Transforming Your Hobby into a Homebased Business

For many entrepreneurs, homebased small businesses prove to be the part-time supplementary alternative or a full-time solution to the family’s income. Typically, home businesses start out as hobbies.

Home-Based-Business

 

These hobbies can be anything, from babysitting to selling clothes to providing computer services to neighbors.

Here are some of the popular hobbies that turned into profitable homebased businesses:

Online selling

Online marketplaces such as Amazon, Craigslist or eBay has enabled businesses to sell, re-sell, or have their products and services tested for a low fee. Use these online selling platforms to start selling goods, purchasing wholesale or used goods, or using drop-shipping services.

Computer services

For tech-savvy individuals, a computer-related business is suitable. Computer technicians, systems analysts, internet engineers, web designers, computer programmers, networking specialists are often in demand. Smaller companies can use you as a subcontractor or consultant. Whether you provide technical support or website design, you can make big profits for these services.

Agriculture/horticulture/culinary providers

You know you can rake in a profit if you take advantage of your green thumb or your cooking prowess. You can create specialty baked items you can sell to friends and family, and potential clients such as restaurants, farmer’s markets or businesses. You can also grow organic vegetables and fruits or rare breed of flowers and plants.

Whatever your hobby is, you can make a profit out of it. However, there are a few things you need to address to make your hobby-turned home business succeed.

Ask these questions:

  1. Who is your target customer? Who will want to buy what you make? Do you think your target customer can afford your products or services? You can start by asking your friends if they’re willing to pay your asking price. Then go directly to people like business owners or your friends’ friends and see their reaction about your price? There are also quick online surveys asking people if whether they would pay a certain amount for your product or service.
  2. Are you in the right location to be offering your product or service? Is this the right timing to offer this product or service? Promoting your business depends on what you’re willing to capitalize on. You can market your products or services through social media such as Facebook or Twitter. Or you can throw out business cards, flyers, and posters just to get your business out there. You need to make some research on how effective online marketing works. You can also use Etsy, which enables business owners to create an online store and does the marketing for them.
  3. Are you willing to take your hobby into a full-fledged home business? Can this support your lifestyle? Do you need to add additional staff to help you with your business? If your hobby is really your passion and you have turned it into something profitable, you can just use Etsy and slowly build your target audience on social media outlets. Post some high quality images or videos of your products or services and engage with your audience if they decide to ask questions and comment on your business. Share real-time experiences if you must. Of course, you may also need a team to handle all the paperwork and accounting. Take time to hire the right people who are also passionate about your hobby and will help you grow your business.

 

Developing a Marketing Plan: Key to Home Business Success

Managing a home business is not as simple as it seems no matter how business-savvy you are. However, a marketing plan can make anything possible and will allow you to follow through business processes consistently. A marketing plan must include your business goals and the required directions you will need to take to make your business succeed.

Marketing-Plan

 

There is no clear-cut way to develop a solid marketing plan; it’s different strokes for different business folks. Keep in  mind that the purpose of your marketing plan is to arrange a strategy to get your business out in the market, in front of as many people as you can as possible. There are various ways to do it; whether you want to promote your business online via social media and your website, or hand out the usual business cards, posters and network with people to establish connections. Your marketing plan includes all of these, plus ensures you stick to your schedule, helps you spend your funds wisely, and lists down possible outcomes of your marketing strategy.

So, how can a marketing plan help your small homebased business?

A marketing plan incorporates how to understand the industry you’re in, your target market, and your competitive position in that market. It states how you plan to reach that market and distinguishes your business from other competition to generate sales and revenue.

Your marketing budget must also be a factor included in your marketing plan. Basically, it will delineate the expenses of how you’re going to pull off your marketing goals in a specific timeframe.

There are various resources available that can help you attain the necessary funds to hire a marketing firm or in-house staff to help you write a marketing plan and develop a marketing budget.

Keep watch on ROI

Just because you have developed a marketing budget doesn’t mean it’s carved in stone. There are unofficial occasions where you need to produce another unplanned marketing approach, such as creating newspaper ads or holding events, to help you get to to a wider market more effectively.

Once you have a marketing plan, it’s vital that you keep a lookout on your return on investment (ROI). It’s crucial to address whether sticking to your financial plan is helping you accomplish your marketing goals and delivering you an ROI than to follow a fixed budget.

That’s why it’s imperative to incorporate a measured spending plan. Take into account the possible impact of your marketing activities that will have on your revenues during a fixed time period compared to another period when you have focused all your efforts on other business strategies. Consider the strategies that have worked out well as opposed to those that didn’t.

