Category Archives for "Small Business"

New Year’s Eve

By Randall Orser | Small Business

fireworks-display-series_04 TNIn the Gregorian calendar, New Year’s Eve (also Old Year’s Day or Saint Sylvester’s Day in many countries), the last day of the year, is on December 31. In many countries, New Year’s Eve is celebrated at evening social gatherings, where many people dance, eat, drink alcoholic beverages, and watch or light fireworks to mark the new year. Some people attend a watchnight service. The celebrations generally go on past midnight into January 1 (New Year’s Day).

The island nations of Kiribati and Samoa are the first to welcome the New Year while Honolulu, Hawaii is among the last.

New Year traditions and celebrations in Canada vary regionally. New Year’s Eve [2](also called New Year’s Eve Day or Veille du Jour de l’An in French) is generally a social holiday. In many cities, such as Toronto and Niagara Falls in Ontario, there are large celebrations which may feature concerts, late-night partying, sporting events, and fireworks, with free public transit service during peak party times in most major cities. In some areas, such as in rural Quebec, people ice fish and drink alcoholic beverages with their friends until the early hours of January 1.

From 1956 to 1976, Guy Lombardo and his Royal Canadians serenaded Canada on the CBC, via a feed from CBS, from the ballroom of the Waldorf-Astoria Hotel on Park Avenue in New York City. After Lombardo’s death in 1977, the Royal Canadians continued on CBC and CBS until 1978.

In 1992, the sketch comedy troupe Royal Canadian Air Farce began airing its annual Year of the Farce special on CBC Television, which features sketches lampooning the major events and news stories of the year. While the original 1992 edition was a one-off special, Year of the Farce episodes continued as a regular feature of the Air Farce television series which ran from 1993 to 2008—airing its series finale on December 31, 2008. Following the finale of the television series, the original cast continued to participate in New Year’s Eve specials in the years following.

Similarly, the CBC’s French language network Ici Radio-Canada Télé airs its own yearly New Year’s Eve comedy special, Bye Bye. Unlike Year of the Farce, Bye Bye has been presented by various comedians; originally running from 1968 to 1998, it was revived in 2006 by the Québécois troupe Rock et Belles Oreilles. Its 2008 edition, hosted and co-produced by Québécois television personality Véronique Cloutier, became infamous for several sketches that many viewers perceived as offensive, including sketches making fun of English Canadians and then American president-elect Barack Obama.

On New Year’s Eve, social gatherings of all sizes are organized to mark the end of one year and the start of the next. These range from small parties with family members and a few good friends in private homes to huge street parties with live entertainment, music, dancing and even public fireworks. Many events start in the middle of the evening on December 31 and continue into the early hours of January 1.

Some people mark the stroke of midnight by opening bottles of champagne or sparkling wine and drinking a toast to the New Year and the health of everyone present. Others take a short vacation to enjoy Canada’s natural beauty at its wintry best or to take part in winter sports, such as skiing and snowboarding. In rural areas in northern Canada, particularly in Quebec, some people spend all night on a frozen lake with a group of good friends and fish through holes in the ice.

Who Is Santa Claus?

By Randall Orser | Small Business

santa claus--Tidbits 2014-12-24 TNSanta Claus, also known as Saint Nicholas, Father Christmas, Kris Kringle and simply “Santa“, is a figure with legendary, historical and folkloric origins who, in many Western cultures, is said to bring gifts to the homes of the good children on 24 December, the night before Christmas Day. However, in some European countries children receive their presents on St. Nicholas’ Day, 6 December.

The modern figure of Santa Claus is derived from the Dutch figure of Sinterklaas, whose name is a dialectal pronunciation of Saint Nicholas, the historical Greek bishop and gift-giver of Myra. During the Christianization of Germanic Europe, this figure may have absorbed elements of the god Odin, who was associated with the Germanic pagan midwinter event of Yule and led the Wild Hunt, a ghostly procession through the sky. Over time, traits of this character and the British folklore character Father Christmas merged to form the modern Santa Claus known today.

