A Simple Guide to

Home-Based Business

Build your business from scratch

:Table of Contents

1- About this Guide

2- Introduction

3- A true story

4- What is home-based business

5- Is it a new concept?

6- Is Home-Based business for you?

7- Why Home-Based business?

8- Are you ready for success?

9- Powerful idea generator.

10- Some great ideas for your business

11- How do I come up with a winning business idea?

12- Think like an expert!

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 13- Is your idea feasible?

14- Feasibility study made easy

15- Build your business from scratch

16- Easy to do business plan

1- About this Guide:

This guide has all you need to start a small or a home-based business. You don’t have to be an expert to use this
guide, Follow it step by step, and it will help you start your business immediately. It’s very simple, no complicated
professional terms. By deciding to start a business you took the first step towards success.

2- Introduction:

Can we save our economy; what about unemployment increasing at rocket speed?

 A lot believe that small business is the answer, and hopes are building towards young individuals

taking the initiative to build a better future

 small business is the key that opens the gate for creativity and great potentials

 Successful, self respected, productive young individuals could do wonders to any country, it’s the

first step towards civilization

But let’s face it; not everyone has what it takes to start a business, just pop the word business and you’re sure to

get so much negative response. This is where the concept of Home-based business takes place.

3- A true story:

A few years ago, three young men decided they can’t wait for opportunity to come knocking at the door. They

shared the same dream, had the same ambition and agreed they didn’t want to waste their lives on ordinary office

tasks.

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 Their dream was so big, but their resources were so little. They were young, inexperienced, add to that lack of

money and you get the words: “failure”, “you are crazy”, “impossible”, “your dreaming”…..etc. Maybe to you it is

but it didn’t stop them.

They went for the garage of their house, a computer they already had and all the hard work, planning, education,

dedication, and passion in the world.

In no time they had “Google”, it’s not a joke, and they became the founders and owners of the most successful

search engine on the web.

How did they do it?!!!!!!!!!

They were SERIOUS about pursuing their dream and reaching their goals.

4- What is Home-Based Business?

 Simply Home-based business is a way of starting and running your business from the convenience
of your home.

 It eliminates major obstacles such as huge investment,

experience, and expenses.
 Nearly all kinds of business can be home-based

 Home-based business has the huge potential of expanding into something bigger.

 Anyone with the right planning can be a business owner in no time.

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5- Is it a new concept?

Not really, home-based business has always been

a solution or a financial source for so many people and lately, it has been taken very seriously, why not when all
sources of business are being run from homes, more people Are considering financial independence, more ideas are
put to work, not to mention stories of real people starting With, literally nothing, and hitting it off. Today Home-based
Business isn’t exclusive to catering; it’s a real Business that requires all the elements of a successful Business, only
much easier.

6- Is home-based business for you ?

1. Young inexperienced individuals with great ideas and greater dreams

2. People possessing the right tools for being business owners but lack resources
3. Non- risk takers, it’s the safest way to start
4. Women in general and house wives and mothers in particular
5. Retirees, to benefit from their experience and vision (ex: consulting business)
6. Unemployed individuals of all ages
7. Employees dreaming of quitting their overly-demanding, frustrating jobs.
8. People claiming financial growth, it’s the way to start
9. People who can turn their hobbies or special talents into good businesses

7- Why home-based business?

There are so many advantages; we’ve listed a few:

1. It’s for everyone whether your 18 years old or 60 years old

2. Owning your business doesn’t mean you must have a huge amount of money

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 3. Financial independence
4. Choosing your own working hours and adjusting it according to your life style
5. You are your own boss
6. It eliminates major expenses like rental, decoration, furniture, transportation, wardrobe, food…etc

7. You will be doing something you love or believe in, work can be fun after all

8. You will work according to your own vision, goals, and strategies

9. Gaining self respect, sense of purpose, confidence and responsibility

10. You can start immediately all you need is a bit of planning and lots of courage
11. Although there’s a need for some planning, it’s not like you have to be an expert

12. You can start with the resources at hand and grow step by step

13. The challenge of choosing a suitable location isn’t there anymore

14. It’s an excellent way to decrease unemployment and fast

15. It’s the best solution for house wives and stay at home mothers.
16. Almost a risk free way to start a business

17. Help the country’s economy, produces new ideas, and makes use of talents
18. Home-based business could grow into a big successful business
19. You can be a role model and an inspiration for so many people

8- Are you ready for success?

