Business StartUp

How Do I Start A Home Based Business?

How Do I Start A Home Based Business

One of the most difficult questions in starting a new business is “where do I start?” We see other, established businesses and the task of achieving the same seems impossible.

Don’t let people tell you your ideas are stupid – if you’re really passionate about something, find a way to build it.

Dennis Crowley – Co-founder, Foursquare.

Research has shown that customer-focused businesses are more successful than product or service-focused businesses. What this means is that focusing on the source of your revenue (customers), rather than on yourself is almost always more successful.

Given this, the starting point should be to research your potential customers. A good framework for your research is the 5 W’s.

Here is an example of the 5 W’s for a home-based gardening business targeting working couples:

  1. Why? Why would they need your service? Maybe it’s because, for them “time is precious, not to be wasted maintaining the garden.”
  2. What? What type of product or service do they prefer? Do they want to do planting themselves, but leave maintenance to a regular service?
  3. Who? Who is your potential customer? What is their life-stage, family situation, attitudes (like health-consciousness).
  4. When? When do we need to offer the product or service? Do people prefer to have garden maintenance done during the week, when they are at work, or during the weekend, when they can interact with the garden maintainer?
  5. Where? With garden maintenance, this may be obvious. But, if we were selling art, do people prefer to browse in a retail store, at a craft market, online or is there an opportunity to bring a selection to their home?

Once you have answered these questions and defined your customer and his/her needs, you will be in a position to start planning.

Our business plan is a one-page spreadsheet with the key elements that serve as our compass.

These are:

  1. Vision and mission: A vision is a picture of where we are aiming to get to and a mission is the path we intend to take to get there.
  2. Goals and measures: The specific targets we are aiming to achieve and how we will measure our progress.
  3. Action plan: The detailed weekly plan, which we refer to every morning. It enables us to monitor whether we are on track or not.

The main benefit of starting with proper planning is that it forces logic and discipline into the business. And, if you intend to borrow finance to fund your business, having a written business plan will greatly improve your chances of persuading your bank to lend you the capital.