Reality check for working from home

Despite being enthusiastic one should also be realistic. In many things in life you can learn by mistakes. These may have been errors by your self or acts by others.

As part of my business plan I looked at why businesses fail, and in particular why do so many small businesses last less than a year or two.

I have tried to show how my current situation racks up against some of the causes of failure and how I hope to be profitable. Most of these are from articles and the web and they are in no particular order.

1. People start a business for the wrong reason. They think it will be easier than employment, have more free time and earn more money.

2. Poor management. Just because somebody is a greater carpenter does not guarantee they can effectively market themselves, plan effectively, manage others and maintain the books. They may not have good people skills needed for dealing with customers. Stressful issues include issues with health insurance, liability insurance, worker's comp insurance.

3. Insufficient capital. Many businesses need loans and / or huge amounts of cash just to start up. The ongoing costs can be difficult until (hopefully) money begins to come in. Ongoing fees include rent, mortgage and maintenance.

4. Poor location. Macdonalds spend extra to get the right site. They could save a fortune on a different block of land but exposure equals profit.

5. Lack of a plan. Most small business owners do not have a written plan. Having a plan helps deal with situations when they arise. Planning also helps sets the price for items.

6. Over-expansion. During a good run there may be a temptation to employ a few people or move to a bigger site. Problems occur when the run is over. The bigger premises might cost more than the old place and the employees may be left twiddling their thumbs.

7. No website. Hard to imagine these days but it is mentioned as one of the causes. Other issues include using technology effectively.

So how have I planned for these situations.

1. I've started my involvement in this business for these things. I know nothing is guaranteed. Sometimes it may take a while and I need to work hard.

2. No employees. Working on the marketing and customer interaction side of things

3. Minimal startup costs. A few ads, website payments, internet bills.

4. Work from home. All sales via internet and telephone. Actually with skype I can operate from anywhere in the world.

5. Planning done. evaluate every month every month.

6. Will not be expanding. This is a singular operation, my wife is involved but no employees.

7. Got a website.

So far many of the problems do not apply. That does not mean profit will automatically follow. Eliminate the negative and accentuate the positive will improve the chances.