Starting a home business is something that a lot of us dream of, but most may never do.  You might have a great idea (and be really excited to work at home, on the couch, in your pajamas, start your day at 10am), but if you don’t have a concrete plan, your dream may fall through.

It’s important not to focus too much on the word “home.”  No matter your location, you’re starting a business, and you need to be prepared to work.  Your success is directly tied to the amount of time and effort you’re willing to put forth.

Choose the Right Home Business

Examine your options fully before you begin.  Have you chosen a product or service that you’re passionate about?  There’s nothing wrong with selling something purely because it’s a guaranteed money-maker, but if you’re excited about it, too, that can make it easier to keep up with your business goals, especially during the startup phase.  Would you still be willing to put in all the necessary effort while things are slow?

Who Will Buy Your Product?

Are people willing to buy your product or service?  Great.  Now dig a little deeper—are they willing to pay a price that will be affordable for them but help keep you in business?  If it doesn’t seem possible to turn a decent profit with the going rate, you may want to consider a different idea.  Decide if you want to run your business full- or part-time.  That will make the difference in knowing whether your expected profits are acceptable enough for you to invest in the business.

Cover Your Business Expenses

You’ll have a lot of expenses to consider, and you want to be prepared for them ahead of time.  You’ll have start-up costs—know how much you’ll need to invest up front so you can include that when determining how long it will take you to start collecting a profit.

Research your insurance options.  Of course, you’ll have to find your own medical and dental benefits, and that can be expensive on your own.  Can your business help cover your costs?  You’ll also need extra insurance to cover your actual business; homeowner’s insurance may not cover you if a customer has an incident on your property while conducting business.  Make sure to acquire any necessary licenses before your apply for insurance.

It’s also a good idea to seek out a good accountant and tax advisor (unless, of course, that’s your profession and your home business idea…then it’s up to you!).  Especially once your business takes off, you want to feel confident that your finances are being handled correctly and efficiently.

Create a Business Plan

Plunging in can be a little easier if you create a business plan.  You will definitely need one if you’ll be applying for a business loan, but it can be helpful even if you’re not.  You’ll be able to see all of your goals in writing, and doing so will force you to spell out every last detail about your business, from marketing research to your mission statement to your future projections.

Treat your home business like an off-site one.  Determine the best hours for you to work and make sure you actually work during them.  There’s no one to tell you what to do and where to be—that’s a definite perk, but it really means that you have to be able to push yourself.  Be committed and do your research and you’ll have a better shot at success.

For some home business ideas and resources, check out Entrepreneur.com.

Do you have good debt or bad debt?  Yes, there is such a thing as good debt, just like there’s good and bad cholesterol.  And you want to make sure you have the good kind.

Good debt is anything that you’ve invested in that will build value over time.  Do you own a home?  That’s good debt.  Are you paying a student loan?  That’s good debt.  So is financing a car or paying for a business loan.  You build equity in your home, your business can turn a profit, and I’ll argue that everyone needs a good education and a car.

This doesn’t mean it’s okay to run out right now and buy a mansion on the lake and a brand new Mercedes.  If you’ve bought more than you need or can really afford, it’s likely you’ll be struggling to meet your payments at some point, and your credit will take a hit.  Call it When Good Debt Goes Bad.

Not surprisingly, credit card debt is usually bad.  If you’re constantly carrying a high balance, that will dent your credit score.  If you use your credit card regularly to go clothes shopping, that’s bad debt.  You’ve already overpaid for that new shirt, and good luck selling it later at a rummage for more than a couple dollars, even if it’s designer.  Disposable items won’t build value.

Did you use your credit card to pay for your last vacation?  Bad debt.  I will be the first person to agree that everyone needs a vacation, maybe even a few, every year.  You’ll be hard-pressed, though, to convince your creditor that Hawaii was a necessary expense.  Perhaps once we’re all allowed 30 days of vacation instead of 7 or 14…

And unless you’re certain you won’t ever need your credit score again, be careful of paying off all of your debt.  No debt can actually be bad debt.  One woman I know had her high credit limit lowered because she never used it, so her score went down a bit.  Your score won’t be in danger of plummeting just because you’re debt-free, but lenders prefer to see some current activity as a way to gauge your money-management skills.  It’s similar to opening your first credit card.  You might start with a high score, but if there’s no activity to back it, lenders could still be wary of you.

