After reading Pinyo’s article entitled 7 key factors to Build successful alternative income streams. It really got me thinking about the various aspects of our personal finances and how appropriate each one is. In the article Pinyo makes an excellent point right at the start in which he comments
Do what you love, if you hate writing don’t start a blog or try to start writing for money.
Whilst this sounds basic it is in fact very insightful because how many of us, and I include myself, pursue income streams that are totally unsuited to our individual skills and expertise?
So in light of Pinyo’s thought provoking article I thought I’d examine some of the key elements of developing a successful home based business, which is likely to incorporate a wide variety of income streams, as many of you will know well, from having to fill in your rather complex end of year tax returns!
Is a home business right for me?
Before embarking upon any home business you need to firstly ask yourself a simple question is a home business right for me? People incorrectly believe that working from home is a dream job and associate home working with a more relaxed lifestyle. In reality this confuses the boundaries between social, home and business life and whilst the ideal of rolling out of bed in the morning at 10am and commencing work from your study in your pyjamas is appealing, the reality is that creating a home business can be very stressful if boundaries aren’t defined.
I have prepared some useful guidance that may be beneficial in helping you create a successful business.
1. Designate a room as your office
This is perhaps the most important starting point. Having a room in which the door can be closed at the end of the day is important. Many home businesses fail because the owner is unable to separate work life from home life and they become distant from family members as they are unable to switch off from work.
Medical research also suggests that home workers can often suffer from sleep disorders as they often work, eat, sleep and drink in the same room and therefore find it difficult to separate work and family commitments, which can leave them stressed and anxious at night.
2. Set strict boundaries
Often the nature of home businesses means that other family members are at home and it is essential to sit down with them and agree a timetable of when you are at work and when you are in family mode, so as not to distract you from the day to day development of your business and ultimately your income source.
3. Research your market thoroughly
Most businesses fail because of poor, inadequate or non existent research. Don’t presume that your product or service will be instantly appealing to your customers. Market research is essential and this can take a variety of forms from questionnaires in which you ask potential customers a series of questions to gather their preferences through to researching similar products and there appeal to customers.
The Internet is an invaluable source of information which can be utilised to gather important details. If you are on a limited budget, look to sign up for free chat rooms with a specialism in your chosen market and start speaking to people, try MySpace, Bebo or Facebook for example.
4. How easy is your business concept to copy?
Working from home can encompass a wide variety of disciplines but before you invest think about how easy your business concept is to copy. If your concept is easily copied by others then this may prove detrimental as other competitors can easily muscle in on your market. Consider copyrighting or patenting a really good concept.
There is a great example of a woman who wanted to set up her own home business to free up her time with her family. She came up with the idea of selling attachable gloves for prams (aka strollers) as her detailed research had revealed that in winter parents often got cold hands from pushing prams but often forgot to take a pair of gloves with them. These gloves stay attached to the pram and the person can quickly and easily slip their hands in and out of them.
The home business owner realised that her concept could be easily copied by larger firms once her product had been introduced to the market and successfully obtained a patent that protect the concept of attaching gloves to a pram, push chair or buggy. This was a winning idea and meant that her business could be easily developed without fear of other competitors muscling in on her market share, therefore creating her own niche.
In conclusion, be clear about whether creating a home business is right for you and be disciplined in setting boundaries dividing up work from social time. Good research leads to a successful and thriving home business as it sets a good foundation from which to develop. Remember that creating a successful home business requires patience, determination and single mindedness.
Contributor’s articles are written by members of the personal finance community. Each article was reviewed Moolanomy’s editorial team before its publication.