To Start a Business From Home: Do This - Not That pot

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To Start a Business From Home:

Do This - Not That!

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Presents

To Start a Business From Home: Do This - Not That!

Unfortunately, even in a time where we have unlimited access to information and resources, many entrepreneurs still start a businesses in a vacuum

Little thought is given to their competition, location, skillset, or a sound

marketing strategy

In this short report we will cover some important areas that any entrepreneur considering a business venture should review

The time you spend with this report now can save you thousands of dollars later Since 1988 the staff members of MoonLightWealth.Com have helped business owners start, grow, or fix their enterprises

We hope that you put the information in this report to good use

What Type of Business Should You Start?

This question speaks to your nature as much as it does the marketplace Are you someone that likes to manage people are do you prefer a more solitary business model?

Do This

Consider taking one of the many online personality tests that can give you some insight into your strongest skillset Interview your friends and family members Ask them what they believe are your outstanding character traits You might be surprised to discover that these people know you better than you think

Not That

Don’t choose a business model because you have a friend that is doing it And certainly don’t choose something that is ‘on trend’ but you would never be happy doing the work Remember, you will spend many months, and possibly years, doing this work It should be something that is compatible with who you are inside and out

What Is The Competition?

If you are going to work this business from home who else is doing something similar close to you?

Do This

Go to the local business searches available online and pick up the yellow pages You can even call the Better Business Bureau to get a listing of similar businesses

in your area Other resources that you can use are:

SCORE – www.score.org

U.S Small Business Administration

Local Chamber of Commerce

Through these resources you can determine if there is a need for your product Are the existing businesses owners making a profitable living doing it?

One strategy is to call someone in a different state (maybe even the opposite coast) and ask them about their business Let them know that you are interested

in starting a similar business in your state and that you will never be in

competition with them Most owners like to talk about their business Many would gladly give cautionary words of advice to a newcomer as to what mistakes

to avoid Offer to pay them for 30 minutes of their time to have this discussion You may find that successful business owners are helpful and don’t mind sharing advice for free

Not That

Don’t get excited about the idea of the business and not put any time into

researching the industry and competition This can be the kiss of death for a new home business owner

Do The Math!

Before buying your first pack of business cards do the math Too many business owners are quick to envision success without starting with the basics

Do This

Determine how much it will cost to deliver the service or create the product

When you are pricing services you have more room than pricing a product

Products have hard costs that you can’t get around But what you decide to charge for services have more flexibility

Cost-plus pricing This is the traditional method for pricing What is the cost to

provide a service or create a product? To determine cost, you will need to

consider:

direct costs – if you are selling cakes for example what does it cost to purchase

the ingredients? Direct costs are those for activities or services that benefit

specific projects, e.g., salaries for project staff and materials required for a

particular project Because these activities are easily traced to projects, their costs are usually charged to projects on an item-by-item basis

indirect costs – will you have an assistant? How much will you pay them? How

much gas/electricity will you use with the oven? What is your monthly mortgage, taxes, insurance? Will you need additional insurance? Sometimes these are

referred to as ‘overhead costs’ The goal is to break these costs down and apply them to the product/service being offered

fixed costs - are business expenses that are not dependent on the level of goods

or services produced by the business They tend to be time-related, such as

salaries or rents being paid per month, and are often referred to as overhead costs This is in contrast to variable costs, which are volume-related (and are paid per quantity produced)

Competitors' pricing You need to be aware of what competitors are charging

for similar services in the marketplace Thanks to the internet this information is readily available for entrepreneurs

Not That

Avoid trying to compete on price alone It simply doesn’t work Any business that

is larger than you can drive prices down long enough to run you out of the

marketplace Establish a niche that would be difficult for larger companies to provide An example might be a carwash service that goes to the client’s home The logistics behind such a business model would be a nightmare for a large company But nimble entrepreneurs can pull off such a service easily and make healthy margins

What Is Your Value Proposition?

A value proposition is a promise of value to be delivered and a belief from the customer of value that will be experienced A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or

services

Developing a value proposition is based on a review and analysis of the benefits, costs and value that an organization can deliver to its customers, prospective customers, and other constituent groups within and outside the organization It is also a positioning of value

This is where a lot of the subjectivity comes in when setting a price for a service When you have a product, you may decide to use keystone pricing, which

generally takes the wholesale cost and doubles it to come up with a price to

charge and account for your profit With a service, you can't necessarily do that

A good example of bonuses that add value can be seen in any infomercial The

“but we’re not done yet” bonuses always compliment the main product They create excitement and help push the viewer into a buying decision

Do This

First determine the direct and indirect costs of your product or service Now what other ‘psychological benefits’ could you offer to increase the perceived value? Let’s look at the cake service example again You might add:

an oversized personalized greeting or thank you card with each order.

The cake delivery person might have a song that they sing (or a poem they read)

to each recipient

The delivery person might also where a special theme costume that would make the delivery itself an event

Not That

Don’t choose bonuses that are simply stacked on your offering that are not

compatible For example you wouldn’t want someone in a costume delivering flowers for a funeral arrangement

Do You Have the Proper Equipment to Start?

