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HOME BUSINESS FAILURE PREVENTION

Home businesses (or any small business) tend to fail for three reasons...lack of planning, lack of capital, and lack of sufficient commitment to turning a business that is often based upon a hobby into success.

PLANNING:

Actually, this can go both ways. Most home businesses will not benefit from hiring a business consultant. This causes a premature, and often large, drain on beginning capital. Adequate planning, however, is a must. Most towns or areas have Chamber of Commerce people who can help guide you to (often free) small business planning classes. Colleges usually offer them at reasonable rates. I'm sure there are online classes, as well.

Here again...you don't need to overdo and become an MBA for home business operation. You do need a good foundation in learning what equipment you will need to operate efficiently. You also need a basic understanding of bookkeeping. Even if you hire an accountant (and unless you really know bookkeeping), you need to know the basics so that you cover all your bases and get every tax break available. If you decide to do your own taxes, take a course at a local college. I still take the course again every few years so I keep up with new tax laws. (And yes, I use an accountant.)

An accountant can also tell you exactly what licensing you might need, where to sign up for a sales tax number and how you will need to pay state and federal and, in some cases, city taxes. If you will have customers coming and going or do woodworking or another business where noise can be a factor, you must learn if your home is zoned correctly. Don't invest dollars in equipment before the big surprise comes, you can't have the business at homeand could even be fined for trying.

Any food preparation done in a home needs state and possibly FDA approval. It also requires major, expensive equipment so double think this one unless you want to build a sizeable business. Food and many other types of businesses require annual checks and approval from the fire department.

What is your physical space? I learned this one by hard experience. Do you have room not just to start, but also to expand? I began my first home business (writing) on the proverbial kitchen table with cardboard boxes for files. My back soon felt broken because the typewriter was much too high on that table. The first typing stand (back in THOSE days, it was typing...with two carbons) wasn't expensive, nor was that first office chair. My back approved of both.

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