Saturday, November 6, 2010

Home Business - Some Precautions You Ought to Take

by Jimmy Labrador

Setting up a home business is stereotyped as the easy way out of an 8-hour job so many in the employed sector want to escape from. And yet, setting up a home business can be fraught with risks and challenges. If you are thinking of going on your own, you should take an inventory of these first before taking the plunge.
For one, you need to become a generalist. In your office job, you are perhaps a specialist. Your focus is on a specific area of your company's business, e.g., purchasing, logistics, finance, human resources, sales, marketing, and so on. You can afford to have blind spots because other employees are attending to those areas. Not in your home business, however. You will be involved in everything although perhaps on a lesser scale. The question is - are you thoroughly prepared in terms of the required knowledge and skills in managing a business? Your honest answer to this question gives you a clue on how truly prepared you are to set up your home business.
You will be using your own capital, of course, to grow the business. In your office job, you don't have to worry about capital. Your capital is basically your meal and transportation expenses in going to and back from work. For as long as you manage to spend below what your salary is, you have savings (a substitute word for profit) at the end of the month.
What if you fail? Do you have a back up plan? If your back up plan consists of going back to employment once more, how long might it take you to get another job? Once you find one, you would have lost any seniority. You will have to start anew with less security of tenure. And remember, applying for a new job while you are out in the cold will not give you any advantage in negotiating for better pay and other terms and conditions of employment. In a weak bargaining position of need, you might be forced to accept the first job that is available no matter how it falls short of your expectations. It may take sometime before you can go back to the level where you were before you took the adventure of entrepreneurship.
Observe sufficient caution before venturing into a home based business especially if going into it requires that you give up your current job. Unless you are very sure where you stand with respect to the precautions I have stated above, the best strategy for you might be to start a home business that you can do initially on a part-time basis side by side with your employment. Once you are already confident of its performance, then that will be the time when you can quit your job and go full-time into it.
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