Published by MBA Skool Team, Published on February 01, 2016
How to start a business at home is one the most teasing questions for people either sitting idle at home or want a change from their routine job & life. Starting a business at home gives an opportunity to an individual to work for their own self in the field which is not only of their interest, but which can also give them profits. This article covers the aspect on how to start your business at home, and also talks about preparation, writing the business plans and finally launching the business.
Are of weary of the corporate nine to five life? Is it getting harder day by day to find your personal space between deadlines? Then I believe it could be time for you to bring out your entrepreneurial spirit and kick start your big idea from the comforts of your home. Home based businesses are becoming a common trend today and they are not limited to the 40+, as was the practice until the last decade.
There was a time when home run businesses were frowned upon and considered to be either for those who are incapable of handling the prestigious corporate life, or for middle aged and older people who had worked long enough with big firms and now chose to take things lightly. However, today we can safely say that a home run business is actually becoming a trend with very young entrepreneurs choosing this over attractive corporate offers.
Technological advancements, internet availability, several social platforms and priority to work-life balance over earning big bucks has given rise to small ideas turning into big businesses, especially on the internet. Networking sites such as Facebook and Twitter are being used extensively to set up a business. Blogging is also a commonly used home run business platform, and is easily worked through by men and women of all age groups. In emerging markets such as India, where start-ups have become the heartbeat of the economy, a number of successful initiatives are actually based out of homes.
So how does this work? If you have a big idea, say you want to start a range of natural skin care products called Earth, then how will you go about expanding your idea into a business? In this article, we take you through the entire journey of starting this skincare products business, and with this, we hope to give you a structure to launch a disruptive innovation for the home run business industry. There are three stages that we will be looking into:
1. THE BUSINESS TYPE
Firstly, it is very important to be clear about the type of business you want base out of your home as that will determine the business sector you fall under and you can work out your business model as per the requirements of that industry.
a) Realizing your potential- Before planning out a business, you must evaluate the feasibility of the idea, as it will work from home and would probably lack the opportunities that one gets through offices. For Earth, you need to be certain that you can access all the necessary natural ingredients from home and can make the products or get it outsourced on a large scale.
b) Knowing your competitors- Earth needs to analyse skincare product makers from all over the world, while paying special attention to those making natural skincare products as a home run business. You need to study each and every competitor in great detail with respect to how they set up their business, who are their suppliers, who are their customers, what kind of products do they launch, how long have they been in this business, their market share, etc.
c) Understanding the market- No business can be initiated without doing a thorough study of the potential customers of your product. You need to understand their current needs in order to identify market gaps that your product is capable of fulfilling. Earlier, this kind of a primary research was done by entering the market and speaking to customers randomly to get their opinions. However, today this can be done very easily and accurately, covering a major portion of your market, just by doing an online survey and conducting a market potential analysis.
2. THE BUSINESS PLAN
The business plan is a framework of the structure of the business including the tasks to set up the business, the requirements of this industry and the synergies to be attained through this enterprise. The business initiation for Earth could take into consideration the following aspects:
a) Business profitability- To prepare the range of Earth products, you need to be clear of all the costs incurred. The operating expenses for this business need to be broken down and analysed so as to figure out where costs can be minimized. Some of the costs include purchasing necessary ingredients, setting up a space at home or a small workshop where the products are made and packaged, logistic costs, packaging expenses and labour costs if any. Outsourcing is a good option for doing this business speedily and with lesser efforts, and if reliable vendors are accessed, the partnership can run solid for a long period of time. All the operating and other expenses and the expected growth chart will help estimate a profit margin for the business.
b) Create a blueprint for the business- This includes the company’s vision, mission and goals; market analysis and competitors’ prices; product portfolios offered by the business and their prices; and a list of marketing plans for the home based business.
c) Legal requirements- To make sure that the business does not invite any trouble, Earth products may be want to look into the laws for running a business in this sector. This may need you to get the product patented, get product tests done on the ingredients used, get a business license, etc.
3. THE BUSINESS LAUNCH
After all the preliminary preparations, it is time to turn ideas into reality. This entails the following:
a) Investors- A business cannot run without sufficient money and sources to manage future expenditures. You can plan your initial investment yourself, through bank loans, or by approaching Venture Capital Firms and individual investors. This will give the business security for the future.
b) Advertising- Earth, like most home based businesses today, will be launched online by either creating its own website, or on a social platform such as a Facebook page, or through both. The business will be rigorously promoted on all social media available to have maximum reach. Launching and promoting a business online saves expenses of setting up and maintaining offices. Virtual stores also help reach out to a wider segment of the target customers.
c) Building customer loyalty- By emphasizing on long term planning and customized products to suit each person’s needs, you can expect exponential business growth in a short span of time. A loyal and trusted customer base is then built and expanded over a period of time.
The above cover major guidelines for setting up a home based business. However, each business has its unique requirements that can only be understood through intensive research and analysis. Hence, no matter which business you would like to set up, Step 1 of these guidelines is inevitable and the rest shall follow suit.
This article has been authored by Sanika Nagnur from SIBM Pune