Pitfalls of Starting a Business from Home

The disadvantages of starting a home-based business

As mentioned in the previous post about the advantages of a home-based business, starting their own business is not for everyone. While there are many business startups every year but in fact several thousand of them in the United States of America, not every one of them succeeds. The disadvantages of starting a business at home depends on your outlook. There are issues that are pertinent to starting a business from home which do not apply to launching your own business otherwise. When you start any business there is the element of risk involved. If you’re going to quit your full time job you are giving up a source of steady income. You have to ensure that you have enough money to launch your business, grow your business and to support it and your family through the inception stages. After that, the business still has to prove itself to be a success. That is why Research and planning before you start the business and contemplate launching it seriously is so important. In this post we will focus on the disadvantages of a starting a business when it is based at home.

The same factor that can be considered as an advantage can also prove a disadvantage for some people. Working from home means that you are constantly involved with the domestic situation. If you do not organize and manage your working schedule in a streamlined way, your home can be full of a number of distractions including children, spouses, household chores etc. Working from home requires creating an environment that is conducive to professional and efficient working. If you fail to do so, you might find that your productivity is less than working in a office environment.

You are the boss.

This is another one of those facts which being an advantage, can quickly be a disadvantage of a home-based business as well. When you are your own boss, you have to motivate yourself to work hard and give the kind of effort that your business requires to grow. You are responsible for your own efforts, decisions and the success or failure of your business. For some people focusing on work is very difficult when they are put in the driving seat. Many people are better at following orders and executing managerial jobs. Decision-making and the foresight to grow a business is not everybody’s strongest quality.

The home-based business is usually a small business.

When you start from home, you would face certain disadvantages with starting small. When you start a business at home, you are less likely to qualify for finance from banks and lending institutions. Your marketing and advertising strategy is pretty limited. You may have to rely on a very limited base of customers which in turn could create more problems with revenue and payments. In order to grow your business from being a home-based business, you have to actively take help of professionals such as accountants, lawyers and bankers in order to expand and grow into a more sizable entity. This requires money and expense.

There is no guarantee of success

Even when you start a business from home, there is no guarantee that your business is going to be a success. While you save a lot of money when starting a business from home, it is equally true that many people use their own personal finance and loans from family and friends to start running things from home. If your business is not succeed then you not only ruin your personal financial situation but end up owing money to people close to you. Many people who start a business from home do not give serious thought to the steps required in starting up a business such as market research and business plans. They presume that because they’re starting small, they do not need to go through the steps. This can be a major contribution to the reason behind the home-based business failing.

At the end of the day, the advantages and disadvantages of starting a business from home is going to depend on your personality and your outlook. The same things that could be an advantage for one person could prove to be disadvantages to another. For example, while one may see working from home as an advantage where there is no longer commute to office involved, a person gets to balance his household shows with this work, spend more time with the family, gets to control his own hours etc., another person could see these as disadvantages where not having an office environment to work in, distractions from children, household chores, distractions from friends and family all leading to lesser productivity. A person working from home could also feed lack of motivation and hence will actually end up putting in less effort in the home-based business resulting in slower growth and even the failure of the home-based business.

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