The Three Golden Rules to Make Your Home Business Profitable by Vadim Kirienko
Starting, running, and turning a profit out of a home business does not have to be the tall task that most people make it out to be. While it certainly isn't easy, it doesn't have to be overly difficult either. With a little bit of forethought and planning, even the hardest, most complex of things can become relatively simple.
There are three golden rules in running a home business. If followed, these rules will help you create a dynamic home business, one that allows you make a decent living. If ignored, these rules will ensure that your home business does not rise above average operating results.
First, plan all the way to the end.
You must have a concrete vision for the business. Where will it be five, ten, twenty years from now? What sort of scale will it have? What will it be doing differently, and what things will remain the same? Try to envision all the obstacles that may come up and prepare plans to meet them. To be sure, you will be unable to foresee all the crises that will occur. But mentally, you must be prepared for them as they come. Circumstances should not catch you completely off- guard; you should have a measure of preparation against ever-changing situations.
Second, work hard – and make your people work hard as well.
With your home business, everything will start with you. You must work to become the greatest, most capable individual that you can become. Spare no expense in your education, within reason, as long as such education is helping you prepare for the future. Then, be sure that you work as hard as you can, learning all the ins and outs of the trade of which you are in. A good work ethic is important to success, and you should not neglect it. A corollary to this is that you should hire people who are just as hard-working as you are. Be sure to set targets for both yourself and others, and measure what gets done. Give reward liberally to those who achieve.
Third, utilize the power of personal networks.
There is an old adage that says "It is not what you know, but whom you know." While we may rebel against what this truism may imply, the fact remains that worldly success depends on a high degree to the number and quality of people who are kindly disposed towards you. Your personal network, as well as the networks of the people who work for you, should be utilized to their full potential, in terms of advertising and sales efforts. Treat those in your personal network well, provide the necessary services, and they in turn may promote your business to those in their networks.
Some people engage in a certain home business out of whim. It is uncommon for people to start a home business simply because they feel that this business is right for them. Unfortunately, in business, gut feel may not be enough to keep you going. More often than not, your gut feel does not really turn into reality. To really stay in business, you need to study your profit angle closely. You need to ask yourself "is this business going to be profitable?" and "how will this business become profitable?" "What will it take to make this business profitable?" If you can honestly answer these questions, then, you are closer to your dreams of making your home business a success.
Projecting future profit
To be able to make a sound projection of profits, you will need to formulate a sound business plan. In your business plan, you must make a realistic projection. You must be able to identify the expenses that you will mostly incur in the course of your business and then determine how much goods and services you will need to sell to be able to recover your cost and earn some profits. You can do your comparison by making a projected income statement.
Now, if you have no idea how to make a projected income statement or a projected financial statement for that matter, don't start fretting about it. Making a project income or financial statement is not exactly rocket science. It is just a projection of how much money you need to earn in order to be able to pay for your business expenses and at the same time earn enough money as profit.
If you are not familiar with accounting methods and process, make a research on how these things are done. Yes of course you can formulate your own methods of computing things but then your methods of computing might not really be the right way to do things. Besides, it is always easier to follow an established method of computing for profit making up something of your own.
If you do not have any spare time to learn how to make a project financial statement, you better buy a simplified computer accounting program that will allow you to create projected financial statements. The good thing about these types of simplified computer accounting programs is that you only need to input some values into the questionnaire and the program will run on its own.
If you want to change your projections, you simply change the values in the questionnaire and the program will automatically adjust the figures in your projected financial statement. Most programs will allow you to change the figures as many times as you would like. This means that by spending a few dollars on a computer program, you get the work done in just a fraction of the time it would have required you to perform it had you done things manually.