Having a home-based business can provide a rewarding and flexible lifestyle. In fact it sounds ideal - no daily commute, no annoying coworkers, no rat mazes of cubicles, and you can eat lunch for as long as you like. You can even take an afternoon nap!

Unfortuntely two opposing concepts are constantly working together to shatter this lovely idealistic outlook:

1) There’s always more work that can be done on the business today.

On the one hand you are in danger of working yourself too hard, putting in 14 hour days to get the business up and running. You put yourself in danger of burning out, your stress levels will go through the roof, and the quality of your output will suffer. I’ve been there before myself, working like crazy on CustomBar while also giving it all running a web hosting business. Eventually stress literally made me sick.

2) You have the freedom to put off work until it never gets done.

On the other hand with so much flexibility in time it’s very easy to become the ultimate procrastinator. Those lunch hours never get made up, sleeping in makes dinner time come all too quickly, and who can work after dinner with TV shows and going out? Sure things are still getting done, but can your business really survive when you’re putting in 4 hours of interrupted work into it?

Striking that balance between living and working at home is something that will take time to learn. My own experience working from home has taught me a lot about how to make this challenging environment productive and and perhaps this experience can help you get started too. The following is a set of principles I’ve found are needed to get things done effectively, and some insight into achieving them.

Principle #1 - Work When Others Aren’t Playing

Unless you live alone you are affected by those that live with you. You’ll chat with them, eat with them, or head out somewhere. A little bit of socializing quickly kills hours of work, and every interruption means 15 minutes to refocus on work and get back into a state of productivity. Other aspects of life will interrupt too such as appointments, shopping, meeting with clients, going to the bank, etc. Errands are notorious time killers.

After much experimentation and refusal to accept the idea of early birds being anything but completely insane, I have finally realized that waking up at 5 in the morning really does work. After a quick shower and brewing up a pot of coffee I am up and at it. The first 10 minutes of waking-up are tough, so having a shower helps me avoid work just long enough to let my mind truly get up with the rest of me. I get 3 hours of work done every morning and a wonderful breakfast before the corporate world has even checked its e-mail. If I’m working on a venture full-time then I can be done my working day by 3 or 4 in the afternoon, just in time for a great dinner and an evening of not worrying about work.

Sidenote: At one point in time I was a night owl going to bed at 4 in the morning and waking up at noon. This was completely desynchronized from society and meant that if I needed to go anywhere I had to do this before I ever got started on my work. Hours would tick by quickly, and still wanting to enjoy a social life and be involved in the world I would often leave crucial work to be done in the late hours of the night when the world finally slept. By then I would be tired too, and burnt out from partial attempts to work all day.

Principle #2 - Create a Separate and Practical Work Environment

It may be tough to accept this fact, but your work environment has a tremendous impact on how effective you are in your work. You need a space free from distractions which is yours to work in whenever you desire. This is often challenging as very few people actually have a spare room for an office. Don’t let this stop you. Over time I’ve had great success using my bedroom as my office, and I’ve found that simply devoting my desk to this purpose was sufficient. My desk is now clearly a work environment with the appropriate office supplies, a high quality LCD monitor, and two filing cabinets right behind me for easy filing.

The atmosphere of your environment is very important too. Having an office-oriented environment doesn’t mean having to adopt the grey corporate feel. I’ve found IKEA furniture to be great for building a workspace that has warmth to it and doesn’t cost a fortune. You’ll probably want easily accessible music too, and of course as much freedom from outside noise as possible (a combination of tuning your environment and your schedule).

Steve Pavlina has a great article that further elaborates on putting together a constructive workspace.

Principle #3 - Incorporate Effective Time Management Techniques

Ultimately you need to be able to put the time you have gained to good use. This means tackling some major productivity issues that haunt us all, such as procrastination, poor prioritization of tasks, and ineffective work technique. This is a life-long learning process, but you can make major leaps immediately just by introducing yourself to basic concepts in the field.

Make sure that you don’t waste your prime blocks of time with short-term simple tasks like answering e-mail, which can just as easily be done when you are at the end of your day or when you have 15 minutes free here and there. Your best time and your best energy should be devoted to the tasks that will give you the highest long-term results. This is another argument for waking up at 5 in the morning - you are fresh and hopefully have no other obligations that early in the day. You are thus putting your absolute best self into your absolute best work. It’s shocking how most people, particularly in the corporate world, completely waste their most productive energies.

I’ve already mentioned that it takes 15 minutes to get back into a focused state, so you can save yourself hours a day just by turning off instant messaging, Outlook, and not checking threads on forums. If you don’t need the internet you can literally unplug that too, and definitely ignore non-business calls (caller-id or separate phone line are instrumental here). Staying focused is a mission-critical task.

