Like many people, you’ve probably said one or more of the following: “I want freedom from a nine-to-five routine,” “I hate my present job,” “I’m sick of working for someone else,” or “I want to earn more money.” These are the reasons people become self-employed. But don’t be misled into thinking that starting a business is the same as creating a dream job. For many, running a business from home has become the operation of choice. Many startups that can’t afford commercial space are launched from bedrooms and basements. Lisa Price started Carol’s Daughter, a skin and hair care line, in the early 1990s from her home. Today, the multimillion-dollar Brooklyn, N.Y. -based business is seeking to take its products mainstream. Price opened her first boutique in 1999. Currently, in the works are plans to open other Carol’s Daughter stores in Harlem, N.Y. Los Angeles, Washington and Philadelphia with the help of celebrity clients and partners, including Will Smith, Jada Pinkett Smith, Jay-Z and Tommy Mottola, according to Black Enterprise magazine.
Obvious advantages of running a home-based business are flexible hours and tax deductible expenses, such as rent, supplies, travel and telephone costs. A downside many entrepreneurs fail to consider is the incredible amount of management skill and discipline it requires. Other key areas of concern: you’ll have to pay out-of-pocket for state, federal and social security taxes plus health and life insurance coverage.
Still, ready to make that transition from employee to self-employed? Carolyn M. Brown, a business finance writer editor and author of The Millionaires’ Club and Nobody’s Business but Your Own offers these tips:
Get Your Finances in Order
You don’t want to be so stressed paying bills that you can’t focus on your business. Pay off as many debts as you can. At the same time, start setting aside money in a separate money market account earmarked for your business. You’ll also find it easier to get a business line of credit if you already have equity to back it up.
Take Baby Steps
Don’t incur major expenses on new office equipment. This will only eat into your profits. Consider borrowing or buying used items. Also, rather than overspend on marketing, rely on networking, Internet viral marketing and referrals for new business.
Get Your Paperwork in Order
Check with your city or town hall to find out if you need a business license or permit. Most states have zoning ordinances and laws regarding home businesses, which vary depending on the type of business a resident owns and how it affects the community. For example, if it’s a doctor’s office or beauty salon, you must prove the extra traffic can be safely accommodated without intruding on your neighbors.
Start a Sideline Business
Consider starting a business on the side while holding down your full-time gig. Ask yourself what you have gained from your career that you could provide as a service or which of your hobbies could become a second income generator. Common sideline businesses include real estate, proofreading, event planning and photography (e.g., shooting weddings and family portraits).
Tap Into Outside Business Resources
Look to such organizations as the National Association of the Self-Employed (www.nase.org), which offer benefits to members, including health and legal services. Also, check out the Service Corps of Retired Executives, your region’s Small Business Administration office, local business groups, purchasing councils, professional groups, and trade organizations. Join your local African-American chamber of commerce, which will enable you to network with potential clients and other professionals in your line of work.
Once you begin to fly solo, don’t isolate yourself. Stay in touch with former co-workers and professional contacts. Moreover, consider forming an advisory board of professional mentors, former colleagues, trusted friends and family members to help guide your business strategy.