Running your own home-based business is not for everyone. Still, most people have given this idea some consideration at some point in their life.
One of the biggest attractions of having a home-based business is that it provides many things that a regular job cannot. Also, if you run the business successfully alongside your regular job, you can have the best of both worlds.
For most people, the biggest challenge in running your own business is not in the actual running of it. The challenge is in choosing what kind of business to set up!
Having said that, there are still important aspects of any business that need to be dealt with effectively in order for your business to become successful.
Essential Elements of a Successful Home-Based Business
I’ve been running my business from home for over a decade now. At first, I treated it as a hobby. It was something I did to kill time when the children were in school.
I struggled when I decided to focus on the business fully and professionally. Over time, I’ve found that you need to take care of the following elements to help create the success you want for your business.
While these elements may work for all home-based businesses, they are specifically for self-employed professionals.
1. Enjoy what you do
If you don’t enjoy what you do, it’s just a matter of time before you quit. This is more so for those who have a full-time job and part-time business, or if you’ve turned a hobby into a business.
If you find yourself NOT enjoying what you do, find out what it is you don’t enjoy and:
- Fix it.
- Change it.
- Forget it.
- Or get someone else to do it for you.
A home-based business is not like a job where someone is telling you what to do and how to do it. ALL the choices are yours when you run your own business.
Choose a different strategy, make a decision, take action, and move on.
2. Keep your overhead costs low
Low overheads are a big perk of working from home. There’s no rent to pay, virtually no commute, and minimal bills.
You can also manage a home-based business successfully with no staff. And when you do need staff, you can hire highly qualified freelancers online or offline, or get full-time virtual assistants.
Here’s something to keep in mind: The lower your overhead costs, the higher your profit margins. However, don’t minimize your costs at the expense of quality and your own productivity!
3. Be efficient with your time
Proper time management and productivity are keys to increasing your efficiency. If you can increase your efficiency, your profits will also increase.
It’s easy to waste time when you work from home, and time IS money when you run a home-based business.
How much is your time worth?
A simple calculation is to divide your weekly profits by the number of hours worked to find out your hourly rate. For example:
- If your profits for the week are $250 and you work with 10 clients per week, you are worth $25 an hour.
- Or, if your average fee per client is $25: If it takes on average one hour to work with each client, you are worth $25 per hour.
- If a client keeps you talking for 30 minutes after the appointment is over, that chat has cost you about $12.50. You would be no worse off if you had charged half price and left on time.
Keep in mind that the actual work you do with clients is only one part of the business. You also have to account for the time used in marketing and general business admin.
Scope creep is also something to watch out for. This is when clients keep adding on work that is not covered in the original agreement. Scope creep is a topic on its own so I’ll cover it in a separate article.
Now that you know how much an hour of your time is worth…do you really need to do everything in your home or business?
Many of the mundane repetitive tasks that take up your time can be outsourced to others.
These include:
- Housework: Get someone to come in a few days a week or a few hours a day and to clean your home and do laundry. You can also get someone who can do the grocery shopping for you.
- Childminding: Hire a nanny if you can. In some cases, you can get someone who doubles as a nanny and housekeeper.
- Business admin: Get a qualified Virtual Assistant. You can hire someone from sites like IWorker or Upwork.
- Customer care and/or community management: This is best outsourced once it starts eating into your time.
- Online marketing: Unless you’re really great at it or this is your main job, it’s more cost-effective to outsource this as your business grows.
My rule of thumb is that if someone else can do something at less than my hourly rate, then I outsource that task. I also outsource tasks that I don’t like (e.g. housework) and those that I’m not good at.
Finally, if you’re running your business alongside your regular job, it’s important to create and maintain a routine to ensure that your business doesn’t interfere with your job and vice-versa.
Minimize distractions
Working from home means that you’ll have a lot of distractions. Access to the television and other gadgets can hinder your productivity if not well managed.
Children, spouses and significant others, family, friends, even neighbours can be a source of endless interruptions.
I remember a time when one of my neighbours got upset because I refused to take care of her children for her. Her househelp didn’t show up and so my neighbour wanted to leave the children with me so that she could go to her business.
My No was not well received because she thought I should be able to manage my work and her children since I was working from home.
Having strong boundaries around your time and availability is key to your productivity and efficiency. Don’t negotiate on that.
4. Charge the maximum amount that’s acceptable in your market
I’m always amazed by the fact that you can get people to hire you at higher fees than you think. This happens each time I want to raise my fees.
