19 November 2021

Five Simple Steps to Success for Small Home-Based Businesses

Did you know that 60 percent of small enterprises in Australia fail within the first year? That’s a depressing number for those of us who want to establish a small business and possibly work from home.

Is this a sign that your business concept is bound to fail? Not at all! There are things you may do to improve your chances of success significantly. With a little effort and research, you can get up and running quickly. Let’s begin at the beginning…

The brilliant concept

Of course, you must first come up with a concept. Business possibilities are often classified into four categories:

  1. Providing a pre-existing product or service to a pre-existing market.
  2. Expanding the market for an established product or service.
  3. Entering a current market with a new product or service
  4. Entering a new market with a new product or service.

Your imagination is the only constraint at this point in the game. Inspiration can come from anywhere: you may have a pastime that you’d like to develop into a full-time profession, you may have experienced poor service and decided to try to improve it yourself, or you may have a talent that you’d like to exploit.

When you’ve found something you’d want to do, it’s time to look around the market and see what’s available.

Passing the test

So you’ve had a brilliant idea and are eager to pursue it; now it’s time to put it to the test. Assume you have a passion for healthy living and want to distribute a line of lifestyle accessories that promote healthy living through a do-it-yourself method for the purposes of this exercise.

Ask around to see whether there’s a market for healthy-living products. What kinds of goods are on offer? Who would you be up against, and what do they have to offer? Do you have the essential talents to manage a business like this, and if so, what are those skills? What would be the location of your company?

After you’ve answered those questions, you should have a good idea of how your company will operate.

You find some products and decide to do some further investigation into the Vitality 4 Life lifestyle products. Your own life experience, as well as some work as a dietician, have equipped you with the required skill sets, and you believe you’ll be able to work from home, allowing you to spend more time with your family. There is already a market, but there is room for growth. Now it’s time to examine the situation more closely.

Is it better to be or not to be?

It’s time to get down to the nitty-gritty of things. You don’t want to go right in and discover the hard way that the budget isn’t going to work.

To begin, sit down and determine whether you will need to hire employees, which will necessitate paying salary.

If you lease a space, you must be able to pay the rent, and your location must be appropriate for your business and target market (which means you must think carefully about who that target market is). You’ll also need to figure out how much demand there is for your product or service.

Okay, so you’ve determined that there’s enough demand for high-end juicers, sprouters, water filters, and other high-end accessories to justify pursuing a distributorship as a home-based business opportunity. You must now make some marketing choices.

Take a look at me! Take a look at me!

Because advertising can be costly, you’ll want to be sure your money is well spent. More market research is required this time one-on-one. You should profile your consumer groups so that you can target your marketing to the proper people.

Make a questionnaire (a short one, because people lose patience if you go on too long) and hang out outside a few of the local gyms (for our particular example). Make a combination of open (What do you think of…) and closed (Do you have a gym membership?) inquiries. Yes/No; sliding scales can also be helpful.

‘How did you hear about this gym?’ can be a nice question for our health accessories business. Radio, television, newspapers, word of mouth, and so on…’ Such a query would then provide you with insight into the types of media that your target audience prefers.

Pick a business name, create some business cards, load up on inventory, and get ready to trade!

Measure it and keep track of it!

My business teacher once told me that if you can’t measure it, you can’t manage it.

You must be able to plan forward, which necessitates knowing — or being able to accurately anticipate — your entire sales. The formula is simple: total sales = number of customers x average sale x frequency of visits per customer per year. You’ll be able to manage your business if you remember it, revise it frequently, and measure it!

Keep an eye on your bottom line and, more critically, your cash flow — the amount of cold, hard cash you have in the bank. When establishing your budget, include in invoice durations (14 days, 30 days, etc.).

The market takes on a life of its own, and no one can anticipate every eventuality. Put some consideration into your idea; make sure there’s a market for what you’re offering; research, research, research; effectively promote your firm; keep track of your bank account; and don’t forget about cash flow!

It’s not ideal, but if you follow these few basic procedures, you’ll be much ahead of the game for many new small business endeavours. You’re off to a terrific start if you’ve heard about a great home-based business opportunity or have a product or service to sell.

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