10 Easy Steps To Starting Your Home-Based Business
Starting your home based business can be one of the best ways to start your own business. A lot of very successful business that are now household names got started as a home-based business. Like, Dell computers, Facebook, Apple computers and most software companies got a start at a home of the founder.
There are some specific steps you should take to give yourself the greatest chance of success. One of the best ways to give yourself the best chance of success is to find someone that has is where you want to be and find out how they got there.
the 10 steps to starting your business from home
- Decide on a successful business idea
- Come up with a name for your business
- Create minimum viable product for your product
- Create business plan
- Determine your business structure
- Register your home based business
- Obtain any licensure and requirements
- Create separate financial accounts for your business
- Obtain business insurance
- Start setting up your software stack
How to start home based business
Starting a home-based business can be a great way to control your own work/life balance and earn a good income. But it’s not always easy to get started, and there are a few things you should keep in mind if you’re thinking of starting your own home-based business.
First, make sure you have the time and commitment to devote to your business. A home-based business is a big responsibility, and you’ll need to be able to dedicate the necessary time and effort to make it successful.
Second, choose a business that you’re passionate about. Not only will this make the process of starting up more enjoyable, but you’re more likely to stick with it in the long run if you’re doing something you love.
Third, do your research. There’s a lot to think about when starting a business, from financing and marketing to legalities and insurance. Make sure you know what you’re getting into before taking the plunge.
Fourth, put together a solid business plan. This will help you map out your goals and how you plan on achieving them. Knowing what you want to achieve and how you’re going to get there is essential for any successful business venture.
Finally, don’t be afraid to ask for help on how to start a home based business. Whether it’s hiring an accountant or taking a small business course, there’s no shame in seeking out professional help when starting your own home-based business. Getting expert advice can make all the difference in ensuring your new business gets off on the right foot.
The 10 Steps to starting your home based business
1. Decide on a successful Idea for your business
It all starts with an idea of the business that want to start. There are a lot of options out there for home based businesses and almost all of them can be started on a budget in your home.
25 Home Based Business Ideas
- Monetize a blog
- Drop shipping
- FBA (fulfillment by amazon) business
- Affiliate website
- Social Media Management
- PPC management
- Graphic Design Services
- Print on Demand Services
- Travel Planning
- Event Planner
- Personal Trainer
- Yoga Studio
- Hair Solon
- Car repair
- small engine repair
- Career Coaching
- IT Consulting
- Web Design
- Software development
- Pet Care
- Day Care
- Social Media Influencer
- Video Editor
2. Come up with name for your business
Naming a business is both an art and a science. While there are many factors to consider, the most important thing is to choose a name that accurately reflects the mission and values of your company.
How to pick a business name –
For example, if you are starting a food business, you might want to choose a name that evokes the feeling of freshness and wholesomeness. On the other hand, if you are starting a technology company, you might want to choose a name that sounds innovative and modern.
Ultimately, the goal is to choose a name that will attract attention and give potential customers a positive impression of your business.
You want to make sure that the name you use and start marketing is not taken and you can find a domain name that will work for a website.
With careful consideration, you can find a name that perfectly encapsulates the essence of your company.
If you are still struggling with a business name you can always use a business name generator like shopify’s free tool
3. Create a MVP (minimum viable product) of your product or service
The purpose of this is to determine if your product or service has potential and if you can find customers for it.
Before launching a new product, it is essential to conduct extensive market research. This will help to determine whether there is a demand for the product and what features consumers are looking for. Once this has been established, the next step is to create a minimum viable product (MVP).
This is a version of the product that has just enough features to be marketable, allowing businesses to gather feedback from consumers and make necessary improvements. The MVP should not be too complex or expensive to produce, as this could delay or prevent it from ever reaching the market. With careful planning and execution, an MVP can help businesses to assess the potential of a new product and make any necessary adjustments before making a larger investment.
Too many businesses get caught up in a lot of the other details of starting a home-based business without ever determining if anyone is going to purchase their product or service.
