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Four Home-Based Business Myths

Separate fact from fiction before you decide to jump in head first.
November 30, 2010
URL: http://www.entrepreneur.com/article/217997

The home-based business industry is buzzing with new startups, products and services. If you are considering launching a home-based company, it's a good idea to have all the facts. There are a lot of misconceptions about what it takes to run a successful business from home.

Separate fact from fiction, and find out whether these oft-repeated notions are just myths.

Anyone can start a home-based business.
While anyone can launch a home-based business at virtually any time, not everyone will succeed. It's not as easy as you might think. So before you jump in head first, make sure you're in touch with reality. First of all, building a business from the ground up is a slow and sometimes tedious process. You will not become a millionaire overnight.

There is a lot of information to take in and a lot of junk to filter out. The truth is that running a home-based business is, in most cases, a trial by fire. Lots of people throw in the towel before they ever see any real money.

It doesn't cost anything to start a home-based business.
If you are offering a service, this might be true. Emily Suess, a freelance writer in Indianapolis, launched her business virtually overnight without any startup fees. "I already had a laptop and a high-speed internet connection," says Suess. "The only thing I needed was to find my first client."

On the other hand, if you are selling a product, you will have to front the money for materials and supplies. In some instances, services -- take catering, for example -- require special equipment you'll have to purchase in advance.

In any event, you will need to invest in your business in order for it to grow. As Suess points out, "It can take a long time to become established if no one knows about you. After only a few jobs, I was putting money back into my business to build a website, create business cards and market myself."

The trick is promoting and marketing your business wisely. To make it, you will need the presence of mind to determine who the real experts are and who is just trying to make a quick sale. Not every kind of business should spend money on Facebook advertising, for example. And not every self-professed marketing guru can turn leads into sales. Do your homework before you start throwing money at vendors.

If I build an online business, I can make money while I'm sleeping.
Actually, this can be true. But -- and it's a big but -- getting to this point usually requires years of hard work. You have to establish your business, build your reputation (and web traffic), and offer a product or service that sells itself. The best way to approach your home business is to accept the fact that you will get out of it exactly what you put into it.

I can quit my day job in just a few weeks.
This isn't likely at all. Do not rely on your newly established business to pay the bills the moment you start it. If you have a day job, keep it. Lots of people build a home-based business while still working full time or part time at another job. This allows you to grow slowly and build stability. Plus, if you make a mistake or two along the way, you can recover without giving up your home or filing for bankruptcy.

If you're serious about building a home-based business, none of these things should deter you from your dream. However, you need a plan and the ability to see through all the hype. Starting your own business can be tough, but it can also be very worthwhile.