Do you have what it takes to be a business man/woman?

A lot of people dream about having their own business and some of them even take the risk, but why don’t they
all succeed?

To start a business and succeed, you need to do research, consult someone if possible, plan, plan and then plan
some more. But that’s not all, there are some personal factors and they are no less important than planning.

Keys to success:

 A vision

 A goal

 A Motive

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  Faith

 Skills and knowledge

 Planning

 Determination and patience

 Hard work and dedication

 Flexibility

 Self control

 Seriousness

Starting a business isn’t as easy ride; it needs so much dedication, patience and hard work. You have to invest so
much time, knowledge and hard work. For you to have the motivation and energy needed to go on and work to
your full potentials, you must have a vision and a goal in other words a dream.

Take a piece of paper and a pen. Sit somewhere quiet, no interruptions, take a couple of deep breaths, and write
down the following: (be very specific)

• Why do you want to open a business?

• What are your personal goals?

• What are your business objectives (ex: Having locations in 30 countries)

• Imagine yourself 5 years from now, how do you see yourself, describe your dream, what do you want to be
accomplished…. Etc?

Write that down in a nice notebook, use color, draw your dream if you can, the more you give it time the more you will
engrave it deep in your heart. Put it in a safe place. Now you can look at it whenever you feel down, some people
write their goals down; hang them up, to look at them every day for motivation.

9- Idea Generator:

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First some inspiration:

She was a typical teenager, it was the 1980’s and Amy Wolf was having a tour in Europe when she saw a store selling
music at London’s Heathrow airport. She flew back with the idea in mind (retailing in America’s airports back then was
limited to restaurants and newsstands). Five years later she decided to start her business; she founded AltiTunes
Partners LP, now a chain of music stores with 28 locations and 15 million $ in profit.

The world famous natural care products store (The Body Shop) started as a very courageous young woman making
her products at home and selling them.

Ideas can change nations, some people made billions out of one single idea. Imagine what good ideas could do for
our Countries. Now you need an idea for your business (assuming you haven’t got one already), here is some help:

 Keep a note book handy and write down any idea that comes to your mind, sometimes we get ideas when
we are the least expecting

 Brain storming: sit down with friends, write all the ideas you come up with
 Ask people around you, people you trust or people with experience
 Sit down in a quiet place and let your imagination flow
 Exercise: take a couple of deep breathes, hold an object, close your eyes try to imagine the object, apply
some improvements or changes to it with your eyes close, be creative. Do this exercise daily and you will have
better focus.

10- Some great ideas for your business:

• Cleaning services

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 • Card making • Clothing
• Natural soap making • Specialty T-shirts
• Candle making • Baby clothing
• Baby sitting services • Decorative items (flowers, rugs…etc)
• Natural beauty products • Prayer rugs and beads
• Advertising items and graphic design
• Interior design (a group of talented people
• Catering
working as partners)
• Internet marketing • Gourmet chocolate
• Children learning center
• Party favors (event decorative items)

I know you can get up with greater ideas. You can even add improvements to an old product or even
represent it in a unique way. Don’t do something because it worked for others, try to be unique in your way
and stand out from the crowd.

11- How do I come up with a wining business idea?

Finding the right business idea is a matter of creating a vision, determining your strengths and what the market needs.
These steps should get you started:

 Having a vision

 What you are good at

 What you like to do

 What the market needs

A vision:

Discussed earlier in (are you ready for success)

What you are good at:

Sometimes certain skills and even hobbies could be a foundation of a good business, write down a list of all the
different skills you have.

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Things you like:

List the things you enjoy doing, stretch beyond your skills and hobbies to things you like but not necessarily good at.

What the market need:

You looked inward to come up with a business idea. Now it’s time to look outward. Discover an unfilled need in the
market, or a way to develop a product. Try to be creative and come up with something new.

How can your idea be extra creative?