Santa Claus is generally depicted as a portly, joyous, white-bearded man—sometimes with spectacles—wearing a red coat with white collar and cuffs, white-cuffed red trousers, and black leather belt and boots and who carries a bag full of gifts for children. Images of him rarely have a beard with no moustache. This image became popular in the United States and Canada in the 19th century due to the significant influence of the 1823 poem “A Visit From St. Nicholas” and of caricaturist and political cartoonist Thomas Nast. This image has been maintained and reinforced through song, radio, television, children’s books and films.

Since the 20th century, in an idea popularized by the 1934 song “Santa Claus Is Coming to Town”, Santa Claus has been believed to make a list of children throughout the world, categorizing them according to their behavior (“naughty” or “nice”) and to deliver presents, including toys, and candy to all of the well-behaved children in the world, and sometimes coal to the naughty children, on the single night of Christmas Eve. He accomplishes this feat with the aid of the elves that make the toys in the workshop and the flying reindeer that pull his sleigh. He is commonly portrayed as living at the North Pole and saying “ho ho ho” often.

Do You Have A Document System?

By Randall Orser | Small Business

Automated data processing TNAn efficient process to establish a document system would be as a documented process or flow chart demonstrating how documented records are to be started, reviewed, and retained.

Security precautions and continuing observance of standard procedures relative to document control is essential. Document management must develop a contingency plan for safety and preservation of retained documents, electronic files and software. The contingency plan would include the prevention of unauthorized cyber attacks, limiting access to update servers, and a failsafe systematic method of backing up of essential business related information at scheduled intervals.

Document management is controlling changes to documents in a systematic fashion and ensuring that only valid versions of documents are available at points of use.

The document management system must have:

  • a current, readily available master list
  • a process for controlling changes
  • a process for distributing new revisions and retrieving obsolete revisions
  • a process for controlling cross references and external documents

Document management is a quality system function. That quality requirement is defined by international standards, such as ISO, and is also inherent in traditional non-ISO systems. The document management system is in place as empirical evidence of the maintenance of both internal and external company or customer documents.

The document management system is to ensure that all documents are current, readily identifiable, and accessible to those on a need to know basis. Controlled documents are usually accessible through a company intranet and in a .pdf format to prevent unauthorized changes.

Document management administration is responsible for the distribution, maintenance and the security of documents from unauthorized changes. The document administrator is also responsible for replacing any obsolete documents when a new revision has been received or a change has been issued. The definition of a “document” can also include customer-supplied specifications, electronic files and software.

Since documents, such as designs, work instructions, and contracts can be in characterized as “living” documents, a significant part of the management of the system is in its ability to react quickly to document revisions or obsolescence. This is usually done either through a revision to an existing document, after approval of those who would be affected by this change, or through the complete removal of the document as from “active” into an “obsolete” file. And if the document must be retained in some manner, is there an internal, customer, or regulatory requirement for document retention for a defined period of time?

4 Good Reasons to Build a Home Office for Your Home-Based Business

By Randall Orser | Small Business

Modern Luxury Loft / Apartment Architecture Interior TNFollowing the current economic crisis, many people who lost their jobs have decided to become entrepreneurs. Their encouragement to do so comes from stories and news about individuals who succeeded in their home-based businesses. Indeed, running a business from home offers a lot of benefits and can be profitable too. If you have begun doing business at home, you may want to formalize a little. Specifically, you may want to build a home office from where you can manage and operate your home business. This is one aspect that is often neglected by many small home business owners especially those who put value on how much they save by working from home. Building a home office, however, will open greater opportunities for your business.

  1. A Home Office Boosts Your Professional Image

If your business goals include growth and expansion, then you will need a home office. It will validate the professional image you want to impress on your clients. By having a home office, you have your own place to meet and entertain your clients and prospects in a businesslike manner. Do remember that image is very important when doing business and you need to hold up that image.

