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.
About the author: Vadim Kirienko owns the Home Business Resource Directory where you can
find everything you need to start, run and grow a home based business.
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.
About the author: Vadim Kirienko owns the Home Business Resource Directory where you can
find everything you need to start, run and grow a home based business.
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