How to Know When to Close a Home-Based Business

Should I close this business? It's a painful question to ask yourself, whether the business is home-based or traditional. You've worked hard and have done everything you know to keep the business afloat, but all the symptoms still seem to tell you the business is failing. It's hard sometimes with such a strong emotional tie to know whether to keep moving forward or cut your losses.

I want to walk you through some ideas that may help you decide what to do. The final decision is yours, but it always helps to have an objective person look at the situation. I do suggest you do that in addition this article, not with just any objective person but with people who understand business. The following are general areas of business you need to look over on why the business isn't functioning correctly:

1) Find out if the failure a debt issue you can't fix.

The immediate picture that comes to my mind is when people go into too much debt to try to make a business work. Interest payments end up offsetting any profit to the point you never get ahead. Your overall idea may have been sound, but you have to picture debt as dropping water on a fire--eventually the flame is going to go out.

You also never want to get to the point where you're leveraging your home, 401k, or any other assets to make a failing business work. People create businesses to help them financially, not harm them. It's easy to forget that sometimes when you feel in the middle of it all.

2) Determine if you have a cash flow issue.

There are also situations that there just isn't enough of a market for the product or service to be worth your money and effort. Your income simply isn't going to catch up with your expenses no matter how much you put into it--there's this feeling like you're spending $1 to make 99 cents over and over. Unfortunately, a slow leak is still a leak. The only way to turn this around is to fix the expense side of things.

3) Is it a time issue?

If you're in a position where you're having to work a lot of hours just to keep the business afloat and sincerely don't see any hope of changes, you probably need to still shut the business down just for the sake of your health and sanity. That's usually a personal call to make, but just realize that your time may be better spent on another project.

4) Lastly, are you only going on because of emotion?

None of us like to fail, but there are some cases where shutting down may be your best option until you can recover and try again. Something I've never seen factored into business failure statistics the people who keep trying-sometimes it just takes a few failures to learn enough to be successful long-term. Most successful people have failed more than the average person in their field. They learn from the experience and move on to better things.

Additional Tip:

• Either way you decide to go, just don't let fear or denial of the situation rule your decision-making. Confront the situation head-on to either change its course or let it go. It's the best thing you can do for yourself and your family.

How to Raise Up the Image of Your Small Business

Creating a positive business image using advertising should be looked at as a long-term project for your business, partially falling into marketing and public relations. While it's not impossible to create a positive image of your business in a single ad, it's better to have people exposed to your business using multiple methods.

Think about companies that you view positively. Most likely you may have seen or heard their commercials, heard other people talk favorably of their service, know that they contribute to the community, and their name just seems to come up a lot.

Ideally, you want your own business to have a similar reputation. It then becomes a matter of breaking those positive impressions into actions you can take. Every business has a different budget and target audience, so you'll obviously need to do some planning in advance before choosing your method. Here are some general ideas to keep in mind however:

1) Repetition Leads to Reputation

Think of how many different ad campaigns Coca-Cola has had during your lifetime. Even though they've used various methods to advertise, there are elements to their ads that have remained the same over time. From a psychology standpoint, people are more likely to trust the business they've heard of the most.

While you may not have the financial means to do the same thing as Coca-Cola does on a national level, many business owners have the means to have a similar approach on a local level. It's good to study strong businesses in your area and figure out techniques they're using. You can then adapt them to your own needs.

2) Show Some Genuine Caring

People have a way of detecting when someone has given money to a charity or non-profit just for the attention because they try to squeeze every bit of publicity out of it as possible. If you take the time however to get involved in community issues that you care about and not make a big deal of it on your own part, people will recognize that as well. This can have more to do with your general integrity as a business owner than an advertising campaign, but it is still important.

3) Put Your Business in a Position Where Word-of-Mouth Works for You

Even if you have practically no advertising budget, providing an excellent level of service can always work in your favor. Your existing customer base has the ability to be your best advertising technique. Find ways you can reward your customers that don't hurt you financially, such as adding value through product combos and service packages.

4) Consider Partnering With Related Small Businesses With Advertising

Just as an example, a house cleaner, interior decorator, and closet organizer installer can all team up on certain forms of advertising, even though their businesses are all independent. If you can find other people with integrity, you have the ability to offer deals to customers that you may not have been able to do on your own. From a customer standpoint, there are some fields where it's easier to favor a network of people as opposed to a single business. I think it's the idea that these other businesses wouldn't want to be associated with you if you didn't do quality work.

More Tips:

• I want to encourage you to seek out a lot of other resources before making major decisions. This is not something you should expect to develop overnight, but it can definitely be done on a small business level.

