If you are prone to believing in fairy tales, then the ads that promise hundreds of dollars in weekly income for stuffing envelopes or doing mailings are right up your alley. If you have enough sense to recognize something that is too good to be true (and isn’t!), then save your time and energy and avoid falling into the “easy way out” trap. The promises of wealth are real, but it’s not the home-based worker making the money; it’s the entrepreneur selling the pre-packaged business who is experiencing the financial windfall.
In addition:
Avoid businesses that require traffic to and from your home. Your town will have ordinances governing what is and is not allowed in a residential neighborhood. Unless you are prepared to file for variances and risk additional taxes being levied, stick to services where your business can be conducted on-site at the client’s home or business location, by telephone, or via mail or computer.
Avoid making assumptions about the market at which you are aiming. Urban centers can be wonderful areas in which to operate, but check to make sure the competition isn’t so great that you won’t stand a chance. Find out who is doing what you’re planning and how well they’re doing it. If you have to compete, make sure you offer something slightly different from what the others offer.
Avoid complicating your life and your schedule to the point where you cannot be scrupulous about keeping appointments. Word-of-mouth is important to the small business. Don’t ruin yours by taking on more than you can handle or jumping into a business before you have worked out all the details.
Avoid allowing your business to become too scattered. If you are offering a typing service, the fact that someone would also like you to organize their office doesn’t mean you need to add that service to your roster. You might want to try it as a one-shot experiment, but don’t change direction until you are sure you can handle the additional work and do it professionally.
Avoid a business that is too labor-intensive. If growing your business means hiring additional workers, that’s a step in the right direction. If, on the other hand, you can only increase your business by increasing your own working hours beyond what is reasonable and sane, that may be a bad move. Many craft businesses fall into that category. If you are the only artisan in your business capable of making the goods, you will reach an income ceiling beyond which your business simply cannot rise.