  1. A Home Office Offers Convenience

Another reason why you ought to create a home office for your home business is the convenience it will give you. You get to save on time and energy while exerting lesser efforts in operating your home business. You have a designated space in your home that is dedicated to your business affairs. You can have everything you need in there, from furniture and equipment to materials and supplies, to make your work easier. And when you feel that pressure is building up at work, you can always cross over to your home and enjoy its comforts even for a short while.

  1. A Home Office Keeps Your Business Life Separate from Your Personal Life

Those working from home may find themselves constantly interrupted by demands from other family members and other household responsibilities. As a result, you may not be able to complete your tasks and could miss out on deadlines. Having a home office can isolate you from domestic concerns at least for the duration of your working hours. You should then be able to have peace and focus on your tasks yet be accessible enough in case of emergency.

With a home office, you are not abandoning your responsibilities to the home. You’re merely establishing a boundary for your professional life. The other members of your household need to understand that your work is real work and that you will need to be serious about it. It will help if you let them know about your working hours so they won’t bother you during that time. It is for this reason that the ideal location of your home office is in a separate room with a door you can keep closed while working.

  1. A Home Office Gives You Opportunities for Growth and Expansion

If you have a home office, you can explore more opportunities that will help you grow and expand your business. As you may be aware, traditional business establishments have separate personnel attending to the different aspects of the business, like a human resources department has its own staff and so do the other departments such as tech support, finance, and sales, to name a few. It is different with a home business setting, especially those that are in the start-up stage when the business owner does everything. In time, when you can afford to pay salaries, you may consider hiring employees although you will need to take care of a few things like withholding taxes and insurance coverage. Then again, the increase in your expenses and in your administrative duties may well be justified considering the many benefits of having employees to help you generate bigger revenues while reducing your own workload.

Why Outsourcing is a Good Option for Home Business Owners

By Randall Orser | Small Business

Outsourcing Definition TNThere are those who frown upon the current trend of offshore outsourcing. In fact, in 2004, during a Strategic Research Institute conference, there were at least 7 workers’ organizations that rallied against offshore outsourcing in New York where the conference was being held (source: SearchCIO.com). Those who are against offshore outsourcing contend the practice deprives many American workers of job opportunities. They may like it or not, but it looks like outsourcing is here to stay because many businesses, especially home-based businesses, highly favor it. Outsourcing has proven itself to be a cost-effective strategy to get things done. There are three reasons why you would want to outsource your home business. For one, it is cheaper than hiring full time employees. Second, you do not have to go through the process of direct hiring and firing. And finally, you can take advantage of the expertise that is available overseas.

Cheaper Labour

Many home businesses are small-scale in operations. They cannot afford to pay staff working for them full-time. Yet, the home business owners usually find themselves swamped with work and realize that they do need help. Some manage to get part-time workers but salaries eat a big chunk off their profits. Now, it is a fact that wages are much lower in other countries compared to the pay range in North America. You too can get those foreign workers to work for you and still pay them based on their local rates. The BPO (business process outsourcing) industry is growing in many countries like India, Bangladesh, Pakistan, and the Philippines. They have several companies servicing American businesses.

Advantages of Outsourcing

Other than the lower labour expense, you can save money when you outsource your home business. You do not need to make additional investments on new furniture, computers and bigger office space just so you can accommodate workers. Instead, you get to use the facilities of the BPO vendor. Also, you pay them on a fee-for-service basis, which means that what you incur are variable costs instead of fixed expenses. You get to enjoy staffing flexibility with outsourcing. If your business has seasonal or cyclical ups and downs, you can easily get workers for the duration of the high demand and release them when you expect the demand to be low.

If you’ve been spending more time on your work than what you originally intended to, outsourcing some aspects of your home business will enable you to cut down your working hours. You can then have more free time to pursue other business opportunities. You can also reclaim the time that you should devote to your family and personal life. BPO vendors have developed the skills and competencies of their workers in various business processes. They are also continuously updating their knowledge and technology to keep abreast with competition. When you engage their services, you avail of their talents and expertise that in turn puts you ahead of your own competitors.

