Part 4 of 5 On The Home Business Set-Up Guide

Part 4 of 5 On The Home Business Set-Up Guide

Dear Reader,
These articles will provide a step by step guide on how to start and run a home based business based on my experiences and other home business owners. This is part 4 in a series of 5 articles. They are written in a basic format and where possible main points are summarised in an attempt to be understood by all. I have tried to minimise the technical jargon as much as possible.

So lets jump right in and see what we need to know about starting and running a home based business.

Regards,
Alvin
http://www.parttimeincome.org

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Business Networking

Networking and building relationships is essential for the growth of your business. The way to network is to associate yourself with other peers, who will hopefully become suppliers and clients. A good place to start is to find business associations, clubs and business networks which interest you and contact them. Most organisations are always looking for new members and you ill be welcomed. Approach networking in a manner that aims at building a long term relationship rather that the benefit of a short term sale.

Ways to network:
§Exchange business cards at every opportunity
§Telephone one person a week who is in a related business field for a coffee
§Join an organisation

E-Commerce

E-business has become commonplace in the marketplace. You will find your business may use some e-commerce technologies:

§Business to business – suppliers
§Business to consumer – online retailing
§Business to government – tendering
§Consumer to government – tax returns

The World Wide Web

Inevitably your business will reach the stage where using the internet will be essential.
You will have to buy a modem, which enables the computer to connect to the internet. The next step is to find a ISP (internet service provider) who will provide you access to the internet.

Website

A website may be suitable for your business, but before you spend the money, consider exactly how it will benefit your business. There are many companies who will setup a website costing a few hundred dollars to a few thousand. There may be additional fees and charges (such as registering a domain name), so check with your ISP.

Expanding Your Business

Commonly a business will require more capital to expand. There are few ways to do this, the most common are a bank loan and debt and equity finance.

The Bank Loan

All lender’s have certain criteria which need to be met before a loan is given:

§Character – this is your business performance, skills and abilities (assessed by the bank manager)
§Cash flow – this shows whether sufficient funds can be generated to cover loan repayments
§Collateral – security against potential loss

In many cases applications for loans fail because the borrower has not presented the relevant or sufficient information to enable the lender to understand the intentions of the borrower and the viability of the business venture.

Debt And Equity Finance

Debt finance is money borrowed by the business, from an external source. This is the most common way a small business raises additional funds. Equity finance is capital provided by the owner or investors into the business.

Planning For The Future

Some develop a business for lifestyle reasons, some use it as a means for creating income, or wealth creation in the long term. Some options for the future of your business include:

§Evolve – business evolves to complement changes in the industry
§Leave home – move to commercial premises
§Sell – work to create equity
§Close down – plan your exit, notify clients, suppliers and be professional about it.

I hope this article has set you on the path to create your own home based business and empower you to reach your financial destiny.
In the next article, I will cover some of the ins and outs of growing your small business from home.

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