We will use a method called (PMI)1 it’s not intended to check if your idea is good or bad; but to make it more creative.
Fill the table write as much points as you could. Take your time; think well; it’s a way to get you thinking. Start with the
positives2 then move on:

Positive Negative Interest

Example:

Children’s toy making

It’s a thinking skill that leads to better thinking and more creative ideas 1
If you don’t go one by one, this method won’t work 2

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 Positive
I love crafts and toy making
I know how to make toys
I have creative ideas
I have a fun personality
People like to spend money on toys
It’s affordable
The market is in need for good local
toy
I can start with a group of friends
People love their toys and like to
keep them
I can turn my garage into a small
factory
Good income
Easy to market
Negative Interest
I have so much to learn
Toys are easily destroyed
Too much work We need to make toys that don’t
Needs a lot of raw material need so much raw material, aren’t
There are always new designs, I
high maintenance, affordable,
won’t keep up
plenty of brand names unique (less competition), making
There are so many toy stores, lots of them is easy to learn, fun, and
competition special
Some toys can be expensive
I won’t be able to make most kinds of
toys

That was a simple example. We didn’t exclude the idea because of its negative sides; we used the negative
sides to improve it and produce an even better idea.

Wooden Toys

12- Think like an expert:

Before we get you going with business planning let’s go a little deeper and reveal some business secrets. Let’s be
experts, let’s enter the domain of marketing.

A lot of people think that marketing is all about putting a couple of ads in the local news paper. Marketing is a very
powerful and important tool, and not only for business.

As much as products need marketing we need marketing too. If you were a speaker, writer, or someone who
addresses the public, don’t you need to market your ideas? Doesn’t your image need marketing? If you were looking
for a job, don’t you need to market yourself?

What is marketing?

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Think of marketing as a relationship, or even a marriage. For a relationship to succeed both parties must understand
each other, it’s very important that you know the other person very well, because understanding is the essence of
communication.

Marketing is a relationship between you and your customer; you can’t please or sell your customers if you don’t know
what they like, how they like it, their needs, demands, and taste. In other words step out of your brain and enter your
customer’s brain.

What do I need to know about my customers?

First you have to know who your customers are. Define them by age, gender, job, income, social class and area. This
information is very important for so many reasons:

 You don’t want to sell a product no one wants to buy

 It tells you if your product needs improvement
 It tells you how to address your customers and appeal to them
 How to attract their attention
 Shows you what words, marketing tools and strategies to use
 The price they are willing to pay (helps you price your product)
 The best place to locate them in order to show your product to them

Example: You decided to make T-shirts for teenage girls, let’s say you are 30 years old. If you don’t make an
effort to know your target customers, you might end up selling nothing. You should know what teenage girls like,
what’s in, what colors and designs they prefer… etc. Now you are thinking of making some flyers, what are you
going to write on them? Are you going to use terms that you think are appealing? Won’t it be better if you know
exactly the words that attract their attention?

How do I define my customers?

Let’s say you are selling school bags, you may define them as follows:

Age Gender area income preference

4 - 13 Males Females XXXX High Cartoon prints

As you see defining your customers makes it a lot easier for you to produce the product they want, saving you so
much money and at the end they will buy your product.

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Know your competition:

You won’t be the only one in the market, that’s why you have to give customers a reason why they should buy from
you instead of your competitors. To do so, you should first know all you can about your competitors.

Knowing competitors also helps you learn from their mistakes and benefit from their strong points. Research direct
competitors, who are in the area you plan to work in

What does that mean?

Let’s say you are in the cake selling business, it’s very important before you start, to specify the area you will work in,
let’s say you live in Cairo, it would be unwise as a small business to consider Cairo your area, there would be so
much competition (you may not stand a chance) and with a limited budget you might sacrifice quality for the sake of
quantity (by wanting to reach more people). Instead, concentrate your effort on a specific area, as a start, you can
expand later, but you have to be specific at first. Focusing on an area, specific type of customers or product is called
a niche market

What is a niche?

It means focus; a successful marketing strategy especially for small business. You narrow down your market,
customers or area, this way you limit your competition making it easier for you to succeed. It’s also about limiting your
products or services so instead of doing so many things you do one or a few things but do them well and be known
for that. When you are more focused you are more effective.

Example: a company decides to produce bottled mineral water; you might think they are crazy; they are if they aren’t
planning to come up with something new. Let’s say they saw that people who work out buy bottled mineral water, so
they think why not produce small bottles, add graphics, and a slogan that says something like “water keeps you fit”?
They created their niche market. Now they have a better chance of succeeding.