Getting Things Done by David Allen should receive some sort of honory medal as the book I write about most frequently. I mention it so often because Allen’s philosophy on time management has helped me a lot. It teaches not only a system for Getting Things Done, but also the theory behind it that has allowed me to mold it to my own specific needs and work habits. If you’re looking to learn a little on how to manage your time effectively and to be able to make use of random periods of free time instinctively then this is a great resource.

As anyone who has played a Sim or Tycoon game should know, paying attention to metrics is key for building a successful city, theme park, island, lemonade stand, etc. Yet in real life, where key numbers aren’t already identified and neatly summarized, it’s very easy to forget the importance of looking at the numbers.

Metrics tie closely back to the idea of goal setting, and how you will inevitably end up where you steer yourself to go. In order to have goals for your business, career, website, or even bake sale you need to be able to establish a way of measuring your progress first. You need to do this at every “height” of your plan, from the high level bird’s eye view to your day to day progress.

The most basic step is establishing your long-term objectives such as $2 000 000 in revenue in 5 years, 560 000 unique visitors in 3 years, or raising $2000 for the class trip. Surprisingly many people don’t even establish these numbers. I have no idea where they are going and neither do they, but it’s understandably easy to get in such a position when there’s so many other things to do. When in that situation step back and ask yourself, “what is it that I’m actually moving towards by doing these tasks?”

Once you have your long term objectives it’s time to split them up into manageable chunks. You have to figure out how it is that you are actually going to get there. What level of sales do you need to attain $2 million in revenue for your business? How many new customers do you have to aquire every month to meet this figure? How is your existing marketing performing in relation to this? What kinds of things can you try to improve it? What metrics do you need to measure to know whether your marketing has improved? How will you obtain these measurements?

As you split up your goals from the long-term to what happens now you must identify the key components responsible for attaining your goals, and you must have metrics to measure their success quickly and often. Every component then becomes a smaller project with its own goal - such as increasing magazine ad response by 140%. With the numbers providing an honest assessment of where you stand in relation to where you need to be something incredible happens. You know immediately where you need to be concentrating your efforts and as you work to improve the components of your projects you have feedback on how it’s affecting performance. Step-by-step the numbers grow on smaller changes, and in the background the power of addition is bringing you closer to your goals.

Let’s take my blog as an example. I began it as an experiment to see how well I could do in this realm, after seeing so many other bloggers succeed by writing honest high quality content and taking advantage of online revenue models. Before installing WordPress I had a clear vision in my head of what I wanted to write about and what kind of readership and revenue I aim to achieve. Inspired by Steve Pavlina’s amazing path, I decided that I want to give myself a year to directly earn a minimum of $2000 every month from this site (this would exclude side-benefits like this blog driving new customers to my other ventures). To do this I need to focus on obtaining a high readership rate and a high return on advertising, Amazon referals (I don’t lump this in with advertising as I only use this program when I’m already recommending a product independently of desiring monetary gain), or other revenue models that I may implement in the future such as a donation link.

In my desire to achieve the above, and to learn a whole lot along the way, I am keeping a very close watch on two sets of metrics that I know are absolutley key to achieving my goal. The first is my traffic statistics, where my ultimate goal is to increase the amount of unique visitors that I get very month. By being able to measure this bit of info I know how quickly my readership is growing. I also look at where my readers are coming from and how various articles perform. Having this information I can then take a look at the different numbers that the revenue programs I participate in provide. I can track the average revenue per thousand visitors and see how different ad placements are performing. With all these metrics I am able to experiment with new ideas and measure the results.

The result is an incremental and measurable path towards my ultimate goal and the simultaenous improvement of my reader count and what I receive for every reader. If I had taken the approach of just randomly doing things that I heard would improve my traffic or revenue I would be missing out on both readers and revenue - probably in the realm of a several hundred percent difference!

This kind of methodology can be applied to any project, but you must actually identify and look at the numbers involved. Doing so brings math to your side and allows you to pursue growth naturally.

Being reasonably young, my history has been a mix of entrepreneurship, corporate jobs, contract work, and formal education. I’ve done each of these full-time at one point, but more often it’s been a balancing act between multiple big commitments.

People tend to be surprised whenever they learn of my multiple roles, as the traditional view is that university or a full-time job both require devoted attention and that it’s not possible to fit much else between them. Contract work is a little more forgiving since to an extent you choose your workload, and unfortunately people commonly view someone starting a business as not having a real job at all. Nevertheless all four are actually major commitments, but they don’t have to be tackled in isolation.

The worst leak of perfectly good time occurs through procrastination. We don’t like to get started on something when we don’t have to, even if the task itself isn’t all that bad. It’s a habit that tends to be developed in school and the resulting engraved mentality is that “work needs to be put off as long as possible so that play can occur”. A corollary of this mindset is “work is bad and should be avoided” (or perhaps this statement comes first). Tackling procrastination in your life will literally buy you more time. More than you’ll sometimes know what to do with!

