Starting a new business is hard; it takes time, dedication and a strong work ethic. Almost 70 percent of U.S. entrepreneurs start their business from home and nearly 60 percent continue to do so after the business is a going concern, according to the 2012 Global Entrepreneurship Monitor Report. Working from home offers many benefits and opportunities, but 50 percent of small businesses fail within the first year, according to the Bureau of Labor Statistics. Your home-based business may be particularly vulnerable to failure if you aren’t prepared for the following five unique challenges of this work environment:
Related: 6 Lessons I Wish I’d Known Before My Business Failed
Lack of motivation
Getting a business started is exciting, so motivation is rarely a problem at the beginning of the process. However, the day-to-day grind can sap your motivation simply because no one else is there to keep you accountable. If you decide to sleep in, take a day off, play video games or take the kids to the park, you are the boss and you’ve given yourself permission. Yet while this kind of freedom may seem great, if you don’t put in the time, no one else will, and your business will fail.
Overcome this challenge by establishing and sticking to a schedule, recommend the experts at Creative Revolt. Include the goals you want to attain and the measures for achievement you need. Prioritize your responsibilities and remember that your income literally depends on your time-management skills.
Tendency to treat your business as a hobby
Dabbling in a business is worse than not starting one at all. Hobbies cost money. Businesses make money. This quote appears everywhere because too many entrepreneurs start out with an idea, something they enjoy doing, and decide to monetize it for profit without making a full commitment to their company. This side-gig will always remain just that, and the income generated will not come close to meeting its costs.
If you are going to start a home-based business, you need to be serious about it. The experts at BusinessTown recommend that you name your company, write a business plan, set work hours and establish measurable goals. If it helps, find a mentor or friend who is willing to keep you honest about the effort you are putting into your business and keep you focused on success.
Absence of a true workspace
There are two choices entrepreneurs make with regard to their workspace that set them up for failure. The first is to use their living space as an office space, such as a spare corner of a bedroom or the living room. Yet these spaces are rife with distractions, including televisions, game stations and comfy beds, and should be avoided.
The second choice is to plan to work at the local coffee shop, library or other public place. Not only do distractions abound in these settings but they also require additional effort to get there, which gives you excuses not to go or to return early. None of these options support productivity nor professionalism.
Related: 10 Strategies for Entrepreneurs Dealing With Failure
Avoid these issues by creating a dedicated workspace, recommend the experts at Contenta. Your work area should be separate from your living area, even if it’s only a curtain or other partition that defines your workstation. Make sure to have the right equipment, including a desk, computer, printer, etc., so you can perform your tasks efficiently and make the best use of your time. For entrepreneurs on a budget, look for great deals at places such as OfficeFurniture2go.com, Dealslands and OfficeSuperSavers.
The desire to do it all yourself
Starting and maintaining a new business is tiring and stressful. If you try to do everything yourself, either to retain control or save money, you will be exhausted and miss out on accessing others’ expertise or support. Your time will be spent on mundane but necessary tasks, or on putting out fires, rather than realizing your vision.
Rather than going it alone, identify those tasks that can be outsourced; then outsource them. This might take the form of a virtual assistant, bookkeeper, website manager or other option. If money is tight, consider a barter system to keep costs down for both of you.
Not separating finances
Mixing personal and business finances is a recipe for disaster. Having one bank account for your household and business expenses and income will make it nearly impossible to track the growth of your company and estimate future needs. This lack of separation also creates a logistical nightmare at tax time, when you’ll need to spend hours, if not days, establishing an accurate account of your business finances.
You should always separate business and personal finances, explain the experts at LegalZoom. This process provides legal protections, makes things easier at tax time and establishes credibility for your company. In addition, most business accounts include a business credit, which helps you track expenses and also establishes a credit history in your company’s name. This account will help you gather the information needed to make smart plans for future growth.
Related: 10 Reasons Why 7 Out of 10 Businesses Fail Within 10 Years
Working from home is challenging and can lead to business failure unless you take specific steps that support success. Fully commit to your new venture and separate your space and finances from your personal life to grow your home-based business.
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