What You Can Outsource

You can outsource the business functions that you would delegate to employees if you were to hire. Review your list of regular tasks and note those that you can’t seem to find the time to work on even if they’re fairly easy. You may also want to outsource those repetitive tasks that you don’t enjoy doing. The most often outsourced jobs include customer care and sales support, which include responding to phone-in queries and complaints, telemarketing, order taking, and invoicing. Many home businesses also outsource their accounting functions, production, fulfillment of orders, website administration, and data entry, among others.

You really do not need to work harder than you have to and you should not miss out on orders because you’ve already reached the limit of what you can do on your own. Outsourcing some areas of your home business can be advantageous for you; it can increase your capacity without the hassles of actually hiring more people.

Is Now a Good Time to Be Thinking about Starting a Business?

By Randall Orser | Small Business

Businessman falling TNIs now a good time to be thinking about starting a business? The answer depends on several different factors. The most important factor that one needs to consider when answering this question is whether or not you have the venture capital to do so. When the economy is in the throes of a downturn, finding the money to start up a new business can be difficult. Therefore, if you have a source of venture capital already in place, you are one leg up and ready to start a business of your own.

What Type of Startup Business Has a Chance?

While the economy might not be that great at the moment, there are several different types of businesses that are continuing to grow and find success. The truth of the matter is that people cannot be expected to give up everything. There are items that people need to survive, items that businesses need to grow, and items that people simply want.

Therefore, certain businesses are going to thrive while others are going to struggle. Plus, certain members of society can still afford to continue living at the same level that they have been living at. Consequently, these individuals can still afford to purchase whatever they want to have.

In general, businesses that can provide goods and services for reasonable prices and fees are going to fare better than their counterparts that are charging excessive rates and prices. In general, fast food restaurants and discount stores are hanging onto a fair share of the market. Additionally, businesses that provide a necessary service or essential commodities at reasonable rates are also surviving. Plus, businesses that cater to current trends in technology, learning, and social networking are also in a good place to continue thriving.

Tips on Becoming a Successful Recession Startup Business

In order to make a go at a startup business and succeed, the stage has to be set just so. In essence, all of your ducks need to be in a row and it’s best to get them there before you begin. Follow these simple tips to get started on your new business venture with a positive step in the right direction.

Venture Capital Tip

Make sure that you have the access to a source of venture capital. If you are one of the lucky ones who can still get a loan at an affordable rate, then that should be sufficient. If you aren’t going to be able to take out a loan, then make sure that you have the cash that you will need to function as a business for at least one full year and ideally two full years. Don’t rely on potential sales or business income. If you don’t have it, you can’t count it.

Research Tip

Do the research before you select the type of business venture or the location. If the area is already inundated with similar enterprises, you’re cutting off your foot before it even takes that first step. Check out how many others are already selling the products or service that you want to sell in a particular locale. Check out their advertising scenario. Assess their level of success by watching their clientele traffic for a week or so. If need be, switch the location that you are considering or tweak your business idea to an area for which a true need exists.

Beginning Business in a Small Way

Don’t over invest your money during the beginning stages. Start out small and work your way up. There’s plenty of time to amp it up once you get started. However, if you need to shift gears and you’ve already dumped all of your cash into the project, what are you going to use to adjust your plan? Exercise a bit of frugality and shop for your supplies and needs wisely. In fact, make a budget and stick to it so that you don’t run out of business capital too quickly.

Collect Those Overdue Payments, Without Hiring A Collection Agency

By Randall Orser | Small Business

Debt concept TNCollecting past-due accounts can be a hassle for any small business owner. The process can spoil customer relations and waste valuable time. But there are ways to collect payments without the headache of hiring a collections agency or going to small claims court.

Try these four steps to help ease the woes of collections:

Credit Cards

Customers who know they can pay in installments may be more likely to do business with you. Overdue payment issues land between the customer and the credit card company—the business owner is removed from the equation. There are fees for accepting credit cards, so do your research. American Express (Amex) tends to be the most expensive; however, if you are dealing with wealthier clients you may want to accept Amex. Look at your industry association, Chamber of Commerce, Board of Trade, Canadian Federation of Independent Business, etc. as you get a discount on merchant fees through these associations.

