Do Your Research Before Starting A Home Business

Posted By on Dec 16, 2014 |


When you start a home business, you need to be prepared. Do your research, study the situation, and be well-informed before you jump in. Don’t build that garden studio without researching zoning restrictions. Don’t hang out a shingle until you know if you need a license.

Startup Costs

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How much is it going to cost to start your home business? There are many direct sales companies that are geared toward helping people work from their homes. With these direct sales companies, you usually buy a sample kit to use for display at your sales events.

These sample cases can be expensive – anywhere from £100 to ten times that. Make sure that you can sell all of the samples for your TOTAL investment. This includes paperwork, which may or may not be extra expense, setup materials, and support materials.

If you are selling a service or a product you produce, what are your startup costs? A friend of mine has an extensive music studio, with 3 pianos, 5 keyboards, a drum set, xylophone, microphones, speakers, iPads, and on and on and on. Her startup cost was one keyboard, 20 years ago.

My startup cost was even less. I started my writing business on a £35 used laptop.

Your needs will vary. Every business these days needs a website, but that is almost negligible in cost. If you will be taking online orders, read reviews about various hosting programs and their room for expansion. You will need a shopping cart function, an online catalog with room to add pages, and the ability to take credit cards and PayPal. While none of this is extremely expensive, it all adds up.

If you take orders, it also means that you probably have inventory. Where will you keep it? If you are selling for a third party, what are their safeguards and guarantees that the goods you sell will be available?

Will you need office space? If you will be seeing clients in your home, then you probably need an office. If you must remodel or add on to your house, check zoning laws. Permits are not usually expensive, but again, it all adds up.

Research the Market

Market Research

Is there a market for your product? You may have a core customer list that will get you started, but if you plan to grow a business, you need a product that will appeal to a large clientele. Study market saturation for your product. Again, with direct sales, chances are there are others in your area selling the same thing, so do your research to make sure there is room for expansion. The Direct sales company will tell you there is plenty of room, but find out for yourself.

Remember that only franchises have territories. Home businesses cannot claim territory. You can build customer loyalty, and get referrals, but you cannot keep other businesspeople from setting up shop in your area.

Finally, find out how much you can really make. When calculating per-hour pay, count the paperwork, delivery, and other non-product related time.