Choosing the Home-Based Business Type That's Right for You

Have you dreamed of taking the plunge, quitting your job, and starting your own home-based business? Working at home is a dream for many people, but should not be entered into lightly. If you're reading this, you've probably already decided that you want to start your own home-based business. But which type is right for you?

There are two main types of home-based businesses: first, there are service businesses, where you perform a service for the customer and they pay you. Second, there are retail businesses, where you sell a physical object to customers. Before deciding what type of home-based business to start, take a look at these two types of businesses and see which one better suits you.

Service businesses. Some examples of service home-based businesses are cleaning homes, childcare, freelance writing or editing, wedding consulting, and desktop publishing. Companies and individuals hire you out and you perform your task. In service businesses, you must be prepared to market yourself. This is very different than a retail business, where you are marketing your product. A resume, including any pertinent service jobs and related experience, is very important. You will need to be able to sell yourself to potential clients, ensuring them that you have an excellent work ethic, that you will be able to meet deadlines, and that you have the experience and education necessary for the job.

In some service home-based businesses, such as freelance editing, childcare, and tax preparation, you will need to brush up on your skills on a regular basis by attending classes, conferences, or by receiving certification. Be prepared to take time out for these important educational sessions, as they will boost your marketability.

When considering what type of home-based business to start, list your talents and experiences. Do you enjoy helping others? Are you confident enough to sell yourself as an excellent employee? Are you interested in continuing your education and perfecting your skills? Is the service-oriented business you are considering something that you love to do? If you can answer yes to the above questions, a service-oriented business may be the right track to take.

Retail business.Some examples of retail businesses are running a mail-order catalog, direct sales (Mary Kay, Avon, etc.), online bookstores, eBay auctioneering, or selling at a farmer's market or craft fairs. You sell your product to individuals or companies. Although you are marketing yourself to some degree in respect to your salesmanship, you are mostly going to need to market your product. This may mean creating a website to show off your products, giving out samples and a business card to people you know, or designing a direct mail advertisement. Your product needs to be unique, and you will need to convince people that they will be happier for having bought it.

In retail businesses you will need to be careful about costs of starting up. Depending on what type of retail home-based business you are running, you will need to purchase supplies, pay for marketing cost, and figure out exactly what type of profit you will be making. Let's say you are selling an item through direct mail. If you charge $50 for the item, and ten people buy it, you will be making a net of $500. After overhead costs, though, you may find out that you are really only making about $200. Decide how much you want to make and set some goals.

Again, you'll need to list your talents and experience. Do you enjoy selling things? Are you planning on selling a product that you really believe in? Are you persuasive and convincing? If you can answer yes to the above questions, you'll want to consider a retail home-based business.

With any home-based business you choose, you will need to become educated on tax issues, startup costs, and state regulations. Do some research, set some goals, and have fun!