Running a Successful Home-based Business

Small Business - Big Impact

Home-based businesses are the fastest growing part of the business community - over 60% of all Australian businesses are based at home.

One household in 8 has a business in it.

The myth is that home-based businesses are mickey mouse businesses - ‘pretenders’, ‘business intenders’ or ‘tyre kickers’.

Not true: over 50% of home-based businesses are over 5 years old; and 70% of operators work 35hrs per week or more.

Home-based businesses employ on average 2 full time and 2 part-time people.

How to Succeed

1. Pick the right type of business

  • Many home-based businesses are in construction and trades, business, personal and professional services
  • A successful home-based business will have no need for high exposure and high overheads - there will usually be little or no direct selling, and instead of being volume-based, a successful home-based business will usually have a smaller number of higher-value customers.
  • Successful home-based businesses will capitalise on the low overheads and look for opportunities for high growth

2. Think big, think business systems

  • Many home-based business operators start out by ‘falling into business’ by accident
  • To succeed, aim to grow the business beyond yourself and build in the systems to do that from the beginning
  • Don’t overwork - 24% of home-based business operators work over 50 hrs per week. This is not a ‘lifestyle choice!’
  • Hire and develop staff - aim to reproduce yourself so that you can retire!

3. Balance home and work

  • Most people in home-based business love the independence, flexibility and potential lifestyle benefits
  • But most home-based business operators find it hard getting out of work mode, rather than hard getting into work mode
  • Working 50hrs or more working per week is not a lifestyle


4. Set clear limits - and stick to them!

  • Overcome the negative stereotypes of being based at home
  • Use technology - such as multiple phone numbers, combined phone and fax, email forwarding and a big web presence
  • But be honest about being a home-based business, and be proud!


5. Do fantastic marketing

  • Network like you really mean it
  • Know your customers inside out
  • Pre-empt their needs, and then exceed them
  • Don’t compete on price - make a healthy margin on excellent service

6. Overcome loneliness and isolation

  • Two of the most important underlying barriers to growth of home-based business
  • Mix with other business operators as much as you can afford, network, watch and learn
  • Don’t lose perspective. Spend half a day each week looking at your business - remember to work on it as well as in it

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Models for Accelerating Growth

This model forms the basis of to the Springboard Business Growth Program that we have used very successfully with Home-based Businesses throughout Australia.

Research undertaken by SES and CREEDA formed the platform for the development of a model that has wide application. The development process was one of combining research and action learning and has provided a suite of new material relevant to home-based businesses.

The model assesses the needs, interests and growth potential of home-based businesses and addresses three key areas: home-based business numbers, their profiles and their needs. This includes tools and methodologies for identifying operators, largely through tele-surveys as opposed to mail-outs and letterbox drops which have a poor response rate. The model also builds profiles of home-based businesses in the local area and develops ongoing support frameworks.

The key aim of our approach is to accelerate home-based business growth. Our methodology targets high growth potential businesses and meets their most immediate needs. An important filtering process is adopted that enables a small pool of high growth businesses to be identified and offered support. If necessary the approach can be concentrated on specific industry sectors.

The filtering process involves targeted telesurveys of home-based businesses gathering region-specific information on impediments to growth followed by a series of public seminars to attract home-based business operators in the local area. These are in turn followed by focus groups that enable further assessments of business potential and needs to be made.

The filtering process identifies a pool of about 60 businesses in a local area and synergy groups are formed to provide a support network. This is supplemented by other specialist support services that may include business advice and mentoring. Depending on the nature and extent of the local business infrastructure, local associations or other business support networks can also be formed. These add to the sustainability of the model and can provide an array of complementary support arrangements ranging from technology-based referral services to self-funded managing agency arrangements.

Importantly, the model reflects the needs and availability of existing support services in the local area and builds local ownership.The longer-term outcomes also include the fostering and development of clear regional policy frameworks that support the growth of the home-based business sector.

Graphical Model

The following flow chart provides an outline of the model using an example of a location with 50,000 households.

CHART

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