This isn’t the first time that you’ve heard of procrastination being a terrific waste of time. How on earth do you overcome it though? Unfortunately saying “stop procrastinating” is about as effective as recommending exercise, a good diet, and getting 8 hours of sleep for a healthy lifestyle. Human beings tend to have a natural resistance to willingly picking-up these habits. There’s a good parallel to the way we behave in the physics of motion and friction. First we have momentum - an object that stays still tends to stay still, and an object that is moving tends to keep moving. Thus once you get yourself moving it’s much easier to keep moving. There’s more though! An object that is at a standstill encounters greater resistance from friction than when it’s already moving (I believe the terms are static and kinetic friction). Once moving friction is still encountered however, and without enough force exerted to keep the object moving it will eventually stop.

I think this explains the general course of taking up good habits pretty well. Some people never get past that initial movement by putting off starting until “tomorrow”. Others get started with fantastic intentions but the little pressures and requirements of life start getting in the way bit by bit. This kinetic friction slows the progress of the exercise/diet/basket weaving until eventually the habit stops. Procrastination plays a major role in creating kinetic friction by sucking up just enough time to convienently make it impossible to continue with the new habit. Inevitably the resulting complaint is “I just didn’t have enough time”.

There are numerous suggested methods for training yourself out of procrastination. Different techniques will work for different people, but here’s one that should work for anyone without commitment issues. It may seem like cheating because it’s simple and isn’t strictly a matter of internal discipline.

Take on Activities to Forcefully Fill Up Your Time

Internal motivation can be a difficult and fuzzy concept. A firm appointment or deadline with someone else expecting you to live up to it is on the other hand a fantastic way of making sure you’re done when you need to be. Of course that will only make you do the task at the last possible moment that you have to, but what if you have enough tasks that there is always something to work on? What if you can’t afford to space out for an hour or watch TV? Suddenly your mind means business and stuff gets done fast.

I’ve had a particularly busy schedule for the past two years, and the results have been very interesting. Not only have I been getting things done through the sheer force of having to do so, but overtime I’ve naturally grown to appreciate time. My instinct to procrastinate is far weaker than before and as I internalize the idea of getting things done instead of procrastinating I am quite capable of making use of my time effectively without the external forces present. This is a key achievement for me in relation to running my own business, as there is rarely anyone outside of the government that forces me to do anything at all in that area.

To make anything work, even a method as simple as this you have to start today. If your schedule prevents you from doing so right away (and getting coffee or watching TV don’t count as an appointment), then make sure you pencil in this action sometime today.

Important Sanity Considerations

Before you start signing-up for stuff, we need to do some final reality checking. Let’s take my life as an example. I am currently one quarter of the way through a 4 month full-time job contract (my last one ever). I also devote 25-35 hours a week to my website development business and another 6-10 hours to this blog (an addictive and time consuming success). Despite this I have a minimum of 2 hours each night to relax and cook a proper meal. I’m done working by 5 on weekends and spend most of Saturday morning running errands.

That sounds really nice on paper and frankly I’ve managed to make my life work almost as nicely as the above paragraph describes. However I’ve also been actively working on my time management skills for years and I’ve still got a lifetime of improvement ahead of me. Consider the following to help you succeed:

1) You Have to Take Breaks - Make Them Meaningful and Real

It’s impossible to work at your best when your constantly working. Having a coffee break is alright, but what’s really important is taking time at the end of the day to stop and relax. Ideally you should have defined times when you are working, and when you are not. It’s easy to make the mistake of taking a half-break, such as grabbing a snack and then eating it while you continue to work, answering work e-mail in the evening, or even thinking about work when you supposedly resting. The idea is to allow your mind a complete and total rest. No e-mail, no phone calls, no getting that last little thing done. You’ll be surprised at how much more restful this is, and ultimately how much time you actually save by not trying to be productive while supposedly at rest.

2) Organization and Efficiency Won’t Magically Happen

Realistically you’ll find yourself feeling like you’re in a tornado whirlwind once you realize how quickly those commitments are shooting at you. You’ll also find that while you’re now spending more time actually working, your work habits aren’t necessarily more efficient. Proper time management and working effectively are detailed disciplines in themselves that need to be aquired over time. They are absolutely key for getting more done without working yourself like a horse.

A book that helped me make leaps and bounds in this area, and which takes an incredibly sane approach to time management is Getting Things Done by David Allen. Allen’s approach is great because he spends a great deal of time on actual method instead of simply preaching why you should have a todo list (oh and he also explains why traditional todo lists won’t work).

3) Get Started Today

Finally get started today. It’s as true as night and day, if you put it off until tomorrow it’s simply not going to happen. Best of luck!