Granted, some of your strategies that might be included in your marketing plan can be difficult to measure, but you need to determine the outcomes of not having the other marketing tools before you use your funds for graphic design and other promotional materials.

Marketing plans must be updated annually. However, if you have developed a new product or launched the latest service, re-examine your original plan or create a separate campaign for it.

Indeed, developing a marketing plan is well worth your time and effort. It not only outlines how you will connect with your customers, it describes probable outcomes that you can set right as soon as possible.

The Pros and Cons of Starting a Homebased Business

home-basedHave you ever considered about launching a homebased business? If yes, you probably have thought of the benefits, as well as the challenges involved in starting this type of business. In fact, more and more entrepreneurs prefer having their businesses headquartered in their homes. Many homebased businesses typically start on part-time basis and as the business grows and develops, they expand into full-time. Study shows that the majority of homebased companies are actually women-owned businesses.

Homebased businesses may include product-oriented services such as clothing and crafts, child-care services, computer software consulting, food and catering, farming and horticulture, specialty mail-order, and hospitality establishments.

Homebased enterprises attract many people for a variety of reasons: flexibility and more work time, being their own boss, sense of independence, and personal satisfaction of being hands-on about the business. The demographic of homebased business owners are single or stay-at-home moms and dads, hobbyists, retired business executives, dislocated workers, and freelance contractors among others.

Running a homebased business may require a great deal of commitment than most office-based jobs. There are pros and cons that you may want to take a look into before launching your own home business:

Pros

  • More flexibility on work hours
  • More integration with the family
  • Can be launched as a part-time business, a sideline if you’re still employed
  • Low operating and start-up costs
  • Cost-savings on commuting fare, gas, child or adult care
  • Being your own boss.
  • Increased tax benefits
  • Can be a channel for your creative skills/talents
  • Employment of family members

Cons

  • Work-life balance may be disrupted
  • Working space can be cramped
  • Long work hours
  • No taxable fringe benefits
  • Lack of informal social opportunities
  • Family members and friends may disturb or demand more of you when you’re at home
  • Business activities may cause neighbor issues
  • More discipline is required

These pros and cons may impact your business or family environment in one way or another. Remember that your business, even if it involves massive amounts of your time, effort and concentration, does not have to come at your family’s (or neighbor’s) expense. Set priorities, stick to them, and manage your time effectively to maintain that ideal work-life balance.

Balancing business and family

Operating a homebased business doesn’t have to be all about you. Even if you are your own boss, you still need support to achieve balance you need for a successful business and a smooth-sailing family life.

To strike that work-life balance, you can include family members to help you develop a good business plan or share responsibilities at home. Allow time for family vacations and business hours must be limited to specific times of day and hours.

Hire a team

A business will not go well if it doesn’t have the right people working for you. Take time to hire individuals who will help you grow your business as well as fit your business needs.

You can employ a team in-house or through outsourcing. There are many professional and skilled independent contractors out there who are waiting for their next job opportunities. These contractors will help you with your invoices, accounting and bookkeeping, offline or online marketing, and so on.

For more information, home entrepreneurs can learn more about or get financial assistance in launching their home businesses through the U.S. Small Business Administration (SBA).

Small Business Innovation Research Program: An Opportunity to Grow Your Business

home-based-business

Small business owners are often on the lookout for opportunities to fund their businesses, whether it’s for equipment acquisitions or startup capital assistance. Normally, small businesses have not enough financial resources or expertise to fund or research potential business projects. They often seek help from the federal government, the great provider of many business growth opportunities such as research and development grants, small business grants for women, startup grants for small business owners, etc. And this is where the Small Business Innovative Research Program (SBIR) comes in.

SBIR is an extremely competitive program that pushes small business to boost their technological know-how and offers incentives to profit from commercialization. By incorporating eligible small businesses to take on high-tech innovation in the research and development sector, the country gains its entrepreneurial spirit back as it meets research and other development needs.

Opportunities for small businesses

SBIR focuses on the entrepreneurial market where innovators and changemakers thrive. However, the risk and cost of performing stern research and development efforts are typically  more than many of small businesses can afford.

Through reservation of a certain percentage of federal research and development funds for small business owners, SBIR safeguards them and allows for competition on the same playing field as large corporations.

SBIR provides financial assistance to fund startup and development stages and goads the commercialization of products, services or technology, which are regarded to fuel the country’s economy.

Since 1982, as part of the ratification of the Small Business Innovation Development Act, SBIR has helped many small businesses to compete for federal research and development grants. SBIR’s contributions compensate for the protection of the environment, increase of the nation’s defense, advancing of healthcare, and improvement of managing and manipulating data and information.

