heart, they will often spot angles, connections and new potential that you might have overlooked.
Different people have different social networks. They have different business connections. They have different information rattling around in their heads. All of this means that they can bring tremendous value to your idea for very little effort. For example, they might know:
- Your first customer
- Your first investor
- How to save on costs
- People who can lend stuff and helping hands (often free of charge)
- How to find equipment, tech, hardware, software
They might mean the difference between success and failure because they can help you shine a light on less obvious areas and aspects of the idea. I would strongly recommend you find a copy of Steven Johnson’s TED Talks, Where good ideas come from, because it explains why it’s so important to involve more than one mind in virtually any creative process.
3. Get to market quickly.
Ever hear of a minimum viable product (MVP)? It’s a useful concept for entrepreneurs because it represents the earliest point at which you can start trying to sell your product/service to the first customer.
Find out what your minimum viable product is and work out how to get there as quickly as possible.
Get out there and meet the companies and people you need to get started. Find and build relationships with manufacturers. Find out where your warehouse or factory is going to be located. Even if you plan on selling a service rather than a product, make a name for yourself. Speak to people. Build alliances.
There are two advantages to this:
- Potential partners can often provide helpful information, insight and new opportunities. They bring real world advice from people who are already working in the industry.
- Early stage customers often provide the most useful advice and feedback on your offering that you will ever receive.
I spent all my time in a dark room writing code and improving a service no one knew about and no one expressed any interest in (mainly because I had approached only a small subsection of the overall market). If I had reached my MVP and dedicated the rest of my time to exploring my niche, I might have improved the chances of succeeding the first time around.
4. Find a way to make money quickly.
A vanishingly small number of home-based startups actually make a profit because there’s a lot of competition and barriers to entry in almost any sector.
Securing a trickle of funds as early as possible is vital — it gets the business in front of customers and reduces the financial burden of starting up, allowing the company to operate for longer (many small businesses are bootstrapped and fold because they run out of funds before the business can become established).
But making a sale is something that requires a lot of moving parts that work together behind the scenes — especially if you’re going to have an online component to the business (I would say being online is no longer optional for small and home businesses).
A good online marketing campaign should follow these steps:
- Understand what revenue streams are open to your business online.
- Identify target users.
- Identify conversion points and develop sales funnels to drive qualified traffic to those conversion points.
- Learn how to create great content (in order to pull people into your sales funnel(s)), including SEO.
- Identify influencers and build relationships with them.
- Build a social media following and email marketing list.
- Network online and offline to build your own influence.
- Be creative and think outside the box for new strategies and ideas.
- Keep learning.
It’s a favorite saying of mine that I think applies to virtually any type of small business: No matter what business you are in, the business you are in is marketing.
It’s amazing how much easier it is to start a new venture when there is even a trickle of revenue. Do everything you can to get some cash coming in, and you’ll be able to keep at it long enough to start paying people to do all the little things you wanted to do (like tweaking your logo design, making your website perfect, etc.) but didn’t have time for.
5. Be prepared to pivot.
No matter how much time and energy you pour into understanding your own idea and how it will fit into the market, it’s quite likely that the market will want to take you in strange new directions.
There’s absolutely no point in being sentimental about the direction your business takes. Be agile and adapt to what the market wants.
While each business is unique and what works for one might not necessarily work for the other, the important part is to always be on the lookout for opportunities whether they require a pivot or not.
You might have a viable product, but have yet to fully explore all the possible markets. You might have a service that needs tweaks and improvements before it can take off. Or, your goods might be ready for the market, but you’re in a need of a different business model. The only way you’ll work out all the kinks is to be open to new ideas and information, make a big effort to interact with a diverse range of people, and be dedicated and persistent in your efforts.
I sometimes wonder how many failed startups were sitting right on success’s doorstep. Perhaps all that was necessary was looking to take the business in a different direction or analyzing the idea from a different perspective. So just remember: if you’re starting a home business, don’t be afraid to be flexible. Measure your enthusiasm, fully vet your ideas, get your product or service on the market, bring in some capital — even if it involves a level of scrappiness — and don’t be afraid to shift directions.