Advance Payment

Retainers followed by additional paymentsas the job proceeds increase chances of being paid the full amount. Collect one-third up front; one-third midway through the service; and a final payment upon completion. Work out the percentage that works best for you and the client. You may want to get at least materials costs up front so you’re not out that amount. If your business is mostly labour, you may want to get a good portion to cover your labour costs. 

Transfer Collections Duties

Hire a part-time employee to handle your past due accounts. Your staffer can closely monitor accounts, which could shorten collections times. This strategy also alleviates tension between the business owner and the late-paying customers. Sending statements is also a good idea; there are business people who wait for a statement before paying anything. Plus, there’s no excuse for a missed invoice as they got a statement.

Contracts

Prepare basic contracts in advance and ask customers to sign off on a payment schedule and a specific work plan to reduce the chance of misunderstandings over the service and the payment. Always have a scope of work when working on a project basis, this way the customer can’t complain when you say ‘sorry that’s extra’. Construction is great at this, and anything not in the scope is a ‘change order’, and an extra cost that’s invoiced separately. It even pays to have a ‘scope of work’ for any business, especially a service business. Let the customer know what they’re getting for the price they’re paying.

While the above tips won’t stop all bad debts, they can alleviate the headaches of trying to collect monies owed to your business. Sadly, bad debts are just a part of doing business, so do as much as you can to nip them in the bud.

Cash Flow Management for Small Business Owners

By Randall Orser | Small Business

Dollar Coin Shows Currency Symbol And Cash TNCash flow is the bane of small business owners. Even if you are working on a large project that takes several weeks, you still have to pay the rent, utility bills, supplier invoices, loan repayments, and employee wages while you are waiting for the big payout of the project. Managing your cash flow is not always easy, especially when some clients extend your terms of payment and delay paying your invoices on time. Providing credit terms over several months can make your customers happy, but can make it tough for your business to pay the regular bills.

You can manage your small business cash flow by various methods. You can encourage your customers to pay invoices sooner, you can invoice in stages for the project, and you can factor your invoices to receive the payment from a credit agency before the customer actually pays the invoice. Some businesses will find a mixture of methods helps to balance the ledger book every month.

Encourage Customers to Pay Invoices Sooner

You can encourage your customers to pay invoices quickly in several ways. Some small businesses only work with cash or immediate payments. Customers pay cash on delivery or via credit cards, or your business does not deliver the product. While this is suitable for some businesses, such as those who use web-based ordering systems, this is less suitable for some businesses.

If you cannot ensure your customers pay for the product or service before delivery, you need to encourage your customers pay the invoice as soon as possible. The longer you extend credit to your customers, the longer you have to balance your cash flow without the income. Some small businesses offer a discount to customers who pay up front, or within a short time, such as 7 days of receiving the invoice. While this is a good way to encourage customers to pay on time, it can be costly to your business, depending on the discount you offer.

Invest in good follow up debt collecting practices. Sending out reminder invoices every week with coloured stickers encouraging fast payment of the invoice can encourage customers to pay the invoice sooner. Follow up with personal phone calls when customers have extended the payment of the invoice outside the terms of payment.

Reduce your terms of payment from 30 days to 7 days, if possible. If your customers do not pay on time according to your terms of payment, you may be able to add a surcharge to the invoice. This is a better cash flow solution than offering a discount for early payment, as the business gains more income when the customers pay late, and does not lose money for encouraging customers to pay on time.

Invoice in Stages

For larger projects over several weeks, set up a contract with the customer that allows you to invoice the client periodically over the course of the project when your business meets the key stages. Agree on what the key stages of the project will be with the customer, and decide on deadlines for each stage of the project. This will let the customer know when to expect your periodic invoice, and you will know when to expect the money from the customer for your cash flow balances.

Factor Your Invoices

Factoring is a relatively new form of credit that some credit companies are offering small business owners. Unlike bank loans with set repayments, factoring offers small business owners much more flexibility. Generally, you will be able to borrow up to 90 per cent of the invoices you have sent to your customers at any one time.

