Beyond Startup

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.

INITIAL GROWTH

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
http://www.ahbbo.com/pricing.http://w
ww.ahbbo.com/pricing.html .

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!

Avoid Premature Expenditure

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.

Use a good accounting software
program rather than hiring an
accountant and hire from your family
first if you need temporary help.
Another good idea is to negotiate with
family members to take over some
household chores you would normally
do yourself to free your time to work on
your business. This works especially
well with pocket-money age children
and teenagers.

During times of temporary overload,
hire temporary staff from a staffing
agency if no family members or
members of your social circle can do the
job.

The Glass Ceiling

After a while, somewhere between the
two year and five year mark, you will
notice that your business is beginning
to stagnate. At this point, you've
stretched yourself and your resources
as far as they can go. You've hit the
glass ceiling, in other words.

At this point, if you want your business
to grow further, you'll have to grow it. It
won't happen as part of an evolutionary
process beyond this point.

BEYOND THE GLASS CEILING

Hire Permanent Employees

The time to hire permanent employees
is when you reach the point that you
can't complete all tasks alone (or with
the help of family members) and/or your
time is worth more than it would

cost to hire someone to complete your