6 steps to start business at home

Profit your passion

Both expertise and enthusiasm are critical to start a business of your own but making a profit requires some serious know-homw. Take these steps to turn your dream into your livelihood.

Talk it up

The first phase in realizing your vision is to share it with friends, family and other people whose skills and savvy you respect. Feedback strengthens your idea and makes you more likely to see the project through.

How to do it: At surveymonkey.com, create questionnaires about your potential business for friends, acquaintances, Facebook connections and anyone else whose opinion you value. Then e-mail the survey to your contacts and reap the benefits of your own market research for free! You might learn that your assumptions about the going rate for, say, life-coaching sessions, were off the mark, or that people would pay more if the coach came to their home.

Locate your customers

No matter what your area of expertise may be, if you can define your potential clients and identify where to find them, it will be easier to get your product in their hands.

How to do it: If your town has an online message board, check groups and discussion threads for customers or use physical bulletin boards at coffee houses and community centers. Meetup.comcan help you reach people with mutual interests. Search Google Groups for a community related to your product. Designers can bid for projects at99designs.com. Sell your administrative, technical or creative services to clients on elance.com and guru.com.

Check out your competition

Thinking of launching a cupcake enterprise? It’s better to know beforehand if three already exist in your town. Identifying businesses like yours not only gives you an idea of the market and pricing, but it also allows you to differentiate yourself from your competitors.

How to do it: Be your target customer and call similar businesses to ask about their prices and services. In stores, don’t be afraid to ask a sales associate about the quality and popularity of different products. Online, use google.com to get an idea of how many local businesses exist in your niche.

Set your price

Figuring out how much to charge takes trial and error. The trick is to determine what customers are willing to pay without undervaluing your costs in materials, time and skills. If it takes you six hours and $5 in supplies to make a craft that you’re selling for $15, your price is too low.

How to do it: Pricing is more an art than a science. Use the free time-tracking program downloadable attimeedition.com so you know how many hours you spend on each project and can bill your clients accordingly.

Mind the money

Staying on top of your expenses, invoices, income and deductions is essential to building a successful business. Create a simple way to track paperwork regularly and designate a folder to collect receipts. If your operation starts to take off, consider hiring an accountant.

How to do it: Outright.com makes expense and income tracking a breeze (free for 30 days, then $10 per month).