Qualifications

In order to qualify as a participant in the SBIR program, small businesses should meet certain criteria.

Small businesses should be/have:

  • Owned by a U.S. citizen and independently operated
  • For-profit
  • Company size that’s limited to 500 employees
  • Principal researcher

SBIR system

Every year, SBIR requires 11 federal agencies and departments to set aside a portion of their research and development funds to award small businesses. These agencies and departments that assign research and development topics and seek proposals include:

  • Department of Agriculture
  • Department of Commerce
  • Department of Defense
  • Department of Education
  • Department of Energy
  • Department of Health and Human Services
  • Department of Homeland Security
  • Department of Transportation
  • Environmental Protection Agency
  • National Aeronautics and Space Administration
  • National Science Foundation

SBIR’s Three-Phase Program

Federal agencies grant SBIR awards to qualified small businesses following proposal selection. Those that are granted awards commence a three-phase program.

  • Phase I: The startup phase. Up to $100,000 in funds are awarded for 6 months to small businesses. It supports the exploration of technical merit or feasibility of a specific technology or idea.
  • Phase II: Up to $750,000 in funds are awarded for as many as 2 years. It helps to expand Phase I development outcomes. During this phase, research and development work is performed. Only Phase I award recipients are considered for the Phase II funds.
  • Phase III: This is where Phase II innovation moves from the research and development stage into the marketplace. No SBIR funds are granted during this phase. Small businesses, to obtain funding, must find resources in other places, such as the private sector or a non-SBIR federal agency.

What is SBA’s role in the SBIR program?

The U.S. Small Business Administration (SBA) acts as the coordinating agency and information link of the SBIR program, directing all the participating agencies’ implementation of SBIR, evaluates progress and reports to Congress on its operations every year.

SBA also gathers information from the 11 agencies and issues it out in a Pre-Solicitation Announcement (PSA) quarterly.

Growing Your Homebased Business with SBA Financing

Top-Home-Based-Business-Ideas-You-Can-Start

The U.S. Small Business Administration(SBA) is committed to assisting small business owners get the finances and mentorship they need to grow their small businesses. This federal agency works with different lending partners and has developed financial programs that deal with specific needs of small businesses, offering counseling, business grants for women, funding for inventions, business development, HUB Zone, disaster loans, and microloans to name a few.

While SBA provides grants and loans to help out people who have been rejected at traditional lending companies, the agency also manage an array of training programs and educational materials geared for starting home businesses. These training programs are designed to assist business startups about the various business functions. The agency also provides assistance on law-related and advocacy matters.

To be eligible for a SBA grant or loan, a small business must pass the necessary requirements. These requirements may consist of references, computation of average income and business revenue, and the type of business.

If you are looking to start or grow your small homebased business, you can browse through SBA’s website for listings of business grants and loans you can apply for. Banks and other lending companies can also provide you with SBA loans. You can start your search online for more information. While SBA does not offer the loans by itself, the agency does guarantee loans directed at small businesses by private and public institutions, which support these loans to qualify loan applicants for approval. Just make sure you review your options to score the best grant or loan for your small business.

Before applying for financial assistance from the SBA, here are questions you need to ask yourself to determine the financing needs of your homebased business:

  • Capital: Do you require more or can you handle more effectively your current cash flow ?
  • Defining your need: Do you really need more money to expand? Or do you seek more to act as a cushion against risk?
  • Urgency: How urgent is your need for capital? Tip – Preparation for your business needs allow you to obtain the best terms instead of seeking money in desperation.
  • Risks: How huge are your risks? While all businesses have risks, you must anticipate the degree of risk which affect cost and other financing options that are available.
  • Development stage: In what state or stage of development is your business? During transitional stages, your business needs are most crucial.
  • Purpose: What will the capital be used for? Lenders will require you to specify your needs and goals to successfully attain loans or funding.
  • State of industry: In what present state your industry is in? Successful businesses that have other similar businesses in decline will obtain better funding terms. It depends on how stable or depressed your business is.
  • Condition: Is your business condition cyclical or seasonal? Loans provided to cyclical businesses (like construction) are aimed to financially back up a business in times of depression and instability. Seasonal needs for businesses are usually short term.
  • Management: How well-built is your management team? Having a good management team is an vital element that’s evaluated by lenders.
  • Business plan: How does your need for more money interlock with your business plan? Prioritize in writing a detailed business plan.  Financing sources will want to review your business plan for the growth of your business.

If you have questions, you can always get in touch with SBA. Go to the agency’s website for its contact information. You can also find a local SBA office near you that you can visit.