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How to Start a Home-Based Business That Will Succeed

Part 1: Six Steps to Starting a Home-Based Business

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A home based business.

This could be you.

Image (c) Natalie Avakian / Getty Images

The best home-based business is the one you start with your own two hands - not the one in the ad or the one your friend is promoting.

So how do you start a successful home-based business? The secret of success is not to stop halfway through the business selection process as so many people do. Follow these six steps to start a home-based business that will succeed rather than just being a drain of your time and money.

1. Assess your talents.

Think of your talents as the things you're really good at. They're like personality traits. For instance, you may be a very creative person, or a person who's really good at attending to details or a person with a gift for communicating. Your talents are the base for any successful business venture, including a home business.

2. Examine your skills.

These are the things that you can do. The difference between talents and skills is that talents are passive and skills are active. Or, to put it another way, you're born with talents but you develop skills over time as you learn. For instance, a creative person may have excellent skills for drawing or writing or design. A person who has a talent for attending to detail may have strong accounting or organizational skills.

3. Put your talents and skills together and generate business ideas.

The procedure I'm outlining here will work for starting any kind of business, but as we're focusing on home-based businesses, the question is, "With these talents and skills, what kind of home-based business could I start?"

Suppose you're one of those people who has accounting and organizational skills and the talents to back them. Some of the home business ideas you come up with could include:

  • Tax preparation
  • Bookkeeping
  • Business manager
  • Professional organizer

And that's just four ideas from our limited premise here. When you're doing this exercise, you, of course, have more than one or two skills, so you'll find that your list of possible home business ideas is much longer.

Don't censor yourself as you list home business ideas. List all your ideas at this stage; crossing off choices comes later.

Need help getting started? 7 Sources of Business Ideas will show you how to get started thinking as an entrepreneur

You might also want to browse these lists of business ideas:

4. Give your business ideas the home-based business test.

The fact is that not all businesses are going to work well as home-based businesses, and some won't work at all. You are not going to be able to start a manufacturing business in a residential neighbourhood, for example, and any business that involves a lot of clients coming and going is sure to upset the neighbours.

Go back over your list and cross off any business ideas that won't work as home-based businesses.

If you are intent on starting a home-based business where you actually get to work at home, also cross off any business that could be operated as a home-based business but wouldn't allow you to work at home. For example, in the short list of sample business ideas above, I would cross off "business manager", as this would involve off-site work.

Many people who want to start home-based businesses stop here. They've come up with an idea for a home-based business that they like and feel they'll be good at, so they plunge into it at this point.

Don't make this mistake! If you do, you run an extremely high risk of investing months of your time, energy and money in a losing venture and seeing the home-based business you had such hopes for fail. As I said in the introduction, the secret to starting a home-based business that will succeed is to work through the entire business selection process. The next two steps are critical to your home-based business's success. Click to continue on to the next page.

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