How to Begin Managing Money in Your Home-Based Business

Just like for your personal finances, creating good money management habits for your home-based business is vital to your success. Fortunately it also does not have to be extremely complicated either. You're going to learn things on your own along the way specific to your business, but I want to offer the following tips that will get you off to a good start in general:

1) The first thing you need to do is to get a separate checking account to deposit your profits and take out your expenses.

The person doing your taxes will thank you, plus you have an easy way of tracking whether you're making a profit and how much.

2) Start saving and organizing your records.

This is also a great time to talk to your accountant to find out what receipts you need to be saving throughout the year. Keep these all in one place, such as a filing cabinet in your office.

Remember to set aside about 25% of your profits for taxes so you're not caught off guard when that time comes around, especially if you're making a great immediate income. If state sales taxes applies to what you're doing, you'll need to get information on that as well.

3) Find ways to lower and streamline your expenses when possible.

After you've settled into a pattern of business, usually within the first few months, there's also some other basic things you can do to help manage your money better.

The next thing I did personally with my businesses was look at my expenses. Without sacrificing quality, I began searching for ways I could get my shipping supplies in bulk so it was cheaper per item to mail everything. By that time I had the business volume for that to make sense whereas before buying a lot may not have been a great decision.

4) Pay off debt as soon as possible so you can grow stable.

You'll find from my other articles that I'm not a fan for going into debt to start or operate a business. If you absolutely had to borrow to start your business, one of your first goals should be to pay any loans back as soon as possible. Otherwise you're focus is always going to be divided.

People tend to make more desperate decisions in cases where they're trying to make enough money to pay back loans and grow at the same time. If you start debt-free and reinvest your profit back into your business for awhile, you'll be stable and grow faster. You also won't have the risk if the unfortunate occurs and the business fails--it doesn't make the situation any less sad, but it at least won't hurt your family's finances.

5) Develop a plan to budget your business income.

As your business grows, your approach to money management will gradually change. You may be able to create different budgets for marketing and advertising. It may even turn into a situation where you need more help beyond just your own efforts.

More Tips:

• Be sure to get outside help when you need it. Take the time to find advisers that you feel comfortable sticking with as your business develops. There are good people out there that can walk you through the process, and it's not something you should be expected to learn overnight.
• Don't be afraid to learn new things about finance. As a last parting piece of advice, the best thing you can do as an owner is always be willing to learn something new on a daily basis. This more than anything can lead you to managing both your business and personal finances very well.

How to Know if You Should Start a Home-Based Business

Transitioning from a job to a home-based business does not always have to be a sudden event. For me personally, it was more of a process. There are questions you need to ask yourself along the way, but I don't want to give you the impression that you have to know everything about business before you can even start. Most people are never taught how to run a business in high school or college, so there's a lot of learning and experience gained along the way. If you're considering starting your own business, I want to share a few ideas in this article that you need to think about.

1) First, are you willing to learn a new way of thinking?

Sometimes the traits that make you a great employee will frustrate you as a business owner. If you're a hard worker and are used to getting immediate financial feedback for your work, it may be difficult at first to visualize how results work in a business. The time and money you initially invest in a business may not show up in the form of results for months or even years later. You have the potential to make more money over your lifetime however, so for me the trade-off was well worth it.

Things that will help with this issue are reading practical business books and getting around at least a few other people who have owned traditional and home-based businesses. Any advice you can gather ahead of time will help you avoid common mistakes and know what to expect.

2) Second, are you willing to take a personal risk?

You're going to have people tell you you're making a mistake, no matter how great your idea seems to you. My husband and I both worked day jobs as we were getting our businesses off the ground so we wouldn't go into debt to do them. This meant 16-18 hour days sometimes with people making fun of us the entire time. Those same people will tell you how "lucky" you are when your work pays off. Be prepared to put up with that at least to a certain extent.

You're also going to have supportive people in your life as well. Also, not everyone who is negative at first is bad. They just may care about you and not want you to get hurt. It may take some time for all of those relationships to settle out.

3) Third, do you at least have a general plan on how you're going to make the business work?

From a financial standpoint, it's better to start a home-based business part-time and work your way into it as it becomes stable. This can take as little as a few months to sometimes several years, according to the nature of the business.

More Tips:

• If you're comfortable with beginning a business, I want to encourage you to do it. I think it's wonderful to have something to call your own that you can develop for you and your family. If you're not quite comfortable yet, keep reading and researching.
• Usually it only takes one great idea to get you started. Either way, just don't let fear rule your decision-making. It's better to do something you love and fail your way to success than it is to be silently miserable your whole working life. Whether it's a job or a business, you need to do what matters to you.
• I'm all in favor of people following their dreams, but I don't suggest they do it on credit. Your greatest assets with a home-based business are your creativity and your effort. I can tell you from experience that it's possible to create a business with less than $100 start-up capital. My first real business cost me $61 to start: $1 for a box of yard sale books and $60 in shipping supplies and postage. I made a profit of $100 because I seen a good opportunity. I just kept reinvesting my profit over and over again until I had developed a nice used book business with no debt. It was learning how to recognize the right things to buy that developed my business, not start-up money.

