You’ve decided to take the big step and you’re starting a home based business. It’s something you gave a lot of thought to and that you really want to see succeed. The good news is you have started on a path that can give you the financial freedom to choose how you live and how you work. The bad news is most people who start a home based business fail.This article will give you a quick rundown on how to avoid the common mistakes and how you can turn this business into the dream you want. Okay enough hype, the facts are pretty straight forward it just seems like the dream sometimes overpowers our ability to see them for what they are.The Number One Reason Home Based Businesses FailActually this depends on the type of home based business that you have. If you’re trying to sell physical products and you have to carry an inventory then the number one reason for failure is insufficient capital. In short you don’t have enough money to effectively run the business. If you are into internet marketing, the number one reason for failure is the business owner simply quits too soon.In both cases, the underlying reason for failure is that realistic market research and revenue projection were not performed. It’s absolutely amazing how many times the imaginary analysis of “if I get 100 people to see my product and only 2% buy that will give me $XX in sales”. Did you go through this? Did you make a revenue estimate based on numbers you pulled off the top of your head or did you do research?For the physical product operation, faulty marketing research will kill the cash flow and put it out of business. For the internet business, the fact that few if any sales were made will discourage the owner and he or she will quit before their efforts have had time to mature.The Number One Reason Home Based Businesses SucceedThe number one reason for success is a well thought out business plan. That means this home based operation is being treated as a business and not a hobby. It is not considered something that you can start and stop as you please but rather a business that has a purpose and a plan of action.The market niche is identified, the product to promote is selected, a unique selling proposition is created and an intelligent marketing plan is put in place. Budgets for advertising and overheads are established. Sales and expenses are tracked.Most importantly, the owner takes action on the business plan each day. Every day that passes the business makes progress. The owner has reasonable expectations and has the patience to let his efforts take effect. This business succeeds because the owner works it as a business and doesn’t allow distractions to interfere.Starting a home based business is not difficult and if you put the effort into the planning you have an excellent chance of succeeding. Know your market, know your product, market smart and give good customer service and you’ll wind up with a winner.

In today’s modern world what with the internet, there has never been so many opportunities for people to set up a home based business to make money and work from home. The internet is full of business opportunities some good and some not so good, so you need to do your research first before you begin journey into the world of the online home based business.So what niche do you choose for you home based business? Well there are literally thousands and thousands to choose from. For those of you who are not sure what a niche is, it is basically the business that interests you, lets say you are interested in blogging, well that’s a niche on it’s own or a business that you can make money from. Another niche within the blogging niche is coaching people to set up a blog, that’s a niche sometimes called a sub niche, basically a niche can be anything.When you look at the coaching niche that again has many sub niches built within. Let say you know how to set up a word-press blog, you also know how to install a opt-in box for the blog so people can collect there visitors name and email address, that’s a niche or a sub niche as some people call it. That could be the starting of your home based business.Article writing is another niche, say you are good at writing, then you could sell your services to write articles for other people. OK your good at building WordPress blogs and installing opt-in boxes, you could write articles about how this is all done even write articles about how you write articles, these are all niches or sub niches.Another good niche is video, you know how to use a video camera even edit the film you have videoed, you could offer your services to make videos for people who don’t know how to make a video, you could even upload the videos for you clients, this is a good home based business opportunity to get into.So you see there are literally thousands of niches to choose from. A good place to start with for your home based business is to sit back and think about your job that you do now whatever it may be, see if you can think of how you could sell your knowledge to people who want to know how it’s done. You will be surprised how many people will want to know about your knowledge, again this is another niche.Lets say your day job is a car mechanic you could set up a website offering your knowledge and experience on fault finding, people would rather pay you a small fee so they could try to fix the problem themselves instead of taking it to the garage that charge a very high price to fix it. That’s another niche and a home based business.Your home based business could be made up of many small or sub niches that could give you a very good income for the rest of your life. It’s not as hard as you may think it is to get set up, my advise would be to take your time and don’t rush, do some research on Google to find out if there is a need for your service. A good place to check out is Google trends.Whatever you do never ever give up on your dream to have your own home based business, like I said before there is a niche out there for everyone.

A home based business can be likened to the operation of a traditional business operation, to be a success, the owner or manager must exercise prudence, dedication, perseverance and discipline in overseeing its day-to-day operations. In addition, the home based business owner is literally hands-on, as the success or failure of the business lies on his hands.

If you want to have a successful home based business, you must keep in mind the following: First, follow a schedule for your day to day operations. Although the idea in establishing a home based business is to be free from the organizational structure of a traditional office, you may find the need to set an accomplishment task for the day. In doing so, you will have an idea how much time you spend doing the actual work and what you have managed to achieve during the day. There are many temptations if you decide to work at home and you should be able to set a limit for the time spent doing household chores. Time management is crucial for a successful home based business.

Second, develop a system that works for you. There may be times that you need to go out and meet a client. It is better if you have an organizer so that you can keep track of what needs to be done even outside your home. Though a computer at home is advisable so that it will serve as your main database, keeping a handy, high-tech gadget with you wherever you may be is better.