Which equipment is really needed for your business to get off the ground? In the cake business scenario you would need:

oven(s)

mixer(s)

refrigeration

shelves

delivery vehicle

etc.

Do This

Research a franchise model for the type of business that you are starting Many times you can order a franchise prospectus The franchise prospectus sent to a prospective franchisee generally contains a brochure of information about the general operations of the franchise, a copy of the franchisor's Uniform Franchise Offering Circular (UFOC), a franchise agreement, and an individual franchise application These hold a wealth of information for anyone starting a similar business As we mentioned earlier you can contact a business owner in another state and get their advice about equipment and costs

Not That

You don’t want to buy more equipment than you initially need to get things going Once you are generating profit purchase additional, non-critical, items Don’t think that leasing equipment is a safer approach Leasing business equipment has two main disadvantages: overall cost and lack of ownership With regard to cost, leasing an item is almost always more expensive than purchasing it For example,

a three-year lease on a computer worth $4,000, at a standard rate of $40/month per $1,000, will cost you a total of $5,760 If you had bought it outright, you would have paid only $4,000 In addition to the higher cost, you will have built

up no equity in the computer

Process Map Your Business Before Starting

One of the most worthwhile endeavors you can undertake is to do a process map

of your business before opening your doors This is something that you will

continue to update on a regular basis and will become an indispensable exercise Business process mapping refers to activities involved in defining exactly what a business entity does, who is responsible, to what standard a process should be completed and how the success of a business process can be determined Once this is done, there can be no uncertainty as to the requirements of every internal business process A business process illustration is produced

The main purpose behind business process mapping is to assist organizations in becoming more efficient A clear and detailed business process map allows you to look at the business at any point in time and determine if there are redundancies that can be eliminated

Do This

Take a process like baking and delivering a cake Then map out every detail in the process:

getting the materials/ingredients (who is responsible and how is it done?)

pre-baking, baking, and post-baking activities

delivery

customer satisfaction/feedback

referrals

Not That

Don’t assume that because YOU can do a task that process mapping isn’t

necessary As your business grows you will need to add more people By giving them process maps of procedures you will accelerate the completion of tasks and reduce the training time exponentially

Some Start-up Steps for New Business Owners

If you want to help increase your chances of success consider the following:

Inquiry about local and state requirements for licensing and zoning regulations

In our cake baking scenario it is important to note that some states don’t allow commercial baking in residences

Be sure to check with your local zoning office to find out how the zoning

regulations in your area may affect your business plans Determine if your

business requires any licenses and file the necessary forms

Rent a post office box and use that address on your promotional mail and

stationery, doing this will make it less obvious that you are working from home A professional image is very important to your clientele

Consider using a voicemail service in the beginning to lighten your load until you can afford a live receptionists answering service

Get help in organizing your work space area You will be surprised how much space can be gained by consulting with professionals in this area

You may also want to schedule appointments with clients at their office or renting

a conference room to maintain a professional image Many companies provide satellite office space that can be rented by the hour (At the time of this writing Execu-Centers offer such a service).’

Join a strong “Lead Group” or another association to help promote your business

If you can’t find time to go yourself consider hiring a college student to go and take notes on your behalf

Always ask your new (satisfied) clients if they will refer your services to peers

Keep organized records of entertainment and travel expenses The IRS likes to audit home-based businesses especially when they are writing off a variety of expenses, including the percentage of the mortgage or rent for your office space

There are several good software programs that will help you keep track of your expenses

Find a good accountant or CPA now! They will prove a real asset as your business grows They can also put you in touch with many other resources that can help your business to prosper.’

Critical Learn to put a large percentage of your earnings into a savings account for tough times when business is slow (There will be times when business is slow – no matter how busy you are now)

Remember, you are no longer punching a clock If you are to get fed you must make it happen

Start your new business on the side (in the Moonlight hours) while you are still working full-time If you don’t have that luxury then maximize every minute of your work day

Marketing Your Business Online

Odds are you found this report online Hopefully this means that you already know the importance of the internet But many businesses are neglecting the internet Many owners feel that it takes too much time and is too expensive They are absolutely right – if can – if done incorrectly

Obviously there are thousands of channels that can be used for marketing your product or service Below are a few with some advice about how to best utilize them

Fiverr.Com (two “R”s)

You can find workers on Fiverr.com to provide all of the services at the other sites that are listed below Remember to always use the services of workers who have the highest rating Also be careful to find workers that deliver items on time But since you will probably have more time than money (at least in the

beginning) you can carve out time to deal with the resources below

Facebook

You can create a business page and reference your website (or blog) But be careful because you can waste an enormous amount of time on Facebook with very little to show for your effort if not careful

LinkedIn

LinkedIn has become the ‘business owner’s rolodex It will let you build a

professional profile, link up with other professionals, join groups and start a group You can participate in Q&A’s related to your profession to build credibility and visibility

Animotto

A fun and easy to use online video maker that anyone can use You don’t need a camera and they offer a free service Create videos that highlight your company’s products and services on YouTube