How to Recognize a Fake Work-at-Home Job

The idea of working at home has been growing in appeal along with the growth of the Internet, but you should be careful when it comes to work-at-home job scams. In this article, I will give you some guidelines to help you in your search.

1) Ask yourself if you are you being asked to pay for the opportunity?

There are legitimate business opportunities where you need a small amount of start-up income, but those are not jobs--you should be told from the beginning what the relationship is between you and the company.

If you're being told that it's a job and you're being asked to pay for a "list" of possible employers, it is most likely a scam. The same information you're being given is likely available for free if you take the time to research it.

2) Does the compensation seem appropriate for the job?

If you're being promised thousands of dollars a month to stuff envelopes or read e-mail, there is probably something wrong.

One growing scam involves identity theft-people are told they'll receive large sums of money for receiving packages at their home and sending them to an overseas address. What the people don't realize is that the merchandise was bought online using stolen credit card information and that their address is where it's going to be tracked.

3) Find out if the business registered with the Better Business Bureau or a similar regulatory organization. (Note: Go to their site directly--a logo on the business page alone may not be real)

One day I thought I had found a legitimate opportunity. The pay seemed reasonable and the company seemed like it would be good to work for. Then I looked them up on the Better Business Bureau's website (www.bbb.org) and found they had several lawsuits against them that were enough to make me change my mind.

Every company is going to have its issues, but it's best to check them out on non-partial sites to find out their background has a major problem.

4) Lastly, listen to your intuition.

People sometimes underestimate their ability to spot something fake. If you keep your emotions in balance-not letting yourself get overly excited or too negative-you can likely find some great opportunities if you take the time to research.

More Tips:

• Consider how your own skills and abilities can be used to do something on your own as opposed to seeking out a specific employer. There is plenty of opportunity out there if you set your mind to something.
• Realize that transitioning to working at home may be a process for you. It's better to exercise patience and do it right than try to get rich quick.

How-to Grow a Home-Baseed Business Smartly

Growing a home-based business shares many aspects of growing a traditional small business. There are however a few specific details you need to consider in deciding if the timing is right to grow and how to do it. In this article, I will address areas where you can focus your attention and draw out greater profits.

1) Look at your overhead costs.
When you expand, you need to consider if the rate your overhead is going to increase along with your profits. If your overhead is increasing at a higher rate than your profits in an expansion, it may be a bad move.

On the other hand, if you can do something to increase your profits while keeping your overhead nearly the same, you're putting yourself in a more stable position for growth.

There comes a certain point in home-based businesses where you may need to take it out of your home. This is a major decision, and you need to make sure your business can cash flow enough to cover rent and any additional expenses of a storefront and make a significantly greater profit. Never buy a location outright because you often have no idea if it's going to work long-term for your business.

2) Take a look at your time.
In business, the ideal situations are moves you can make where the business is taking up less of your time and still making the same amount of profit.

On-line businesses are a great example of this in that once you develop everything on the front end, they have a 24-hour a day element to them that operates regardless to what you're physically doing.

Sometimes you have more work available than you can handle, and it makes sense to bring on another person. Instead of a traditional employer-employee situation, you may want to consider working out deals where the new person gets a percentage of the profit they bring in instead of an hourly wage. This ensures you're not going to be drained by someone who doesn't work. Check with a local business attorney in your area for more information on how you can set this up. Also, never enter into legal partnership situations--most fail when two or more people have different directions they want a business to go.

3) Decide whether you want to grow in quality or quantity.
Either business model will work, but you need to decide what is the best direction for your product or service.

If you have a service-based business, consider the fact that gained experience has value. At a certain point, you should be able to charge higher rates for a higher quality performance that you provide. This will result in less customers and less hassle but with the same or greater amounts of profit.

In other cases, you may need to do more what you're already doing. Suppose you have a craft business and buy supplies in small quantities in the beginning. As you grow, you should feel more comfortable in buying more supplies in bulk. Your initial costs go down, and you'll make more profit even though you haven't changed the price of your goods.

4) Make sure you can cash flow any major changes to your business.
I've seen too many businesses go under because they become too leveraged with debt. It can be hard enough to run a business that you don't need the added stress of keeping above interest payments.

5) Lastly, consider areas where you can diversify or branch into.
Over time, you probably have learned a little about other businesses related to your own. If it makes sense, it may be a good idea to branch into those areas. Having more than one service can also make your business more stable.