Look Before You Leap... Is A Home-Based Business REALLY For You? Teacher: Elena Fawkner Working from home sounds wonderful, doesn't it? No commute; no boss breathing down your neck; no fixed schedule; reward for effort; control; work/family flexibility; not having to worry about being laid off; leaving the office politics way behind; not having to get dressed up; being with your children. Is this what comes to mind when you think about what it would be like to work from home? If so, take a good hard look before you make the jump from paid to self-employment. Although these are all indisputably strong benefits of running your own home-based business, they need to be weighed against some pretty harsh realities if you are to make an informed decision whether a home-based business is truly right for you. These realities can be grouped into three main areas: personal, financial and situational. PERSONAL REALITIES -> Commitment - you must be totally committed to making a success of your business. It is important to distinguish between commitment and mere interest. If what you want to do as a business is only an interest, your enthusiasm and motivation may wane over time. You must be absolutely committed to the success of your business if you are to achieve the success you desire. -> Risk-Taker - one of the benefits of owning your own business is that you don't have to answer to a boss. The other side of the coin is that there is no-one to fall back on if things go wrong. If you make a mistake or suffer a loss, you wear it. For this reason, you must be comfortable taking calculated risks. If security and stability are very important to you, perhaps paid employment is a better option. -> Self Motivation - again, there is no boss to wave a carrot under your nose to get you moving. You must be able to motivate yourself to do what needs to be done and that includes the stuff you don't particularly enjoy doing. -> Self Discipline - being your own boss means exercising personal discipline to ensure that the work gets done. There will be no end of distractions to tempt you away from the task at hand when you're working from home. You will need a healthy dose of self discipline to ensure you stay on track. -> Patience - starting a home-business is one thing; turning a profit is quite another. You will not make a profit overnight. Be prepared to be patient and frugal during the first few months of your new venture. -> Reasons - closely related to the need for self-motivation, your reasons for wanting to work from home will keep you in the saddle. If your reasons are to get rich quick or work fewer hours, think again. A home-based business will definitely not deliver. -> Flexibility and Adaptability - you may have come from a corporate environment where you enjoyed a certain status. You may have had a secretary or assistant to take care of the more routine aspects of your job description. In your home-based business you will need to be prepared to wear many hats, at least in the beginning. This means being flexible and adaptable, being prepared to learn new skills and willing to take on new tasks. -> Willingness to Sacrifice - especially in the early stages of your business, be prepared to make sacrifices in terms of time and money to get your business off the ground. You will need to be prepared to put in long hours and, more likely than not, get by on less money than you were bringing home from your paid job. -> Work Ethic - the backbone of all of the disciplines you will need to practice in your home business is your work ethic. If you have a strong work ethic then the need for personal discipline and sacrifice will come as no surprise. -> Stress Management - the burden of your business's success or failure will rest squarely on your shoulders. That's a lot of responsibility. Consider your capacity for stress management. If it's not high, learn ways to increase it. FINANCIAL REALITIES -> Cash Reserves - if business is slow to start, do you have sufficient cash reserves to see you through? If not, perhaps you should consider starting your business part-time until it is bringing in enough of a profit to sustain you. -> Retirement Planning - say goodbye to the employer- sponsored pension plan and hello to the world of IRAs (Individual Retirement Accounts). You need to think differently about your retirement plans and should seek the advice of a qualified financial planner in the early days of your new business. -> Health Insurance - say goodbye too to the perks of paid employment such as free medical, dental, life and disability insurance. You will need to take out your own cover for these risks. -> Vacation - no-one's going to pay you while you take that two week vacation any more. And, while we're at it, who's going to run your business while you're away? SITUATIONAL REALITIES -> Hard Work, Long Hours - if you think that working for yourself means you won't have to work as hard or as long, think again. Most likely it will mean more of both. -> Interruptions - if you have children at home, be prepared for constant interruptions. Being with your children, of course, is one of the main advantages of working from home but you will need to set limits if your business is to get sufficient attention. The same goes for your spouse! -> Distractions - beware of the temptation to take care of household tasks during the time you have allocated to your business. It's very tempting to run a load of washing or vacuum the carpets instead of facing up to that business task you don't feel like doing right now. Self-discipline is crucial if you are to avoid procrastination undermining your productivity. -> Isolation and Loneliness - if you come from a busy corporate background, at some point after the novelty of working from home begins to wear off, you may begin to feel isolated and even lonely. Be prepared with strategies to keep the isolation blues at bay. See "Overcoming Isolation in Your Home Business" at this web site for some suggestions. As you can see, although there are many wonderful reasons to work from home, there are also many strong reasons why a home-based business may not be the right choice for you. Take a good hard look at the above realities and your own personal qualities and motivations. Do you have what it takes to make a success of your business? Are you prepared to do what has to be done? Whatever that is? If so, a home-based business may very well be just what the doctor ordered. But, if you have any doubts, look very hard before you make the leap from paid employment to your own home- based business. You could very well be jumping from the frying pan into the fire. About the teacher: Elena Fawkner is editor of A Home-Based Business Online, a free weekly newsletter for work-from-home entrepreneurs and those who would like to be! Subscribe at http://www.fawkner.com/subscribe.html