You borrow the cash via a draw down account and when the customer pays the invoice directly to the factoring company, you receive the rest of the invoice amount minus the factoring fee. The fee is usually smaller than interest payments from a bank, and the factoring company can help your business to follow up on the outstanding customer debts, which could save your business from the costs associated with debt collecting practices.

Managing your cash flow is managing the life blood of your small business. Without cash flow, you cannot purchase necessary supplies, pay your bills, or pay employee wages when you need to. Manage the cash flow of your small business by encouraging fast customer payments of invoices, invoicing in stages, or factoring your invoices.

Five to Ten a Day for Better Health (of Your Business)

By Randall Orser | Small Business

businessman shows success of business TN

We have been inundated with advice to eat well for our health’s sake. But, what about five to ten tips to better health of our business? Shouldn’t that be as important to the business owner?

Five to ten tips to follow a day can reduce the risk of failure and ensure your business enjoys a long and healthy life!

Five Tips to Overall Health:

Prioritize and get things done.

When prioritizing, keep customers forefront (and suppliers, inventory, and staff). Without customers, where would you be? Complete tasks. Follow through. Finish paperwork.

Plan ahead (but be flexible) – Get Organized.

Keep your eye on the road ahead. Ensure that you (and your staff) focus on the business plan, the marketing plan, and your original vision. Ensure that marketing campaigns are done ahead of time (ideally, a year in advance). Budgets and buying plans should be completed six months ahead, as well as any open-to-buy for product for promotional sales. Staff schedules and training should be well organized in order to coincide with seasonal upswings.

Customers and Customer Service – It’s always about the customers!

Every business owner should prioritize any task that involves customer satisfaction. If you tell a customer that the product will arrive by the end of the week, then ensure that your promise is kept. If you tell a customer that you will call them, then ensure that you do. Broken promises do not impress customers. Always under-promise and over-deliver!

Nurture all relationships including staff, suppliers, those in the business community and in the media.  

Reward your staff, motivate your staff and keep them in the loop. Join professional associations.   Expand your communication channels. Get into the habit of mailing thank you notes to customers, staff, suppliers and those who have benefited your business. Pick up the telephone and have a one on one conversation. Stay in touch.

Core competencies – What do you do best?

To thrive in the marketplace, a business must excel in at least one of the following: product offering, customer service, promotional strategies (branding), price or location.

Reminders to not only keep doing what you do best, but initiatives to keep improving. Never lose sight of what distinguishes your business from the rest. Learn to identify your strengths and build on them.

Five More Tips to Overall Health:

Look after the details – it’s always about the small details.

Is the exterior fresh and clean? Does a brightly painted door welcome your customers? Is there a bench, an attractive door wreath, or an eye-catching window display that attracts new customers? Do you have an area for weary customers? Does your children’s store have a toy area for children? Do you supply customers with coupons if you have inconvenienced them? Do you greet your customers by name? Do you capture their names on your mailing list?

Look after the expenses – Pay your bills on time.

Send out invoices and request payment in a timely fashion. Eliminate unnecessary perks; eliminate waste; eliminate frills that are not important to the customer. Look for less expensive ways to do everything. If not sure where to begin…call your accountant. Better yet, read your expense sheet and cut costs by ten percent. Pay your bills on time. If possible, pay within ten days and get a two percent reduction for early payment.

Grow (innovate)

Successful entrepreneurs are never satisfied with the status quo. They understand that to increase their share in the marketplace the business must grow: better product; newer technology; more effective website; more informed and knowledgeable staff; timelier shipping: better distribution channels; and so on.

Constantly change – re-invent yourself

A healthy business realizes that change is a constant; change will keep customers coming back. Customers will return to see new product displays, new demonstrations, and new content. Customers will brand your business – as a leader. Keep your customers delighted, inspired and motivated.

