Home business success: It's all in the planning

Planning is the key to success in any business, more so in home business where you stand to loose your own money. There are, of course, a few blessed souls who are born with the Midas touch. But these are very few. The majority have to go through the grind if they have to succeed.

The first step is to create a business plan. The plan may not have the airs or looks of a professional business plan but it will force you to put your strategy on a sheet of paper. You will be forced to study your competition, something which you may have earlier taken for granted; and modify your products or services.

Similarly, you will be forced to make a realistic assessment of finances. Very often home business owners presume that the money will come on its own. It never happens. Several home businesses perish because they have not worked out the cash flow properly. They find that their money is either tied in machinery or is yet to come back from distributors, and they have no ready cash to carry their day to day business activity.

You will have to take a decision if you can raid your savings accounts and start the business; seek help from friends or relatives or obtain funding from a professional source like a bank or venture capitalist. Never start a business till your finances are organized properly. This is very critical if you happen to be a family man. You must make sure that you have a small sum kept aside to take care of your home expenses for at least six months.

You also need to decide if your home business should be a sole proprietorship, a partnership, or a limited liability company. Each has its own advantages, and disadvantages. Some give you greater tax breaks; others offer a better bail out plan in case your business fails. A lawyer or a chartered accountant can guide you in what is more suitable for you.

A lawyer can also tell you whether you can run a home business from your premises. There is no point in organizing everything and then realizing that your city