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Home Business Factors


Home Business Start-Up Factors

The Decision to Start your Home-Based Business

Home Business Factors | Home Business Start-up


A personal self-evaluation should also be done as follows:

  • Can you carry the entire load yourself?
  • Do you have the self-discipline to work on your own?
  • Can you handle the responsibility?
  • Can you comply with all regulations and licenses?
  • Can you handle all the record keeping?
  • Can you handle all the distractions around the house?
  • Do you have sufficient start-up capital?

You will need the complete support from spouse and family

Your family must take your business seriously

The main reasons for failure of home businesses are:

  • Lack of planning.
  • Poor management.
  • Insufficient financial backing.
  • Lack of initial research of type of business and industry.

Advantages and disadvantages of a home business


  • Flexible schedule – more control of your time.
  • Integration of family and work responsibilities.
  • No corporate politics or bureaucracy.
  • No commuting (unless in some outside service business)
  • Control of your own personal environment.
  • Self-determination and independence.
  • Personal fulfillment.
  • Personal creativity.
  • Flexibility to move to another community.


  • Requires high degree of self-discipline.
  • You must shoulder the whole load (full responsibility).
  • No employee fringe benefits.
  • No job security.
  • Loss of home space.
  • Long hours.
  • Legal requirements possibly including zoning regulations.

Choosing the Business

A home-based business can be either product-oriented or service-oriented.

Product-oriented businesses are usually of two types:

1) selling products made by you, family members and or employees.

2) selling products manufactured by others and purchased by you for resale or sold on an order basis.

A service-oriented business may involve performing a service at the place of business. Some examples would be: word processing, tutoring, bookkeeping or child care, or at another location such as house painting, carpet cleaning or some type of consulting service.

Something to think about: Carefully consider the potential liability involved with the specific type of business. For example, in the case of child care or some types of contracting business, you would want to form a corporate business entity and, in addition, obtain full insurance coverage.

Give some serious thought to doing the type of work involved. While you may love a hobby, do you want to do this day in and day out?

For example, you may love flying airplanes, but flight instruction and teaching others to fly can be very stressful (I know this from personal experience).

One type of business that can solve some of the drawbacks of a home business is forming your own rep business. This can be as a manufacturers rep or an independent sales rep for a company.

These are set up as Independent Contractor positions (commission only – 1099 taxes).

See Independent Contractor

If you enter into an independent contractor type of working relationship, be sure to carefully review the independent contractor agreement. Make sure that all necessary elements are included in the agreement. This can not be overemphasized — it is very important, not only to you the independent contractor, but also to the business that you are doing work for.

The IRS is ramping up its auditing in this area — why?, because it’s an easy source of income for them. Many business are not properly set up in this area, and do not comply with the guidelines.  

See Independent Contractor Start-Up


Opportunity or Scam ?

The media and the internet (including Craigslist) are replete with ads for home businesses. Some are realistic but most are just going to cost you some money up-front, with no return on investment.

Check it out — “if it seems to good to be true, it probably is”.


Home Business Factors
Work From Home Online

Federal Trade Commission (FTC)

It’s a good idea to be familiar with some of the FTC regulations covering small business, especially Internet Marketers and eCommerce.

Following are a few FTC government sites that are helpful:

see FTC Information for Business 

see FTC Information for eCommerce





Home Business Factors