Your home business has been going like gangbusters with a growing clientele list and increased profits. For better or worse, many entrepreneur-minded types won’t be able to stop thinking about how to expand the operation into a small business. There’s nothing wrong with that, but you should be aware that it’s a wide chasm between the one and the other. Along with increased profit opportunity comes increased chance to crash and burn. Are you ready to make the leap? Maybe you are, and maybe you aren’t. Only you can make that choice. Here are some factors to consider first.
Increased Risk/Costs
Presumably, your mortgage or rent was getting paid before you opened a home-based business, which means you still have a place to live whether or not your business activities were successful. One of the first things you’ll notice in opening a small business is how expensive it is comparably. You’ll need to cover separate rent, utilities, insurance, and a whole new level of required paperwork, especially if you decide to hire employees. Some people look at this with fear in their eyes. Others see an exciting challenge they can’t wait to attempt. Do you have a plan in place to survive and thrive increased financial demands?
Time Away from Home
There’s a saying that goes something like this: A small business owner is the only person who will gladly put in 80 hours a week in order to avoid working 40. If you’ve never owned a small business, there is much truth to this. Expect that the actual time you devote to the endeavor will greatly exceed the hours your business is open. This can be a shock if you are used to a more laid-back, home-business approach. And you can’t call in sick or roll over and sleep until noon. If the sign on the door says you’re open, you better be open. Between ordering, marketing, managing, and taking care of the thousand daily things that pop up, expect demands on your time to increase.
Failure Rate
Estimates place the small business failure rate at 60 to 80 percent after five years. This is a substantial number that has stayed consistent over the decades. While businesses close for a variety of different reasons, we can draw at least one conclusion – it’s hard work and a lot of people ultimately aren’t good at it. To succeed, you have to be the exception. This is not to say you can’t, but the odds are not in your favor.
Leadership
Some people start a home-based business because they don’t particularly enjoy being around the public or even co-workers. As a small business owner, you need to like people. They are the ones that come in the front door and buy the goods and/or services that allow you to keep the doors open another day. You should “worship” them and do whatever it takes to encourage them to come back again. Then there’s the whole aspect of managing employees. Are up to being the boss of other people?
Sales and Marketing
Another business maxim is that it takes money to make money. As a home business operator, it’s easier to bootstrap your way into being operational. It’s harder when you open an actual brick and mortar location. Where will your funding come from? Loans from friends, family, and banks are frequent options. With traditional lenders becoming more stringent, many entrepreneurs looking to make the jump from home to small business are faced with a serious funding issue. That’s where third party private lenders come into the picture. In reading a cashnetusa review, you can find lenders that can help you access funds by the very next day. It’s worth the time spent to create a marketing strategy that gets your name out there.
The bottom line is that transitioning from a home-based business into a small business is a formidable process, but might be the most rewarding mission you ever undertake. Do it thoughtfully and realistically and there’s a good chance you will be one of the success stories.