Specialization is a very powerful word in marketing. When you specialize you enter a smaller market, have less
competition and your chances of being creative are endless.

Found your business idea?

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Now you’ve got an idea for your business. I bet you are so excited; keep in mind that determining what you want is

only the first step. You still got a lot of homework to do. Most important do something! Don’t sit back and wait. Do you
know that billions of ideas are forgotten before they begin; a lot of people give up before they start!
You’ve come along way to quit now, so let’s move on and get serious.

13- Is your idea feasible?

Before you start?

To start your Feasibility Study - start with your business idea, on paper. Paint a picture of your idea in words so that
anyone reading this description knows exactly what you are talking about. You should like the idea because you will
be in business for a long time.

Source of information for your feasibility study:

 Asking friends, family and people around you

 People with experience, consultants.

 Internet

 Books, publications, business article

 Watch your Competitors (how they work, what they are doing right or wrong, their marketing strategies, their
products…etc)

14- Feasibility study made easy:

easy:

What is it? Why is it important?

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  Feasibility: means considering all factors before making any decision (CAF)3.

 A feasibility study could mean the difference between success and failure.

 Gives you all the facts and figures needed to start your business.

 Allows discovering alternative approaches and solutions to putting your idea into work

 Provides you with information that helps you write your business plan

 The Study should be written by you; for you; in language and terms you can relate to.

Elements of a feasibility study:

 Idea feasibility (product or service)

 The Market

 Management and personnel

 Cost

The Product or service (Idea):

( :

 What business are you in?

 Describe your product or service, what are its benefits

 Do you know enough about your product:

♣ Product’s history

♣ Know your product well, in details

♣ Get expert advice or training if needed

♣ Materials needed to make the product

It’s a thinking skill that we use in order to make better decisions 3

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 ♣ The cost of each of the material?
♣ Who are the suppliers you intend to deal with?
♣ How do they deliver their material?
♣ Does that add any additional cost?
♣ The exact process in which the product is made
♣ What are the costs involved?
♣ Who will make the product?
♣ Would that add extra costs?
♣ What are the equipments and tools needed for production?
♣ Where will you get them, how much would they cost?
♣ Did you choose your production site?
♣ Does it need preparations? How?
♣ How much would that cost you?

♣ Would there be some kind of packaging?

♣ How and were would the packaging take place?
♣ Who will do the packaging?
♣ How much would it cost?

The Market:

 Analyzing the market:

♣ Is there a need for your product?

♣ Explain, describe this need.
♣ Do you think you will succeed in entering the market?

♣ What is your strategy?4

♣ What are your strong points?

♣ What are your weak points?

♣ How are you going to deal with them?

♣ How are you going to market your product?

♣ Did you specify the area where you will market your product?
♣ Can you afford a marketing budget?
♣ Did you decide how much is it?

♣ If you can’t afford one, what are your alternative methods?

To enter a market you should come with something special whether in the product itself, marketing, 4
customer relations, prices, support of an outside element….etc

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  Analyzing the competition:

♣ Who are your direct competitors?5

♣ How long have they been in the market?

♣ What are their prices for the same product?
♣ What are their strong and weak points?
♣ How can you benefit from them?

♣ Do you know anything about their working strategies?

♣ How can you compete with them?

 Analyzing your customers:

♣ Define your customers (gender, career, income, area ...etc)

♣ Where and how can you locate them?
♣ Why do they need your product?
♣ Is it a continuing need (would they buy more than once)?

♣ Can they afford your product, explain?

♣ Why would they buy from you instead of your competitor?
♣ Do you have a strategy for dealing with customers?

♣ Did you think of ways for wining their loyalty?

♣ How and where will they see your product?
♣ Are there costs involved (specify)?
♣ How are you going to deliver it to them?
♣ How much would that cost you?

Management and personnel:

 Will you have partners? Who are they?

 What are their salaries or shares of the profit?

 What are their qualifications?

 What are their job descriptions?

 Will they take part in management and decision making?

selling the same product and operating in the same area you are planning to work in 5

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  Specify each partner’s role.
 Will there be any employees? Who are they?
 What are their qualifications?
 What are their job descriptions?
 What are their salaries?

 Will any of your staff need training?

 How much would that cost you?

The cost:

Glossary of financial terms:

Start- up costs:
The costs you need to get your business up and running.

Operating expenses:
The money spent on day-to-day operations.

Variable costs:
Costs directly involved in production, like raw material

Fixed costs:
Costs that aren’t directly linked to production like rent, utilities …etc

Unit cost (variable):

Cost associated with producing an additional unit (cost of one unit)

Total costs:
Sum of fixed costs and variable costs.

Total revenue:
Income from sales

Profit :
Profit = Total revenues – total costs

Breakeven:
Number of units required to sell to make a profit of zero. Break-even in when total cost is equal to total
revenue.

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 Plan your costs:

Before starting your business, it’s important that you have answers to the following:

♣ What are your startup costs? 

♣ What are your monthly operating costs? 

♣ What’s your target profit? 

♣ How are you going to price your products? 

♣ How much sales (revenue) does your business need to survive? 

♣ How much sales do you need in order to reach your target profits? 

Steps:

1. Calculating startup costs

2. Operating expenses
3. Variable and fixed costs
4. Pricing
5. Break even point
6. Amount of targeted sales

1. Calculating start- up costs:

When starting a new business, one should determine start-up costs in order to know precisely what and how to get
the business up and running.

Because each venture is different, there is no exact item and cost template. You’ve already gathered information at
the beginning of this study; add any other costs you think your business needs to get started. If the end total is higher
than you can afford, you can always deduct or even skip some items depending on your priorities.

Startup costs: (sample):

 Site preparation ……………

 Equipment and tools …………….
 Office equipment …………….

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  Stationary and supplies …………….

 Opening inventory …………….

 Marketing …………….
 Training ……………..
 Registration ……………..

 Logo design, business cards ……………..

 Other ……………..

Startup costs ………………..

2. Operating expenses:

Many new businesses fail because they under estimate operating expenses, before getting into business write a list
of all the monthly expenses expected in a certain period (six months or a year), this way you’ll monitor cash flow and
prevent problems.

Most experts agree that you should have a money reserve of an amount enough to cover your operating expenses
up to six months in advance.

Operating expenses such as:

• Transport, food and similar • Salaries

expenses • Raw materials
• Maintenance and repairs
• Supplies
• Advertising and promotion
• Packaging, shipping and delivery
• Other

Once you know how much money it will take to keep your business running, you will be able to gauge how much
revenue you need to cover these costs and still make a profit.
3. Variable and fixed costs:

Let’s divide the operating costs we talked about into two parts:

1- Variable costs: are the costs of making each unit. The variable cost of one unit of production is called unit cost.
2- Fixed costs are other expenses not related to production like salaries and rent

Total costs are the sum of all variable and fixed costs put together.

The importance of calculating your costs is to determine how much sales revenue you should make to cover all costs
(break even point) and to start making profit. A lot of businesses fail because they didn’t calculate their break-even
point and went on business thinking they are doing well when in fact they were loosing.

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 4. Pricing:

When pricing your products you should determine how much profit you want to make, your price should go with your
target profit.

How much do I need to make to meet my goals?

Yearly profits:
Monthly profits:

 The price should be higher than the unit cost of the product

 You should set your price according to your profit goals

 Should be low enough to attract customers

 High enough to give business profit
 Ask potential customers (people around you)
 Don’t forget to check your competitors prices
 A price customers can afford

5 . Break- even point

 The break even point is an estimate of the level of sales necessary to operate a business profitably.

 It’s the point where all costs are covered, above this point you start making profit

 Selling below this point tells you that you are in trouble

 To calculate it you have to estimate your unit cost (variable)

 You should estimate your fixed costs over a specific period of time

How to calculate it:

Break even point (in units) = Fixed costs / (unit price- unit cost)

Example: Monthly fixed costs 600 JDs

Unit Price 15 JDs
Variable cost/unit 9 JDs

Break-even volume = 600 / (15-9)

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 = 100 Units
Break-even sales revenue = 100 * (unit price)
= 100 * 15
= 1500 JDs

 This means you need to sell 100 units monthly to reach your break even point where you cover all your

costs, but you have to sell more than 100 units to make profit

 Break even point might make you reconsider your price or profit margin

 To increase profit you must lower your break-even point by decreasing your costs.

15- Build your business from scratch!

