Here are our favorite questions to ask successful home-business people: What surprises did you have? Did you encounter any detours? Were there any land mines hiding along your path? And, indeed, whether they start a business from scratch, buy a franchise, or join a direct-sales organization, their answers indicate similar surprises, detours, and roadblocks. Here are the most common problems and some ideas on how to avoid them.

Never Getting Started

Many who hope to start a business never get beyond the wishful-thinking stage. Under the pressure of our day-to-day responsibilities, some brilliant ideas and good intentions get put on the back burner and remain a matter of "Someday I'm going to..." A few of these ideas, of course, are best forgotten. But unless you give them a chance, you'll never know which ones would have worked -- until one day you read in the paper or see on TV that someone else beat you to it and is turning the same idea into a success story.

To avoid the death of a good idea, plan to research and test yours as soon as you get it. Begin by reading up on the subject and talking with others who know about what you want to do. Find out who's already working in the field. Tell other people about your idea and get their reactions. If the idea still seems good, make a step-by-step plan to test it, and establish target dates to complete each step. Then put your plan into action.

By breaking your research, testing, and action steps into small chunks, you can perform a future-oriented small task on even the busiest of days.

Running into Money Problems

Lack of capital and proper financial management are the most common reasons small businesses fail. Here are some of the typical financial problems that home businesses encounter:

  • Not having enough money to cover start-up and operating expenses
  • Not having sufficient funds with which to grow
  • Insufficient funds for proper marketing
  • Too much debt
  • Cash flow problems
  • Inadequate financial planning
  • Not charging enough to make a profit
  • Poor credit and collection practices
  • Inadequate bookkeeping

Start small.

Unless you have extensive experience in running a business like the one you plan to start and have contracts in hand, we advise that you keep your start-up expenses low. For example, Cynthia Post started a part-time calligraphy business with a $75 pen set; within a few months, she attained a nice side income from producing menus for local restaurants. Laura Ruhle launched Twice-Loved Treasures with only $250; she sells collectibles and dolls through the online auction eBay. She now processes more than 140 invoices monthly and has surpassed her former corporate salary.

Your business may demand more of an initial investment, but chances are you will be able to keep your cash outlays to less than $5,000. Why? First, that's what most people do. The Small Business Administration reports that 65% of all businesses are started with less than $5,000. Now, given the fact that almost half of all U.S. households have a personal computer and printer and that the cost of office technology keeps going down while the Internet provides you with access to information, low-cost communication, and customers, most of your start-up money can go into marketing expenses such as association dues, samples, and software to help operate your business.

If your resources are limited, start gradually. Use your brains instead of your checkbook. Find someone in a college art class to design your logo, cards, and stationery. Use your printer and preprinted paper to print your own business cards and stationery in small quantities. Even if you're unemployed and have little savings, you may be able to use unemployment insurance funds to start your business. Because of successful pilot programs in Massachusetts and Washington, Congress, as part of the North American Free Trade Act, authorized the states to pass legislation that will allow up to 5% of people receiving unemployment insurance to start businesses. The Washington and Massachusetts programs found that people starting businesses were able to get off unemployment more quickly than those who were looking for jobs.