Learn the Pros and Cons of Starting a Data Entry Business
Many companies and organizations record and track vast amounts of information, creating a market for data entry businesses. Some companies do this work in-house, but others contract with outside firms. If you are an exceptional typist with an eye for detail, providing data entry services might be a great business idea for you.
What Data Entry Entails
Data entry involves inputting large volumes of information into databases or spreadsheets for the purpose of record-keeping or analysis. The work typically involves inputting data from forms or other means of collection into software programs such as Microsoft Access, Microsoft Excel, other common database or spreadsheet programs, industry-specific programs, or internally developed programs designed specifically for the data being collected.
Businesses and organizations from a variety of industries input data on a regular basis. Hospitals and other medical offices invest a lot in data entry to maintain patient records. Financial institutions, including banks and credit unions, also input a lot of data. Colleges and universities require data entry for student records and also to organize and analyze information collected during research. Independent research facilities require data entry for the same reason. Many other organizations, from retail businesses to government offices, collect data for many reasons.
A data entry business can be run from home with minimal startup costs. Even if you don't have the appropriate computer hardware or software at home, the cost of a computer and the necessary software is relatively low. Some of the other positives involved with starting a data entry business include:
- Large base of potential clients: Because so many industries need data entry services, there's a large pool of potential clients. Many of them also outsource the work because it often is cheaper to contract with an outsider provider than to hire full-time staff to do the work. This means you can build a base of local clients, especially if you have connections in the area.
- Crowdsourcing options: If finding local firms is difficult, there are many organizations and businesses that post projects on crowdsourcing sites. This can be a good way to stay busy and build a history of quality work for your data entry business.
- Specialization: If you have experience or connections in one particular industry, you can market yourself as someone who specializes in that particular field. For example, you might have years of experience working in medical offices or in investment offices, giving you insight and knowledge that can help you build a base of clients in those industries specifically.
Data entry can be tedious work, sitting at a computer for hours and repetitively typing information. It can put a strain on your eyes, hands, and wrists. If you can't handle this type of work or are unable to break up the monotony, this might not be the right business for you to start. Other potential negatives include:
- Low pay: Most jobs pay by volume, so you often have to do a lot of work to make a steady income. This is especially true on crowdsourcing sites. Local clients familiar with your work are more likely to pay more, but that work is more challenging to get.
- Offshore competition: Some firms will hire people from outside the U.S. to handle some jobs. They'll do this through crowdsourcing sites or through established relationships with foreign data entry operations. In terms of cost, it can be difficult to compete with these workers.
- Avoiding scams: There are a number of work-at-home scams associated with data entry work found online. Most reputable crowdsourcing sites vet the clients posting projects or provide some type of protection. It's still possible to be a victim of a scam online, however, when you don't know exactly who you're dealing with.