In her book due out this month, Bringing Home The Business (Perigee), our "S.O.S." columnist Kim T. Gordon reveals 30 "truths" every homebased business owner must know, from marketing your business to living and working under the same roof. This exclusive excerpt discusses a particularly important part of entrepreneurship: start-up marketing capital.
Truth: Most homebased business owners use their own money to get started and often undercapitalize critical areas like marketing.
Imagine your same business, but in a different location--a leased office space. What would your rent be? What would you do to win business? Anything you're not doing now? The only real difference between your homebased business and any other small business is location. But because many people consider home a safe haven, it's easy to become comfortable and complacent. You forget to run your homebased business like any other, with established budgets for key programs, including marketing.
The SBA tells us that two of the principal reasons for small-business failure are undercapitalization and lack of effective marketing programs. That's not surprising, because the two go hand in hand. You should be willing to spend at least $5,500 to set up a bare-bones home office. That includes a computer with a modem, a backup zip drive, a monitor, a printer, a fax machine a telephone, plus basic furnishings. You'll need a desk and filing cabinet, plus a comfortable, ergonomic chair and a lamp or two. Any additional software and equipment will add to this basic cost.