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How do you earn profits out of a home based business? The first thing to keep in mind is you actually need to start with yourself - not that business opportunity you saw in a commercial, or that your best friend is attempting to get you to join. If you want to know the secret to a successful business from home, please read on - these five steps will help you decide what sort of business is likely to work best for you.

1. What exactly are you Good At?

Your talents should be the base for any home business venture you begin. Maybe you are an artistic person, or creative with words. Perhaps you've a gift for selling, or communicating, or spotting creative solutions to problems. Note down the things that you are good at, and put little things that you may not think are important - they may turn out to be later!

2. What Skills Do You Possess?

If you want to make profits out of a home based business, it is easiest to start with business that needs skills you already have. Skills are different than talents - skills are the things you can do, like using certain software or drawing. Talents are things you are born being able to do, but skills are the things that you've learned to do, or perfected, over time.

3. Talents = Skills = Business Ideas

Take a look at your list of talents, and your list of skills. Now, what kind of business could you start with those talents and skills? For example, if you're creative and artistic, and you are skilled at Photoshop or other programs, you may need to start a web design service. If you are talented with details and have strong organizational skills, then perhaps you'd make an excellent freelance bookkeeper or virtual assistant. Don't throw out any ideas at this stage, and don't censor yourself - what ever you come up with, even if it sounds ridiculous, jot it down.

4. Test Your Ideas

Obviously, not all ideas will work for a home based business. You won't be able to have a lot of clients over, or store a lot of products, for instance. If you want to work from home, then some business ideas that require you to go and work on site may not be suited for you. Pass off anything that does not pass the 'can do it at home' test.

5. Profit Potential

If you wish to get profits out of a home based business, you need to examine the profit potential of your ideas. Basically, you have to be doing something that people are willing to pay for! Find out how much people are wanting to pay for your product or service (in general), and then assess whether or not you can make sufficient income from that. You want to be able to do a lot more than only pay the bills, you want profit - that's money over and above what you need to live on. Decide how much you require to live on, and how much more than that you are happy with making, at least at first.

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