Old-fashioned principles are still true

Keep your business honest, reliable and trustworthy. Stand behind your policies – with no exceptions. Advocate privacy and honesty on your website and in print. Ensure that all practices value those principles. When a business values old-fashioned principles, customers will learn to trust that business and sales will follow. (There are some values that never grow old.)

You will know that your business is strong and healthy when you have difficulty prioritizing the above tips. Is change more important than principles? Are relationships more important than the bottom line?   A business owner that puts the customer (and customer service) to the forefront understands that the suppliers, the product, the service and the staff make up the equation.

The most successful businesses thrive because their owners understand that all aspects of business must be healthy; one area cannot stagnate or be left unattended for the sake of another area. Because a successful business is a component of all best practices – each integrated to make the whole.

A healthy business will enjoy a long life…so integrate five to ten a day to increase your chances to survive. The life of your business might depend on it.

Six Reasons Many Home Businesses Fail

By Randall Orser | Small Business

Close up of a pink piggy bank with dollars beside miniature house model on white background TNIt is a fact that as many home businesses are started, only a few succeed, many remain so-so, and many more fail with their owners actually losing their money. This is sad because almost all who ventured to do business at home have done so thinking that it is the best way to get out of the 9-to-5 rut while earning lots of money they never even dreamt of as employees. It’s when these owners face the stark reality about running their business that many find themselves falling short of their expectations. Below are 6 common reasons many home businesses become failures and what you can do to make sure your home business doesn’t suffer the same fate.

1. Lack of business plan.

Any business that launches without a plan is bound to fail. Any business owner who wants to succeed in a new undertaking must write a business plan to concretize his visions and what he wants to do with the business. The business plan maps out the directions the owner must take and the strategies that must be adopted to achieve goals.

2. Poor planning.

Many business plans are too optimistic they tend to overestimate the market and demand for the product or service. Sometimes, business owners underestimate the production costs and expenses of running their business. As a result, profits are smaller than projected. Sometimes, the operations result into a net loss and the business is rendered incapable of sustaining its own operations. Know your market thoroughly so you can make more realistic projections.

3. Insufficient working capital.

There are people who boldly start new businesses even without sufficient working capital. And when they finally run out of cash, many resort to mortgaging their homes, risking the financial security of their family. Therefore, make sure that you have enough business funds before establishing your home business. Keep your business funds separate from your personal money and don’t use one for the other. Commit your finances only up to a certain extent. Know when it’s time to quit but you don’t have to if you can manage your business well and grow it to be big and strong.

4. Lack of knowledge, experience and management skills.

Many home businesses fail because the owner does not know enough about the business. Or, he may be too inexperienced and lack the managerial skills necessary to make the right decisions in steering the business into profitability. If you wish to enter a particular industry and you do not have any prior experience in it, you should do your homework first. Read up and do the necessary research. Learn about production, marketing and financial management. Go back to school if you must so you can prepare yourself adequately for the demands of the business.

5. Lack of self-discipline and commitment.

Many home business owners think that they have the right to sleep late and work whenever they feel like. Unfortunately, such an attitude is a recipe for failure. Laziness and procrastination have caused the downfall of many home-based businesses. You should be prepared to toil hard if you want your business to succeed and this means having to work longer hours if necessary, and going out of your way to provide excellent customer service. However, make sure that you take breaks in between and get enough sleep to keep stress from consuming you. Home based businesses can turn into a monster if you don’t take full control at the onset.

6. Inability to cope with changes.

It is common among home business owners to be so absorbed in what they’re doing they fail to notice the changes happening around them. They are unaware of the latest trends and before they know it, the product or service they sell is on its way to becoming obsolete. As a home business owner, keep your nose onto the grindstone but keep your eyes and ears wide open. Maintain contact with your peers in the industry and try to widen your network. Be alert for hints of forthcoming changes so you can prepare to adapt yourself and your business to any developments.

Building your home-based business can give you a sense of fulfillment but you need to be disciplined and driven. Tap into your creativity to make the most out of the many opportunities that are present. If you can’t commit yourself to nurture your business through the highs and the lows, then you might as well continue being an employee and enjoy a more peaceful sleep at night.