• Incorrect budget placement and management. This is probably one of the biggest mistakes small home business owners will make and because of it will fail. Can you imagine what your life would be like if you managed your money poorly or didn't budget for certain things each month? A home business is no different. A comprehensive analysis of your business is crucial if you want to succeed. Your business budget should be managed professionally so that money is used properly resources and assets are used appropriately.
• Insufficient market research. Many small businesses (and large ones as well) go into business without enough research on whether or not their product or service is needed. If there is no need for your business then it will fail quickly. Before you every start any type of business you need to do a thorough market evaluation of the market.
• Poor time management. Yes one of the biggest advantages of working from home is that you are your own boss, you set your own hours, and you don't have to answer to anyone. The downside however is exactly the same thing. Some people are great at managing their time and disciplining themselves into working. Owning a home business presents a familiar dilemma when it comes to managing your work time against your family time, TV time, and other well known distractions. Everyone will demand time from you so in order to avoid such a disaster it's important to set a regular work schedule with regular working hours. Poor time management can kill your business.
• Separating work from home. We have talked a little about this in time management; separating work from home can be one of the pitfalls of home business if you don't do it. In order to really do the work at home you have to draw the line between work and home. Family members need to respect and understand your work hours and let you work during those times free of distractions. If you're home with just you and the kids then find someone to watch them so you can do your job.
• Poor or insufficient marketing and advertising. It's interesting to see that when small businesses start to struggle they pull a lot of their advertising and marketing. You have to understand that as a home business owner, advertising and marketing is all you have to get the word out. If you don't do enough of it or completely do away with it you will kill your business. If you aren't good at advertising then ask around for help from family or friends. If you can afford it you might want to spend the extra money and pay a professional to help you do it.

Owning a home business can be exciting and fun; however it's important to be aware of the pitfalls of home business so you can learn how to avoid them.