Being your own boss with a home-based business comes with fantastic benefits. But, it’s important that you understand that there are downfalls that come with it, and you must understand how to handle those things ahead of time. Some mistakes are common and easily avoidable. Use these tips for a thriving home business.
It is essential to know the cost of production for any products that you sell. You determine mark-up for wholesale by multiplying your cost by two. Businesses that purchase goods from wholesalers generally charge twice the amount they have spent on goods. Make your price-point something both you and your customers can live with.
Setting regular work hours for yourself and following them will help you maintain a good work/home life balance. Choose a “closing time” for your home business. You need to allow time for your friends and family as well as your business.
Don’t let family constantly interrupt when working from the house. Because getting interrupted is something that can make productivity go down, be sure people know when you’re going to be working and when you are finished for the day. Explain that privacy is highly important and will allow you to be available when you should. Keep children supervised and make yourself available if there is an emergency.
All businesses should have an emergency fund. Doing so ensures there are no unexpected surprises that can damage your business. You should refrain from using your emergency fund unless it is absolutely necessary, and always refill it as quickly as you can.
Your financial records must be comprehensive and accurate. If the IRS or another authority ever audits your business, you want to ensure that you have sufficient information to prove your expenses and income. Good records also help you determine if your company is succeeding or failing.
Keep your customers informed, but don’t overdo the messages. Let them know about specials, discounts, new content, and so on via your e-mail alerts and newsletters. Don’t send your customers too many emails, however, or they may feel pestered.
Decide on the price of your merchandise. If you choose to manufacture your own goods, make sure you know how much it is going to cost you. The standard formula for pricing a certain item should be double the cost associated to it. That equals the price you should charge others to buy wholesale. For the retail price, multiply the cost times three.
Set a work schedule. Without a set schedule, you will be working all the time. Take time off to relax and decompress, just like you would if you worked for someone else. This way, you will still have a social life when the weekend comes.
Even though you want to be as lenient as you can when it comes to your customers paying you, so that you ensure an excellent business relationship, you could be sacrificing the potential profitability of your business by doing this. This is why the payment terms on the invoices should be clear. They should have a moderate penalty that is above the amount of the invoice, if the total amount that is owed is not paid by the end of the payment terms.
These things will keep your business honest and focused on success, not failure. You don’t want to continually make the mistakes others have made. By using these tips, you should find success.