Starting a Home Business on the Side

Many people dream of casting off the shackles of their nine to five jobs and starting their own small business.  Most of them are not able to simply quit their day job to live their dream, so instead they build their business at night and on weekends until it reaches the point where they can finally hand in their letter of resignation.

If you’ve been bitten by the entrepreneurial bug and you’re thinking of starting your own business, there are a few things you need to consider before taking the plunge.

Have a Plan

Statistics show that the majority of new businesses fail within the first five years.  Having a solid business plan can help you overcome those odds.  You need to consider where your revenue will come from, what kind of expenses you’ll have, and how you’ll keep your business running until it starts to turn a profit.

You’ll need to decide what kind of business structure to set up (sole proprietor, corporation, LLC) and figure out if you need any business licenses.  And you’ll need a well thought out plan of action to guide you as your business grows.  The more preparation you do ahead of time the better chance you have to succeed.

Don’t Forget About Your Day Job

It’s only natural to be enthusiastic about building your own business, and you may be tempted to work on your side business during regular business hours even if you have a full-time job.  Don’t do it.  Your employer is paying you to work for them, not to build your own business on their time.  How would you feel if someone that worked for you was spending his or her day working on their own private business while you foot the bill?   And if your work performance suffers because you’re not focused enough on your job you could find yourself depending on your business income a lot sooner than planned.

Keep a Close Eye on Your Cash Flow

Cash flow is the lifeblood of any business.  Many a business has been ruined by poor cash management and if you want to avoid becoming one of them you need watch your cash flow like a hawk.   Keep on top of your customers to make sure they are paying on time.  If they don’t pay you then you may not be able to pay your vendors.  Also, don’t end up stuck with too much inventory.  You need to keep a comfortable amount of liquid cash to cover unexpected expenses.

Prepare to Work Your Butt Off

If the reason you want to start a side business is so you can have it easy, you’re in for a rude awakening.  Yes, a small business could one day provide you with a steady, semi-passive stream of income.  But it takes a lot of work to go from startup to success story and that goes for any type of business whether you are opening a coffee shop, offering accounting services, or launching a blog.

Expect to spend many late nights and weekends slaving away as you try to make your dream a reality.  There will be times when you question whether it is really worth all the effort and you’ll be tempted to throw in the towel.    If you aren’t prepared to put in the time and elbow grease required then don’t even bother.

Starting a business with unrealistic expectations is a recipe for disaster.  But as long as you plan ahead, stay focused and organized, and are willing to work your butt off you could be the next entrepreneur success story.

Written by Mike Collins

Mike Collins is obsessed with building new streams of income and achieving financial freedom so he can live life to the fullest with his wife and 3 amazing children. Read more about his adventures at WealthyTurtle.com

9 Responses to Starting a Home Business on the Side

  1. Hi Mike,

    What a great article. Full of useful information and practical advice.

    I know many people who start a business on the side and they really don’t realise how hard it is. You have to work the day job and then come home and work the evenings and weekends, with little time off.

    It is rewarding but definitely hard work. Your article makes a lot of common sense.

    Take care,
    Denise

    • Hi Denise! Trying to build a business on the side while you continue working a full time job is certainly a challenge. As you say it requires a lot of late nights and long weekends, which is why it just isn’t for some people.

  2. still it’s the most difficult decision to quit the day job. kind of risky business. and you won’t success unless you take the risks..

    • I think regular jobs come with risk too. What if you got laid off tomorrow? With your own business as a supplemental source of income you’d be better prepared to weather any financial storms that come your way.

  3. Great post that many should read. Being self employed and having your own business is a massive difference to being employed. Be prepared for lots of hard work and long days. Thanks for sharing on Bizsugar.com

    • So many people think: I’ll work as much as I want! Set my own hours! However, when you are self-employed, it rarely goes this way. Often you have to work even harder — at least at first.

    • Hi Sian,
      Starting your own business is definitely a lot of work and you’ll probably put in more hours than you would at a day job. But if you enjoy what you’re doing and it gives you the freedom that a 9-5 job doesn’t it can definitely be worth it.

  4. I couldn’t agree more with the planning seciton. I actually would have put more emphasis on it. “If you fail to plan then you plan to fail”. Spending some time doing the research will definitely improve your chances of success!

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