How to make money from home and be your own boss by running a home business

Making money at home as your own boss

It’s estimated that about two thirds of homeworkers are people running their own businesses. Starting your own business at home is an attractive option if you are a parent wanting to fit work commitments around family, or if you are an employee who is under threat of redundancy or tired of corporate life. Setting up at home keeps your costs down while you test the market and find out if there is a demand for your product or service, and if you are suited to being your own boss.

Being self-employed and running a small business often turn out to be very different experiences than you imagined them to be. They demand qualities you may not have needed when you were working for someone else, such as the confidence and ability to go out and sell, the self-reliance to make your own decisions, and the resilience to keep going when times get difficult.

The business you could start

There are a number of ways of becoming self-employed and they don’t all involve having a brilliant and ground-breaking new business idea.

Using your existing expertise

If you already have a skill or some expertise you are using as an employee, you can use the same skill on a self-employed basis. Many times I have heard people say that they are sick of making money for their employer and so they have decided to go it alone. This is great in principle, but you’ll need to look carefully at the financial implications of your decision before making the leap, or you could find yourself worse off and possibly working harder than ever.

Buying a franchise

When you buy a franchise, you buy the permission to operate a business that has already proved successful elsewhere, so franchising is often considered a safer way to go into business than starting from scratch. Many high street names operate as franchises, including Clarks shoe shops, Kall-Kwik printers and Toni and Guy hairdressers. The cost of the franchise may include items such as operating manuals, stock, processes, systems and stationery. All this does, however, come at a price and you will lose your investment if the business fails. So it pays to do extensive research into your chosen franchise before committing yourself, and to remember at all times that the less scrupulous are more interested in getting their hands on your fee than in helping you succeed.

Buying an existing business

Taking over a business that has been up and running for a while might seem like a tempting prospect, but you need to do thorough research and negotiate the purchase price carefully to avoid being sold a white elephant. Decide before you start looking what kind of business you want and how much you can afford to pay. Businesses for sale are listed in the national press, on the internet and in print publications like Daltons Weekly. You might find a business that is not being advertised by speaking to your professional advisers, who will know what’s happening in the business world locally.

The key question is to find out why the business is being sold and it may not be easy to get a direct answer to this, unless the owner is ready to retire. The owner could come up with any number of reasons when the truth is that the business is not profitable.

So you need to carry out a process known as ‘due diligence’ where you examine the whole business. An accountant can help you to analyse the figures, but you should also look carefully at factors such as processes, key members of staff, competitors and trends in the market. A business is only worth the amount someone is willing to pay for it, so use the results of your due diligence to negotiate the price.