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SEPTEMBER 25, ISSUE #37
The
Potential Downside to
Starting a Home Based Business
By Angela Wu (c) 2003
Home businesses are an increasingly popular option for people seeking a way
to earn an income in a way that better fits their lifestyle. The benefits of
starting a home business are often highly praised -- some of these benefits
include:
The flexibility to schedule your day in whatever way is appropriate
for both you and your business.
The independence to make the decisions you think are best for your
business.
The comfort of dressing how you want and working how you want,
provided you aren't meeting with clients.
The tax breaks potentially available to home businesses.
The opportunity to build the income you want, rather than being paid
what an employer thinks you're worth.
Starting a business from home, however, does have its drawbacks. It can
be a wonderful opportunity but it's certainly not for everyone! Consider the
following:
Time. Although you have the flexibility to schedule your day to
a certain degree, the amount of time required to start and build a home
business is significant. A comment that sums it up nicely is, "I get to
choose any 20 hours a day that I want to work!"
All business involves risk. You may be a wild success... or you
may work endless hours, invest a lot of money, and end up with a failed
business. There is also the risk that you may grow too quickly and be
unable to properly manage your growth. This can lead to unhappy customers
and the eventual demise of your business.
Financing may be difficult. Due to the risk associated with a
home business, some lending institutions may refuse your loan application
or may provide with you inadequate funds or a higher interest rate. You
may have to consider using funds from your "day job" to help finance your
startup business, personal savings, or perhaps loans from friends or
family (which may create problems of its own).
No benefits. Because you will be self-employed, you are
responsible for funding and managing health and dental benefits.
You have to do everything yourself. Most people start as the
sole "employee" of their fledgling business. As such, you're not just the
product designer & developer, but also the marketer, administrative
assistant, cleaning staff, customer service rep, and possibly other roles
as well.
Getting customers. When working from home, you don't really
have a "storefront" -- and zoning regulations may prevent you from
displaying a sign in your yard. Even if you could, the flow of traffic
through a residential area is not likely to be very high and thus it may
be harder to attract new customers. It's your responsibility as a business
owner to find out where your prospects gather, how they like to be
contacted (direct mail, niche magazines, etc), and whether you're up to
the task.
Assumptions about your "free time". Unfortunately, many people
believe that "working from home" doesn't really amount to "work" -- and
sometimes friends and family may "drop in" or call for a chat while you're
working. Some people find it very difficult to turn away "guests", even
though they're clearly trying to work.
Isolation. Working in an office environment provides you with
plenty of opportunity to socialize. In the home, however, you are far more
likely to be limited to the phone and to email -- and some home businesses
have even little need for that. It can make one feel "cut off" from the
rest of the world and lead to loneliness.
Lack of support. One common observation from home business
owners is their spouse or other family members get impatient with their
efforts -- there may be a misconception that you're doing nothing but
sitting around the house, particularly when the business is in the startup
phase and hasn't yet started to produce profits.
Difficulty separating business and personal matters. Since
you're at home, you may be expected to do household chores, watch the
children, drive relatives around, etc. Family and friends may not entirely
understand that you are operating a business and need the time to attend
to business matters.
About The Author
Angela is the author of "So You Want to Work from Home!", an informative
report packed with useful tips and resources on how to begin a work-at-home
career. Pick up your copy today at:
homebasedwork.com/report.html
