Did you know that in a recent Census poll, more than 10 percent of Nevadans indicated they are self-employed? Self-employment, and the advent of home-based business, is growing nationwide, and as a business-friendly, entrepreneurial-minded state, Nevada is leading the way. Over the next few months I'll be sharing some insight into what it takes to launch, run and grow a successful home-based business. This installment will serve as a self-assessment. Do you have what it takes?
Probably one of the most challenging things for an aspiring small business owner to do is to conduct an honest self-assessment. This is a crucial part of your pre-start-up agenda. It's not enough that you have a great idea. Start by asking yourself the following:
* Are you a self-starter? You really need to think hard about this one. Can you truly set an agenda for yourself every day to complete the necessary tasks at hand without anyone else holding you accountable? If you think being a home-based business owner means working sporadically and never getting out of your pajamas, think again; most successful home-based business owners log many more hours than they ever did at a traditional job.
Are you happy working alone? Working in a quiet home office may seem like a dream come true at first, but if you're a people- person and thrive on outside stimuli, you may feel isolated working alone. You can temper the isolation by joining trade and networking groups, but it's important to consider whether you'll really miss the break room chats and cubicle mates.
How strong is your financial picture? Many home-based businesses today are being founded by people who have been down-sized, laid off, or forced from retirement due to dwindling portfolios. While a home-based business helps you avoid traditional costs associated with renting office space, you will still incur start-up and operating costs, and it may take some time before you start seeing a steady stream of income. If your finances get into trouble, you face a double-whammy: you could risk losing both your home and your business. A carefully thought-out business plan and budget is an essential pre-startup tool.
Do you have the space available to conduct a professional enterprise? One of the toughest things home-based business owners face working from home is in keeping their business and personal lives separate. This means having dedicated office space, specified work hours, and having a plan for handling distractions, such as children, pets and everyday household responsibilities. Also, if you'll be meeting clients or vendors, you'll have to ensure this is permissible in your neighborhood.
Do you envision having employees work for you, or clients visit you at your home office? If this is something that's a strategic part of your overall business plan, you need to make sure you consider zoning, insurance and neighborhood association rules. Far too many home-based businesses have been thwarted when they launch their business, only to learn they must severely limit foot and vehicle traffic and on-site parking to comply with local zoning rules and regulations. You will also want to check your homeowners' insurance policy as to what kind of liability coverage you need when having clients or employees in your home.
Can you wear more than one hat at a time? Most small business owners juggle multiple responsibilities, some of which may not be your strong suits. As a sole proprietor, you'll likely start out being responsible for tasks including billing, accounting, inventory, sales and customer service, in addition to the everyday business operations. If you don't feel qualified to assume all of these roles, factor in the costs associated with out-sourcing these key responsibilities.
Do you have a Plan B? In today's economy, it's not enough to have one contingency plan; you need several. Many home-based business owners launch and grow their businesses while they're still employed by someone else. This approach serves as a safety net, providing you with essentials such as a steady income, health insurance and retirement benefits all things you'll need to provide for yourself when you become self-employed.
We'll go more in-depth with each of these topics in future columns. Next month: home-based business planning, including information on licensing and establishing a professional home office.
Dave Archer is chief executive officer of Nevada's Center for Entrepreneurship and Technology. Contact him through www.NCET.org.
