14 May 5 Questions to Ask Before Starting a Home-Based Business
Necessity is the mother of invention, and right now, lots of people are in need of work. If you have been juggling the idea of launching your own business, the pandemic might be the sign you have been waiting for. Whether you have been laid off or have a creative solution to the problems we now face, work that you are truly passionate about can be an outlet. Even during challenging times – after all the biggest industry disruptors and most successful businesses are born of trying times. To help you on this new adventure, here are key questions to answer when starting a home-based business:
1) What’s my Business Model?
Rephrased, how will your company make money? This question can be answered with a number of smaller questions, which will also assist you in creating a sales funnel. Who will you serve? What problem(s) will you solve? Why should they care? How do you make your solution matter to your customer(s) or client(s)? Too often, new entrepreneurs get hyper-focused on details, service offerings and logistics without taking the time to define an overall business model that is profitable. The answers to this set of questions are key to building a successful business strategy
2) How Does my Lifestyle Need to Change?
When starting a home-based business your lifestyle will change. That is a fact. Working from home can be especially difficult, with disruptions and distractions that leave you feeling unproductive. To help, establish a routine. This will effectively reduce stress, cultivate positive daily habits, and focus our time on areas that are the most important. For more details and tips, check out our recent blog where we shared tips on how to maintain a routine (and some level of sanity) while working at home.
3) What Licenses & Insurance Do I Need? What Taxes am I Liable for?
Every state and county will have a different list of requirements for businesses to operate in their jurisdiction. As the business owner, it is your job to research and know what you need to have (as well as set the annual renewal reminders in your calendar). A small business CPA is a good person to guide you through the right business structure (LLC, Sole Proprietorship, etc), licenses to maintain these and a tax strategy. Know that businesses have a lot more taxes to pay than you had as an employee – even with new tax write-offs for home office expenses, marketing and professional support. You will need to track this and set aside money to make quarterly tax payments. Having a separate business bank account and accounting system is crucial here to properly track and organize finances. As for insurance, most businesses will need a general liability policy – look to your home or auto insurance agent for a referral to a business insurance provider (most do not do both).
4) What Mindset Hurdles Will Get in my Way?
An ongoing battle that every business owner will face is their personal mindset. Your limiting beliefs and personal narratives about money, your self-worth, your adaptability, even what defines success are all common mindset hurdles. The sooner you pinpoint and tackle your mental barriers, the sooner they will stop limiting your growth & success and get out of your own way. As the famous saying goes, whether you think you can or think you can’t, you’re right. Bonus! A business coach or mastermind group of other business-owners are great resources to tackle mindset hurdles. These mindset challenges are not unique to you and others can help you see these blind spots more easily.
5) What ‘s Your Why?
Logistics aside, a ‘why’ is crucial to sustaining your home-based business during hard times – and there will be hard times. It is the driving force, a purpose, that propels you towards long term success. It is what makes you get out of bed every morning, despite a bad day or a bad month. Your ‘why’ should also align with who you are serving and the problem you are solving. A ‘why’ goes beyond the money you make. Consider, if money wasn’t an object, what would you do? Is your passion enough to fuel your business?
Are you ready to start the home-based business you’ve been dreaming of? A path is better with a compass and our business coaching services can help. Get started with our guide to Launching Your New Small Business – sign up for your copy below: