Establish Realistic Goals



It's nearly impossible to get somewhere if you don't know where you are going. You need to establish realistic goals, then work toward your goals. It's important to set goals that are both realistic and achievable. Do not set goals simply for the sake of setting goals.

You should set short term, medium term and long term goals for your home business. For each of these time frames you should establish realistic deadlines. Once established, you can organize various tasks and activities to move toward the successful completion of your goals. For instance, your short term goal may be to start your home business within the next 4 months. To achieve this goal, you will need to list the steps required to actually start your business. Your list might include the following steps:

1) Researching business opportunities,

2) Selecting the business that you want to start,

3) Learning how to run that business,

4) Locating acceptable office space,

5) Calculating required business capital,

6) Getting business permits,

7) Preparing your business plan.

Some people use a schedule to organize the tasks and track their progress. Although there are many ways to organize the tasks a schedule with the following columns could prove useful:

1) Column 1, list the tasks,

2) Column 2, time frame for each task,

3) Column 3, resources necessary to complete the task,

4) Column 4, comments.

The comments column will allow you to track your progress toward completion of each individual task required to accomplish the goal.

Determine The Amount Of Required Capital

After establishing your goals, and preparing your schedule of activities, you need to calculate the amount of business capital needed. Obviously the amount of capital required will vary greatly for different types of businesses. For example, a manufacturing business would generally require more capital than a service business. Starting a home based business requires significantly less capital than non home based businesses. If you are planning to sell goods at a retail location you will need more capital to finance the inventory and pay occupancy costs of your retail space.

To determine the required capital you should list all possible costs that will be incurred while setting up the business. Since it will be nearly impossible to think of every possible cost, you should be sure to include additional funds to cover any surprises. One of the most stressful, and potentially devastating scenarios is to run an under capitalized business when times are tough. Do yourself a favor and make sure that you have the capital available before it is needed.

Determine The Source Of Capital

Now that you have established your goals and determined how much money you need to start your business, you can determine the source of your start up capital. Many home based businesses are initially financed with the personal savings of the owner. Another common source of funds may be home equity loans or other loans secured by the owner's personal assets. Without a track record the business may not be able to secure financing directly without the personal guarantee, and collateral of the owner. When identifying sources of funds you must consider the cost of capital. I was personally approached with a business opportunity several months ago. The other party in the venture suggested that all necessary start up capital could be obtained with the personal credit cards of the business owners. Although this certainly is a source of capital available to most would be entrepreneurs, the high interest rate on these cards makes this a very expensive proposition.

Conclusion

Goal setting, planning, and funding are key steps in getting your business started. Diving into a venture without spending time on each of these elements is a recipe for disaster. Do your homework, and you're one step closer to achieving your entrepreneurial dreams.