Starting a business checklist:

• Making a feasibility study 

• Setting a startup date for your business

• Educating yourself, acquiring the needed information

• Selecting a name for your business, a logo and a slogan

• Registering the company, logo and any other intellectual property

• Preparing your business plan

• Choosing your site

• Remodeling the site (if needed)

• Acquiring office equipment (telephone, fax, computer…etc)

• Buying any equipment needed for the business

• Preparing your inventory

• Making your business cards and marketing material

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16- Easy to do business plan:

What is a Business Plan?

A business plan is a blueprint of your company. Once completed, it will give you goals and direction: a roadmap to
follow in guiding your business through good and bad times

Why is a Business Plan important?

The Success of your business depends upon decisions you make. A business plan allocates resources and measures
the results of your actions, helping you set realistic goals and make decisions. A good business plan will increase your
chances of business success. It will help you identify your customers, market area, pricing strategies, financial and
operational goals. By completing a business plan you will better understand your competitive advantages, new
opportunities, current weaknesses and objectives for the business. Your plan can be adjusted as you go on with your
business

Elements of a business plan (suggested):

1. Cover page
2. Table of contents
3. Business profile
4. Goals and objectives
5. The product / service
6. The market
7. Sales and marketing
8. Management and personnel
9. Financial data
10. Challenges
11. Plans

Business plan outline:

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Cover page:

The purpose of the cover page is to tell the reader what he/she is about to read, it should be appealing and neat
because it says a lot about your business (your image)

Your cover page should say the words “business plan” and should include:

- Business name

- Company logo and slogan

- Address

- Contact information

- Date it was issued

Table of contents:

An index of the contents of your plan

Business profile:

Every business needs a written material to communicate what they offer and the advantages of doing business with
them. It communicates the essence of what you offer. Your Profile is your identity; it’s how you want the market and
competitors to perceive your product or service.

Easy steps for writing a business profile:

1. About the company ( date, type of business, and product)

2. A problem in the market, a gap or an unfilled need
3. Suggest the solution to that problem

4. Your mission (related to the problem above)

5. Why make business with you (advantages)?

Here’s an example:

About the company (Name ) was founded in 2006, we specialize in fashion design and modest women
clothing

The problem Finding quality, fashionable yet modest clothing these days is considered a big

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 challenge for woman, even though the market is filled with fashion stores, it’s hard to
find modest clothes that are fashionable, of good quality and at a reasonable price

The solution That’s why there’s an increasing demand for fashionable, good quality and
comfortable Islamic women clothing
Mission At (…) We provide color, fashion, and energizing beauty in comfortable clothing for the
modern Muslim woman
Why you Our clothes are of the best quality material and are locally produced at the best prices
possible

Goals and objectives:

Short-term goals: profit, customer base, sales … etc

Long-term goals: Profit, expansion, market share, customer base, Product development… etc

The product/ service:

o Product description
o Benefits, advantages, and unique qualities
o The production process ( from raw material till end product)
o Packaging
o Pricing
o Key suppliers ( and any related information)
o Suggestions for future product development

The Market:

o About the market (size, trends, patterns)

o Similar products (price, advantage, disadvantages, description)
o How these products are marketed and presented
o About your competitors (who they are, how they work, their strong points, their weaknesses, their
products…etc)
o About your customers
o Analyze the need for your product

Sales and Marketing:

• Company image

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 • Logo and slogan

• Your niche market

• Marketing budget
• Marketing tools
• Customer service
• Loyalty programs
• Discounts, special offers, free sample …etc
• Sales strategies (outdoor, hiring sales personnel, direct sales… etc)
• How you will represent your product
• Your strategies to enter the market
• Your marketing message

Management:

Key job descriptions, responsibilities, management team, organizational chart, advisors

Financial data:

Start-up costs, Accounting system, inventory status, break-even analysis, projected monthly operating expenses, and
other financial data.

Challenges:

o What are the expected challenges?

o Suggested ways to over come these challenges
o What are your weaknesses?

o How are you going to deal with them?

Plans:

It’s a good idea to plan ahead what you have to do on monthly basis. Add a checklist to check your progress and
make sure your are working according to schedule. Your plans could contain the following:

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o Planned sales volume
o Events
o Number of customers
o Duties for each employee

o Other

At last fear is the enemy of success. Good luck and God bless

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