Beyond Startup – Are You Stunting the Growth of Your Home-Based Business?

Beyond Startup – Are You Stunting the Growth of Your … … © 2002 Elena Fawkner If you’ve left the … world to strike out on your own in your own … … you’ll be a

Beyond Startup – Are You Stunting
the Growth of Your Home-Based Business? small business

© 2002 Elena Fawkner

If you’ve left the corporate world to strike out on your own in
your own home-based business, you’ll be acutely aware that

your financial success is up to you and you alone, perhaps
for the first time in your life. For obvious reasons, therefore,
your home-based business is probably run on a shoestring.

This means, of course, that you do everything. Although you
are now CEO, you are also secretary, marketing director,
receptionist and gopher. But hey, that’s the way you like it,
right? Just as well too since when you’re just starting out you
don’t have much of a choice anyway.

But sooner or later, if you keep doing everything yourself you’ll
necessarily curtail the growth of your business. It will grow to
a certain point but no further because you’re only one person
and there are, after all, only 24 hours in a day.

Now, if you’re satisfied with making a little money on the side,
that’s fine. But if your business is your only source of income,

you must move beyond start-up if you are to become financially
successful and avoid stunting the growth of your business.

This article looks at the growth stages of a typical one-person
home-based business and how to gradually grow your business
without being run over in the process.


=> One-(Wo)Man Band

As already stated, when you first start out, you do everything
yourself. You’re both chief cook and bottle-washer. And you

can continue like this for quite some time because, initially,
you are unlikely to be fully stretched. This is exactly what
you should be doing.

This is NOT the time to go out and spend money with
advertising agencies and hiring employees. For so long as
you CAN do everything yourself and everything that needs to
be done is getting done, this is the most efficient use of your
current resources.

=> Don’t Overcommit Yourself

During this stage, however, it is important to be careful not
to overcommit yourself. You are a fledgling. You must learn
to fly like a sparrow before you can soar like an eagle. So,

when you first start out, underpromise and overdeliver.

Also, don’t embark on an aggressive marketing campaign
until you have the business resources to satisfy the demand
you will create. Let your advertising grow in line with the
growth of your business, the addition of employees and
increased financial capacity.

=> Pay Yourself

Be extremely careful with your pricing during this stage also.
Make sure you include a wage for yourself in your overhead

costs and add a realistic profit margin (say 15-20%).

Remember, price equals costs plus profit margin. Costs
include direct, indirect and overhead costs. For a more
detailed treatment on pricing, read “Pricing Yourself to Get,
and Stay In, Business” at .

=> Profits Belong to Your Business

Plough your profit back into your business. This is most
important. This is where your funds for expansion during
the next growth phase of your business come from. NEVER
use your business’s profits to pay personal expenses. This
is what you pay yourself a wage for. Your business’s profit
does not belong to you. It belongs to your business. There
IS a difference!

During your shoestring days, look for lower-cost substitutes
before incurring substantial expenditure. For example, don’t
go out and buy a new fax machine, a new answering machine,
a new photocopier. Get one of those three in one jobs that
sits on your desktop and only costs a few hundred dollars.