Starting a home based business has myriad advantages over a regular 9-5 job. It gives you freedom to work the way you want and also gives you flexibility to work when you want to. However, it has its share of risks too. Let’s see what they are.

Security

The most important reason why people hesitate to run their own business is paycheck security. They are accustomed to getting regular paychecks and fear letting go of this safety net since it is unknown as to when they will begin seeing any income from their new business.

However, if the current economic downturn is anything to go by, security is nothing more than an illusion. People who had secure jobs, earning a fat pay in their so-called secure jobs until recently, have been kicked out for no fault of theirs as a result of the company cutting expenses.

Results

Even if you do all of the hard work to make your home based business a success, there is no guarantee that you will always achieve what you want. The results depend on many external factors like market conditions, competition and the economy among others.

When you start up a home based business, you will need time to learn all the skills required to work efficiently. Chances are that your income will be reduced, especially during the initial startup period. However, with a solid business plan, hard work and a certain amount of luck, there is a good chance that you will achieve your goals.

Family

You home will no longer be just a place where you get to spend time with your family. Your home will now be your work space and as a result you are likely to have a lot of interruptions and possible family disturbances which may affect your productivity.

Additionally, since you are running a business full time, you may not be able to spend a lot of time with your family, which can affect your relationships. You will need to find a balance between family time and work time in order to maintain your family life and to succeed in your business.

Avoiding the risks

Now that you know what kinds of risks are involved in starting your own business, let’s see what we can do in order to reduce or even completely avoid those risks. The best way to minimize risks is, of course, planning as much as you can in advance, so that you do not face unexpected situations.

Starting small is a smart option if you are working on a limited budget and not sure if the money you invest in your home business will bring in good returns.

If you feel that the risks of doing it are too much, consider doing it part time at least in the beginning. This way, you can continue getting a paycheck from your current job while you work at home and learn about the intricacies of various aspects of a home business.

When you are confident that you can handle the entire business yourself and live off the initial income that it initially generates, you can then leave your regular job and enjoy the freedom that your own business will give you.

You will be much better off assessing all the risks and opportunities associated with a home based business before embarking on such a journey rather than regretting your decision later. Remember that these risks are not something that cannot be overcome, given the potential returns that you can receive from starting a home based business