But you probably have a decade or two (or three) before you pay off your house or student loan or business loan, so simply maintain you required payments and don’t go crazy spending money just because you have some extra room on your credit card.  You’ll keep your debt-to-income ratio at a good level  by not overextending yourself, and you’ll keep your debt on the good side.

Life is always better when you have fewer things to worry about, so you look for shortcuts when they’re available.  You take the shortest route to work, cook meals that take 30 minutes or less, text message instead of calling (and use “TXT” talk to make that even faster still).  You’re probably looking for ways to save money, as well.  Consolidating your bills can help you save both time and money, and maybe even lower your stress level, too.  Here are some ideas to help you get going:

• Have your paycheck direct deposited into your checking account.  It will save you a trip to your bank and you’ll have access to your money sooner.  You will still get a stub for your records showing the deposited amount, taxes taken out, etc.
• Go a step further and arrange to have a certain amount or percentage of your paycheck direct deposited into a savings account.  You won’t have to consciously think about saving money because you’ll automatically be paying yourself first, and if that money never passes through your hands, you won’t be tempted to spend it and probably won’t miss it.  Even a small amount can be helpful by time you need to access your savings.
• Sign up for online bill payment or even automatic payment.  If you opt for automatic, make sure you trust yourself to have available funds in the account you attach to your bill on the due date.  If you have a creditor that doesn’t offer you the option to pay online, most banks offer bill pay programs.  You simply enter your creditor’s information and your bank will send them a check.  With this option, you’ll want to allow yourself an extra couple days before the due date, as your bank’s check still needs to reach the creditor by mail.  In all cases, you’ll be saving yourself the time of writing out a check, as well as saving money on envelopes and postage.  You’ll be more likely to avoid late fees, too.
• Consider transferring high balances on your credit card to one with a lower interest rate (visit BankRate.com for best deals).  Some companies may even offer you a no-interest deal for a certain period of time.  I personally took this option because I knew that interest was the factor preventing me from paying down my balance as quickly as I could.  If you’re confident that you can pay off the debt within the time frame and refrain from adding extra charges to that card, this can be an option for you.
• If your immediate financial future is looking bleak, but you know that you can get yourself back on track with minimal help, try contacting your credit card companies or other lenders and asking if they have a financial hardship program.  If they do, you can potentially have your monthly payments and/or interest rate reduced for a short period of time.  They might even waive your monthly payments completely for a couple months.  (Be careful, though.  Those charges might be tacked onto your next set of due payments, so read the fine print.)  Your credit rating will mostly likely take a hit, but if you can get back on track right away, your score will improve right along with your financial situation.
• If you know you need more help to get out of debt, consider a debt consolidation service.  They essentially pay off your old debt for you and approve you for one large loan to cover the cost, leaving you with only one monthly payment.  The good news is that you could owe less overall than before, as these services are able to negotiate with your creditors to lower your payments.  The bad news is that all of those accounts will be closed, leaving you with no emergency credit cards, the interest rate on your new loan might be high, and your credit score will definitely drop.  However, if this is your only way out, you have a better chance of getting out of debt quicker and redeeming your credit score faster than if you opted to file bankruptcy or simply stopped paying your bills and got sent to collections.  Just beware of scammers that claim they can completely eliminate your debt right away (usually if you pay them a large sum of money) or secure a low interest rate for you.

You can keep track of your own finances with a budgeting program, as well.  Knowing exactly where your money is going can help you get a good idea of how much money you might be wasting.  Renegotiate as many debts as possible to save money.  Even simpler things like adjusting your cell phone bill can help.  (For example, do you text a lot?  Add a feature to cover x amount of texts for x amount of money to save, etc.)  Consolidating your finances in these ways will allow you extra time and money to enjoy the more exciting parts of life.