Written by Courtney Rosenfeld
If you achieve success, entrepreneurship can be just as rewarding as it is risky. At the beginning of your business endeavor, though, there will certainly be more risk than reward. Anticipating these challenges and learning from mistakes can equip you to succeed despite setbacks — especially when you decide to launch a business from your home. A home-based business is a great way to pursue your passion without leaving home.
Wrong Business Structure
As a new entrepreneur, choosing the correct business structure is a pivotal step in establishing your venture. It impacts many aspects of your business, including liability, taxes, and management structure. Forming a limited liability company (LLC) is often an attractive option due to its flexibility and protective features. An LLC can provide owners with personal liability protection, which means personal assets won't be at risk if the business incurs debts or liabilities.
Opting to start an LLC with a formation company can simplify the process, as they can guide you through each step, ensuring all legal requirements are met. If you're wondering how to start an LLC in Indiana, for example, these companies can provide state-specific guidance, making the process straightforward and efficient. Always remember to seek professional advice to ensure you're making the best decision for your individual business needs.
Insufficient Space
If your current residence lacks the space to support your home-based business, it might be time to consider searching for a new rental property. A larger space can provide a dedicated area for your business operations, helping to separate your work and personal life. When conducting your search, consider factors such as the layout, location, and cost of potential properties. An ideal rental would offer a distinct area for your business, be in a location that suits both your professional and personal needs and fits within your budget. Online property listings can be a great starting point, offering a wide variety of options and allowing you to filter your search based on your specific requirements.
Lack of Experience
The most common challenge facing new entrepreneurs is the lack of experience they bring to a business. Running a business successfully is a process of trial and error, and the more you do it, the better you’ll be at it.
Although inexperience may have its downfalls, it also allows you to explore new ideas with curiosity and confidence. Plus, there are some areas where inexperience doesn’t have to be an issue — like filing your business registration paperwork. Instead of struggling with the state-mandated requirements, work with a formation company who knows the ins and outs of the process and will guide you through it all.
Not Enough Resources
When starting a business, there is an extensive list of tasks you will need to complete in order to ensure that your company can operate legally and successfully. Registration with the government is the first step, followed by selecting the right business structure and obtaining any necessary licenses and permits. Additionally, in order to safeguard your business against risks and prepare it for success, you'll need to acquire commercial insurance and register for an employer identification number (EIN).
Depending upon your particular industry or sector, further requirements may include creating a website, opening bank accounts, setting up a virtual office space, and more. It's essential that all this paperwork is squared away before you open your doors to customers.
No Support From the Community
According to Lending Tree, 20% of businesses will fail within the first year. Unfortunately, this is because many small business owners do not take advantage of the resources that their community offers for new entrepreneurs.
If you are launching your business and you want guidance from a more experienced entrepreneur, for example, you can look for local networking events. Starting a business is rarely an easy endeavor, but when you tap into support from your community, you’ll have a strong foundation for success.
Unclear Business Branding
When you're operating a home-based business, it can be difficult to establish clear boundaries between the professional and personal aspects of your life. As such, it is all too common for home-based entrepreneurs to struggle with unclear business branding. However, having an established identity is a must if you want to make an impact and reach success.
From developing a recognizable logo to crafting a memorable slogan — these are important steps that will help people differentiate your business from its competitors and create trust in your brand. Additionally, creating a visually appealing website is key for online presence and making sure that customers can find you easily. Consider using online resources to learn about how content marketing can help draw traffic to your website through techniques like search engine optimization. Without a distinct identity and presence, achieving the success you desire may be difficult or even impossible.
Limited Service Offerings
As a home-based business owner, you are limited to the space that immediately surrounds you. When it comes to the services that you offer to clients, this can pose a challenge. A home-based pet-sitting business will be limited in the number of clients that it can accept, for example. It’s important for home-based business owners to get creative when developing their service offerings. If necessary, consider expanding your operations to other parts of your home in order to accommodate clients’ needs.
No Plan for the Future
Perhaps the biggest mistake that a home-based business owner can make is failing to plan for the future. It’s easy to approach your business with a one-day-at-a-time attitude — especially for new entrepreneurs — but you must be prepared for the possibility of expansion. You should also plan ways to invest in your marketing strategy and continuously attract new customers.
Overcome Common Business Challenges
Your home could be the site of the next small business success story. Along the way, though, you’ll inevitably face challenges that must be overcome. Face these obstacles head-on by having the necessary space, the right business structure, and effective marketing. And when you are too green to know the right path, ask for help whether it’s from a fellow entrepreneur. Being a small business owner requires that you think on your feet a lot, but if you start with a strong foundation, you will be in a better position moving forward.
