Starting your own home business is exciting but also a bit risky. What if you don’t make it? What if you fail? However, anyone who has been in the workplace for a decade or two knows that those risks are inherent with just about any job. At least, when you have your own business, you can count on yourself, right? Here are some risks to look out for when starting your own home business.
Would You Hire You?
What kind of employee are you, right now? Chances are, if you wouldn’t hire you, you will not be able to run a successful home business. You are the boss and the chief employee, and if your work ethic is wanting, your own business will suffer.
One of the risks in starting your own business is in overestimating your own abilities and work ethic. “Setting your own hours” may sound great to a night-owl, but that night-owl may soon find that he or she can stay up late playing computer games, but simply cannot work during the wee hours.
Be honest with yourself, and determine what kind of employee you are. If you are undependable, not too bright, or just plain lazy, then starting a home business is a joke.
Underestimating Startup Cost
One of the biggest risks in starting your own business is that you may underestimate your startup cost. Then, once you have determined the startup cost, how much will it cost to continue working?
Some home businesses have virtually zero startup costs. For instance, I started my writing business with a second hand laptop someone gave me. No startup costs at all, and now it is my main source of income.
However, not all startups are like that. If you are going to have a studio for dance, music, or art, there will be an initial expense in getting the proper equipment and remodeling the spaces you need. Then, how much will it cost to maintain that equipment? Find out, and be prepared.
Not Knowing the Law
One of the most devastating instances I is ever witnessed was a music teacher who built a small building in her back garden so she could open a music studio accommodating 3 teachers. Then, she found out that zoning prevented her from having cars parked in front of her house or having that much foot traffic.
Zoning is not the only problem. Check to see if certain licensing is required before you can go into business for yourself. You can’t just start keeping children in your home, for example. You have to register with the proper authorities, receive CPR training, attend classes, and allow inspections.
Being ignorant of the law can devastate your business. Find out about all legalities before you start your home business.
If you will be working in other people’s homes, make sure you are bonded to protect you if you should break something. Also, make sure your home is insured in case someone slips on your property. A lawsuit can put a damper on your income pretty quickly.