Is running a small business from home a viable way to make a professional salary?
The short answer is, yes. Running a small business from home in these digital days can be very financially and operationally viable for even the most constrained business owner.
You can make the equivalent of a professional salary by running a small business from home.
By following some simple principles you can produce a very fruitful small business without having to leave your home address.
There are, however, potential pitfalls and characteristic challenges. But they are worth assessing case by case to decide on the feasibility of your venture.
The following are key factors of success according drafted our in-house heads, alongside a neat practical case study to present a real life example of how someone else did it:
Key Factors for Success in Running a Small Business from Home
Running a small business at home clearly doesn’t suit all business types, but for those models where customers are not expected to be served on site, a more remote communication approach is entirely reasonable and credible.
But isn’t running the business from a small rented office just a more appropriate for credibility?
Some businesses have no reason for routinely hosting stakeholders (customers, investors, suppliers) onsite and so the arguments for renting a business premises out of necessity are rendered null and void.
There are some preferential benefits with renting a public premises however. For example, the fact that the home environment for some may not be conducive to running a business endeavour on a consistent daily basis.
But even from a very humble beginnings with only the bare essentials at hand…
- A small desk,
- smart phone,
- unlimited call package and a
- high-speed broadband connection!
With only these very simple tools, it is entirely feasible to launch your new home-based venture with almost zero office start-up costs.
In most cases if persevered with, sufficient earnings can be produced – even enough to replace a well paid corporate salary. 2-3 years is a reasonable enough timeframe to achieve this.
What are the key factors to keep a keen eye on when starting up a home business?
A common type of home-based business is one where the trade is an informational transfer.
This will entail you as the business owner pouring out your unique value adding combination of expertise and experience into your customer interactions either via a consulting model, or packaged neatly and digestibly in some format of academic product, i.e. training course, book, seminar etc.
Either way, whether selling your expertise in consultancy time or in a packaged product, the resulting deliverable should enable your customer to solve their problem effectively.
This end product can be defined as ‘intellectual property’.
This intellectual property is only truly intellectual property however if it genuinely belongs to you i.e. if you are the originator or producer.
Don’t plagiarise. A plagiarised piece re-branded as your original effort is deceptive and will only result in loss as customers become aware that you’ve shopped a look-a-like.
Reputation wise this is disastrous. Simply put, don’t steal.
Remote customer service model for running a small business from home
All business involves a transfer of a benefit and value given to a customer somehow.
Even home-based businesses need to honour the transfer of deliverables of some sort.
If you are delivering a product, on what format does it exist? Digital or physical?
If the former, then the common methods of email, or website download are easy to reach go-to’s. Typical digital formats include: PDF (whitepapers, e-books etc.), mp3 (training course), mp4 (tutorials).
These can be downloaded by customers and digested at convenience moments at their own pace.
The great advantage for you in selling a user initiated, digital download via an automated internet based sales process does not depend on your availability.
Nor does it need anyone else, provider side, to effect the transaction – enabling you to make income in a very hands off fashion.
If you are delivering consultancy, then of course by definition you are the deliverable!
Your time and therefore availability for a consultation, whether scheduled or impromptu must be meticulously managed to convert all possible profit making opportunities.
Minimising administrative time with well engineered workflow routines i.e. email follow-ups to web enquiries, thank you letters etc. must be taken care of in order to therefore maximise your value adding (profit making) consultancy interactions.
A well whetted blade makes short work of a task which otherwise could call for exhaustive burnout and frustration. Strategy, therefore, can defined as, ‘preparing and leading the array to achieve or overtake your purpose.’
What is your purpose in running a small business from home? Making profit? Satisfying your customers? Should be neither.
To succeed you should be serving all customers excellently and sustainably so, solving their most costly problems and adding value by way of first class commercial experience.
Serving with real excellence means by definition you embody the attitude of: giving all you have, to the customer’s good.
This is the primary goal of the business. Even when you don’t feel like you have much to give, the giving culture will grant you the edge with pleasing customers and keeping them pleased.
Highlighting choice headline statistics for your business operation will enable you to keep a grasp of current progress, evaluate past performances and cease upon new opportunities. All to the increase of your bottom-line business asset value.
These are the invaluable controls by which your ongoing trial and error will be baselined against a norm.
From this you can begin to theorise and derive some understanding of cause and effect relationship among factors in your business model.
Outsourcing can be defined as utilising capable providers specialising in lesser-value added functions within your business operations.
When these are handled by a competent specialist with enthusiasm for your vision, who doesn’t mind occasionally innovating on the theme you’ve given them, can be a real gem on your quest for serving customers excellently.
Trial and error
To know what really works well, it takes putting your theory into practice.
Once you see the result of your action using quantitative and qualitative scrutiny, your analytical acumen then will be poised to derive business insights in order to elicit a causative commercial understanding.
Develop a hypothesis, establish your controls and implement your methodology in order to ‘prove’ or ‘disprove’ the validity of your hypothesis.
Catalogue the results and align them against your expectations – if the trajectory is complimentary, plot the desired distance and try again.
Extrapolate to exit
Having tested the validity of your methods and formulating the ideal mix for growth, you now need to extrapolate for exit.
Setting achievable projected milestones for tracked growth leading towards your planned exit is the roadmap for success.
Case study: Successfully running a small business from home
Business Name: Chandoo.org
- 2009 (side business while working full time): $10,000 – half his full time salary.
2010: (full time business owner) $100,000
How did Purna Duggirala do it?
He coupled his professional expertise and experiences as a project manager and business analyst to create a suite of Microsoft Excel products and training courses, sold by web download.
Sales are powered by a self-hosted blog which hosts a high frequency of hints and tips for MS Excel users of all levels of user proficiency, from beginner to expert.
Each blog article focuses on a very specific Excel problem which is solved in an easy to follow step by step fashion by Purna himself.
The result of each article should be the enhancement of the user’s ability to utilise MS Excel in tackling their most pressing spreadsheet problem.
To date he has written over 1,500+ articles in 8 years of consistent online content marketing (2009 – 2017).
In 2010, his page views were 700,000+ in one month (November).
All run from his family home (…in fact, from his bedroom).
Let’s not lose the fact that this venture took tireless work building before the fruits could be enjoyed by him and his family – but as you are about to see, the results were worth it.
Highlights of success
- He engages the visitors online with the blog
- Builds a list of subscribers to RSS and newsletter
- Sells products
- He monetises the blog primarily by selling digital products:
- eBooks ($5)
- Excel Dashboards ($50 – $100)
- Online video classes ($247)
- He monetises the blog primarily by selling digital products:
- Aggressive content marketing: adding useful content to his blog which ultimately solves his visitor’s MS Excel problems in a step-by-step tutorial approach.
- On average 3-4 times per week is the average frequency
- On page conversion rate = 1%
- Uncluttered interface and product focused presentation with regular call to action for product purchase
- Simple Paypal (or other gateway) transactions online
- Money back guarantee
- Excellent operations, leads to high satisfaction = repeat purchase and WOM
- Online transactions and automated follow-up
- Customer service
- Presales care
- Postsales care
- Complaints and refunds
What do you have in mind for running a small business from home? Join the conversation below.
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Categorised in: Small Business Management Tips
This post was written by selmore