- It always starts with the fear of raising the fees and a belief that no one will pay.
- To counter this, I talk myself into believing that I can charge these fees. This is a simple morning exercise where I tell myself “My fee is …. (insert the amount) per client per month.”. I do this a few times every morning as I look in the mirror.
- Within 30 consecutive days of this exercise, I’m able to propose the new fees to potential clients. It’s always a shaky start and I stammer sometimes, but eventually, I get to charge my new fee confidently.
The best time to increase your rate/prices is when you’re doing well. Every business does it. Taxes go up. Food prices go up. Fuel prices go up…and so should your rates or fees.
Make the increase at the same time each year.
- To keep loyal ongoing customers, have a modest increase each year for existing clients. Tell them ahead of time so that they expect it.
- Always charge new clients higher rates from the start. Charge the maximum you can. If you’re providing outstanding service, nobody will mind paying for it.
- Don’t fall into the trap of allowing returning clients the same fee they paid when they last worked with you. You can give them a discount of about 10% or thereabouts as a thank you. But let them know your new fee and that the discount is only for them. This will prevent them from sending referrals to you who think they will also pay what your returning clients are paying.
A key factor that helps you charge a premium is testimonials. Make a habit of requesting testimonials from satisfied clients or customers. Use these testimonials on your website, social media, and in your marketing pieces.
Here’s an example of how we’ve used testimonials on this site.
5. Be both persistent and consistent
Whatever you do, always be consistent and persistent.
- For example, if you generally call clients ahead of time to check that they are ready, always call.
- If you take 30 minutes between appointments for lunch on the run, always take 30 minutes.
- If you tell clients that bookings run from Wed to Saturday, always book on those days. Be consistent. Don’t allow clients to encroach on your free time (Remember scope creep? This is one example).
For example, I have 2 work schedules: one for the school term and one for the school holidays. Everyone knows about this and I also keep repeating it just in case people forget.
I’ve also made it clear that I don’t coach or do active client work on Mondays and Fridays. While I do make exceptions once in a while, I always default back to my norm to maintain consistency.
When it comes to persistence, ALWAYS be persistent. If you follow up with anyone for anything – like a bank, clients, suppliers, your local tax office, or whatever – be persistent.
Persist until things get resolved to your satisfaction. Don’t let things slide because these unresolved issues have a habit of accumulating.
Bottom line
Having a home-based business may seem like fun. After all, you are your own boss, have no commute, and you keep all the profit!
All these are true. But the comfort and profitability come with a price. You need to have control over yourself and your business.
The tighter you run the business, the better service you’ll provide, the more satisfied clients you’ll attract, the more profit you’ll make, and the more fun and free time you’ll have. Plus, you’ll enjoy more satisfaction and fulfilment.
Your business doesn’t have to be huge to become meaningful. If you could make a modest $250 a week profit, working part-time from home, that would be an extra $1000 a month income.
Would that make a difference for you and your family? Of course, it would!
While it’s not always the case, oftentimes you can grow a small, home-based business to eventually allow you to quit your full-time job. If that is something that might interest you over time, it will benefit you to begin with the end in mind.
What’s most important right now is not to get everything right, but to get started. You can adjust and adapt as you go, but most important of all is just to get going. You’ll be glad that you did!
Whenever you’re ready, here’s how I can help you scale with less stress and in less time
- Monetize your expertise in Kickstart Your Business. Many self-employed professionals struggle because they didn’t set up their businesses the right way. Due to this, your business always feels as if it’s stuck at startup. Over the course of 3 months, I’ll help you turn things around so that you stop giving away your expertise for free or for less than you’re worth. You’ll also identify your unique sellable skills, match these skills to a market segment that is willing, able and ready to pay you, and set a strong foundation for your business. The program requires only 10-12 hours a week so you can take it even as you work on your business.
Book a complimentary Discovery Call to find out more about Kickstart Your Business. - Learn and connect with like-minded women in Elevate. I set up Elevate Community in 2020 when my former business coaching clients asked for a way to continue learning and connecting with each other without being in a coaching program. Elevate is now a Mastermind for women entrepreneurs who are ready to scale. We combine mastermind principles with peer-to-peer coaching for an experience that will elevate you and your business to your level.
Find out more about Elevate Mastermind. - Work with me 1-1 if you’re ready for exponential personal and business growth and you have a mission to create a powerful positive impact through your business.
Let’s talk.
