Five things to ask yourself before starting a home-based business

June 13, 7:29 AMSacramento Home-based Business ExaminerEmma Santa

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With the current recession it's easy to be tempted by the lure of starting your own home based business. Many people who work 9-5 jobs are facing  pay cuts, increased workload with few incentives and the ever looming fear of layoffs. Supplementing your existing job with a home based business in the evenings could be a way for you to make a little extra money and make that monthly car payment. However, before making the jump you should assess your reasons and ability to start up a home-based business.

Do I have the necessary core skills?

If you're considering a home-based business you need to have basic business skills in addition to the core skills of your craft. Just because you are an animal lover doesn't necessarily mean you have the skills to be a mobile pet groomer. If you've been an administrative assistant you may not have the technical know-how to successfully do the same from home. One of the best ways to check your skills is to take a skill assessment test such as the one from CareerGPS.com or meet with a career counselor like the ones at the  Sacramento Employment and Training Center. Once you've assessed your skills you can decide on the type of business you are interested in and find educational opportunities if needed.

Will I be moonlighting after my 9-5 job?

If a financial crunch has you concerned, you may be tempted in starting a home-based business in order to generate additional income. Moonlighting has always been a popular way of easing into a new career or earning some extra cash. But before you jump in, make sure your home-based business doesn't conflict with your day job. For example, if you write grants as part of your job during the day what would happen if you were asked to write a grant for a competitor? Or, if you work at a gym and become a professional trainer, could you be accused of stealing clients? Be sure you know where the line is drawn before you lose your day job.

Do I have a financial cushion?

Starting a home-based business involves some expenses. Even one based solely on the Internet incurs costs such as advertising, website hosting and internet access. As my mother used to say “Hope for the best, but prepare for the worst.”  Set up rough budget of what you need to make and what expenses you might have. What amount of cash are you willing to invest in yourself? Make sure you calculate the equipment you will need, a marketing budget and living expenses while you attempt to rejoin the rat race in case the business doesn't work out.

Will my family members be willing to let me work from home?

A home-based business can have a great impact on family members. Not only are you constantly bombarded by the temptation to get things done around the house, you may also seem accessible while  working. When I started my first home-based business as a web designer, my mother would often call. Even though I told her I was working she would still keep talking as if she couldn't fathom the thought of work at home. Now that I have two preschoolers and a stay at home husband in the house I find I have to set very specific boundaries, and if necessary, pack up shop and head down the street to the local coffee shop to get in some writing time.

How motivated am I to succeed at a home-based business?

The most important question you will ask yourself before you begin any business venture is how motivated am I? If you're not very motivated you're doomed to fail. Why? Because there will be obstacles along the way to test your commitment. You may have difficulty finding sales leads, have a client that refuses to pay, or perhaps you can't refrain from the lure of television during the day. Running a home-based business requires belief in yourself and the service or product you are providing. If you make time now to assess your finances, means, skills, and support levels, then you'll show how motivated you are and will be increasing your chances for success as a home-based entrepreneur.