7 Rules to Starting a Successful Home Business in a Recession Washington DC
College Park, MD
College Park, MD
7 Rules to Starting a Successful Home Business in a Recession
How to Build and Diversify a Stable New Home-Based Business
By Steve Strauss
If you wanted easy, you would not have chosen to start your own home-based business. If you wanted easy, you would have decided to keep working for The Man.
Indeed, if an entrepreneur is defined as a person willing to take a risk with money to make money then it follows that risk is part of this gig. It should also help to remember the words of Paul Harvey: “In times like these, it is good to know that there have always been times like these.” The good news is that starting and succeeding during a recession is quite doable. Consider:
- Disney began during the recession of 1923-24.
- Hewlett-Packard was begun during the Great Depression (in 1938).
- Microsoft began during the 1975 recession.
So how do you do you build long-term success “in times like these?” Here are 7 Rules to make your entrepreneurial journey easier:
Rule #1: Keep Your Overhead Low. With both businesses and consumers playing it close to the vest, the smart move in this economy is to keep your expenses as low as possible. Doing so not only increases cash flow but also serves to increase your profit margins.
Running your business from home helps a lot of course, but beyond that, look at other ways to keep costs down:
- Labor should cost less because, with the economy fairly stagnant, wages are depressed.
- Similarly, goods and services can be had at discounted prices if you look.
- Be a tightwad when picking insurance, phone plans, and health care plans. Finding fat here can really lower the bottom line and increase ready capital.
Rule #2: Make Cash Flow a Priority. Along the same lines, when things are tight, it is vital that you keep the cash-flow spigot turned on so that you have ready money when you need it (because you never know when you might need it)! Here are some ways to do so:
- Get paid. Don’t make the mistake that far too many home-based business people do: They allow unpaid invoices to accumulate and grow old. Have a Net 30 policy and stick to it.
- Don’t discount your fees or prices. See what your competition charges and charge something similar, maybe a tad less. Remember, people make their decisions regarding where to buy and who to hire based upon a lot more than price alone.
- Rule #3: You Must Have a Great Web Site. Notice I didn’t say “you must have a have a web site” or even “a good web site.” You must have a great web site. Every home-based business needs a professional web site, if for no other reason than it is how people check you out these days.
Today, not having a web site (and half of all small businesses still don’t!) is like not having a business card or not having a sign in front of your store. It is small business malpractice.
Getting a great site need not be difficult or expensive. For example, Microsoft (a company I do some work with) recently launched a new version of its web s...