Third, keep track of your target market. Establishing a reliable network of clients is one thing, maintaining them in order that they may multiply is another. To be successful, a home based business owner must forever be on the lookout for potential clients as well as keeping those already in his portfolio. Marketing your product or service as well as yourself is essential to your business? success.

A successful home based business requires a mixture of the above-enumerated factors.

Anyone remotely involved with small businesses, whether as a consultant, lender, supplier, leasing specialist, trade association, or simply as a consumer who is tired of driving by sections of town and wondering why your favorite business unceremoniously threw in the towel, would very much like to hear some good news. Not to mention the small business owner itself. After all, there are 27 million small businesses that deserve to be thriving in this nation, but too often were ignored by the Bush administration. Classically non-complainers by nature, they just want a scrap of hope thrown their way. And I’m not talking about wide-eyed idealists looking for handouts-in all due respect to Emily Dickinson, they’re not looking for the”thing with feathers that perches in the soul”. Just give us a few bucks and we will run with it. This is a continuing article (20 in all) on the subject: Help. Is anyone out there loaning to small businesses anymore?

Fortunately there is a loan program out there and SBA lenders are actually making loans currently: the Community Express Loan Program. This gives unsecured small business loans between $5,000 and $50,000 with very little paperwork, answers typically in two days, interest rates presently at 7.75%, funding and two weeks, and monies wired directly to your business account. There are still lenders participating in this program, although Congress has failed to make the program permanent and still has a 10% cap on the number of loans.

Enter the Obama stimulus bill. Let us look how it affects this program and small business lending as a whole.

If you have tried to wade through the 1,100 or so pages of the new stimulus bill (American Recovery and Reinvestment Act of 2009), you know its like chipping through granite. But let me pull out a little gem. It now allows the U.S. Small Business Administration (SBA to you) to guarantee up to 90% of loans made by private lenders under their program. Let me explain. This is great for Community Express.

When the Small Business Act was enacted in 1958, it had a very simple mission. Find a way to get loans to small businesses that couldn’t get them through traditional channels. It did this in an ingenious way. They knew banks where reluctant to loan to small businesses, especially startups, because of fear of failure. So the SBA collected a fee on each loan and used this as a fund to pay banks if there was a default. Bingo, there was invented the SBA guarantee fee. It doesn’t take a degree in rocket science from MIT and an MBA from Harvard to know this gives incentives to the banks to make more loans.

SBA loan programs have guarantees from 50% to 85%. Specifically, the SBA currently has an 85% guarantee on loans up to $150,000 and up to 75% on loans above $150,000. On the other hand, there are some programs that only go as high as 50%, including the Express Loan program (for those types of loans the new guarantee will not change). With the new stimulus bill, the SBA has the right to increase these fees to 90%.

Think about this for a moment. Simple math tells us more guarantee, the greater the likelihood of the bank making the loan. For goodness sakes, 90% is tapping on the door of a 100% guarantee! Also note the guaranteed portion is typically sold on the secondary market (which has recently shut down to almost nothing) so there is more chance for loans to be sold and more money to go back into the coffers of the banks for further lending.

Notice I said the SBA has the right to increase it to 90%. It can pick which program. And it has not occurred yet. But if I was a betting person, I would say they would be seriously looking at most of the programs because everyone is scraping for ideas to revive the economy.

For those addicted to primary source documents, this is what the new statute, in relevant part (my attorney wanted me to add that) says:

SEC. 502. ECONOMIC STIMULUS LENDING PROGRAM FOR SMALL BUSINESSES. (a) PURPOSE- The purpose of this section is to permit the Small Business Administration to guarantee up to 90 percent of qualifying small business loans made by eligible lenders.
(b) DEFINITIONS- For purposes of this section:
(1) The term ‘Administrator’ means the Administrator of the Small Business Administration.
(2) The term ‘qualifying small business loan’ means any loan to a small business concern pursuant to section 7(a) of the Small Business Act (15 U.S.C. 636) or title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 and following) except for such loans made under section 7(a)(31).

There is also a sunset provision under Subparagraph (f) that the guarantees are only good for one year after enactment of the bill, unless extended by Congress.

So what does it do for me now as a small business owner? Well now the not so good news. I predict the SBA will be increasing many of its programs to 90%. But to get the banks in the lending mood again, there has to be a secondary market. There is also new legislation on that, which we will discuss in another article. But once we have a secondary market, I predict that they banks will not only loan, but do so in a big way. For three reasons:

First, history tells us when there is economic inactivity due primarily to depressed conditions, when the cycle changes for the better, like a sling shot affect, it changes dramatically. Remember when people were unable to refinance or purchase their homes because of tight markets and high interest rates? The rates went down and many jumped at the chance to refinance, improve their homes, and purchase (some say too precipitously) with abundance. Although this is an overstatement and also depends upon other factors such as employment, standards of living, etc., the analogy holds that when things loosen up, there will be a substantial number of business loans.

Secondly, banks are in large part in the business of making loans and they have not been doing so for some time. They will be anxious to make profits again.

Lastly, simple economics tells us when there is a vacuum in the market; capital will rush in and take advantage of that open market and initial lack of competition. Large banks are not making business loans so small community banks are starting to rush in to take over the arena. Give them a secondary market and they will explode.