4. Create a business plan
A business plan is an important tool for any entrepreneur or small business owner. It helps you to define your business goals, and map out a path to achieving them. It also forces you to look at your competition, and your target market to determine your marketing strategy.
A well-crafted business plan can also help you to secure funding from investors or lenders.
In short, a business plan is essential for anyone who wants to start a business. Without one, it will be difficult to make your business successful.
Here is what the SBA says:
Here is what a good business plan should include –
- Executive summary
- Company description
- Your business goals
- Organization and management
- A description of your product and services
- Market research
- Outline of your marketing and sales plans
- Financial projection analysis
5. Determine your business structure
When starting a business, one of the decisions you will need to make is what type of business entity to establish. There are several different types of business structures, each with its own advantages and disadvantages.
The most common types of business entities are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Which type of entity is right for your business will depend on a number of factors, including the size and scope of your business, your personal financial situation, and your current tax obligations.
Sole proprietorships are the most common type of business entity in the United States. They are relatively easy and inexpensive to set up and maintain, and they offer complete control to the owner. However, sole proprietorships also have some drawbacks. One downside is that the owner is personally liable for all debts and obligations of the business. This means that if the business fails, the owner’s personal assets could be at risk. In addition, sole proprietorships can be more difficult to raise capital for than other types of businesses.
Partnerships or a S Corp are similar to sole proprietorships in that they are relatively easy to set up and offer complete control to the owners. In a partnership, two or more people share ownership of the business. This can provide some important benefits, such as pooled resources and knowledge, but it also comes with some risks.
Partners could have disagreements about the direction of the business, which could lead to tension or even dissolution of the partnership. In addition, partners are jointly liable for all debts and obligations of the partnership. This means that if one partner mismanages funds or makes poor decisions, the other partners could be held responsible.
Limited liability companies (LLCs) combine features of both sole proprietorships and partnerships. Unlike sole proprietorships, a limited liability company offer personal liability protection to their owners; and like partnerships, LLCs allow for multiple owners. LLCs also have some tax advantages over other types of businesses. For example, income from an LLC can be “passed through” to its owners, which means that it is taxed at the owner’s individual tax rate rather than at corporate tax rates.
LLCs can also choose how they want to be taxed; For example, some LLCs elect to be taxed as S corporations while others elect to be taxed as C corporations. The right tax status for your LLC will depend on a number factors including the size and structure of your company and your personal tax situation.
Corporations are separate legal entities from their owners ( shareholders). This means that shareholders are not personally liable for debts or obligations of the corporation. One of the downside to this type structure is that it can be more expensive and complex to set up than other types of businesses.
When deciding on a business structure you should always consult with an accountant or attorney so you can explain your situation. They than can tell you the best way to structure your business.
5. Register your home-bases Business
Every business should be registered if you are going to be generating income from it. There are generally 3 different government levels you need to register with
This is what the SBA admin says:
- You need to register at the federal level if you are creating a corporation
- Register for a EIN number for employees
- State tax id
- If you need to register sales tax within the state
- If you are register as any type of corporation
- Need a permit or license from your city or county
- Local sales tax
- Most local ordinances have a law requiring your to register your business if you going to be generating specific amount of income.
7. Obtain any licensure and permits requirements
Some business are going to require a business license and permits, and in order to operate the business, you will need to obtain a business licenses and permits from the government. The process of obtaining a business license can vary depending on the country, state, and city in which you are located. However, there are some general steps that you will need to follow.
1. You will need to determine the type of business license that you need. There are different licenses and permits for different types of businesses, so it is important to make sure that you get the right one.
2. Fill out an application. The application will ask for basic information about your business, such as the name and address of the business. You will also need to provide proof that your business is legitimate and that you have the proper insurance in place. Once your application has been approved, you will be issued a business license.
Depending on your location, you may need to renew your license on a yearly basis.
8. Create separate Financial accounts for your business
When you start a home-based business, it’s important to create separate financial accounts. This will help you keep track of your business expenses and income, as well as ensure that you are paying the appropriate taxes.
Business Bank Account
As soon as you start accepting money for your services you should open a business banking account.
Common business account include a checking account, savings account and a merchant services account which allows you to accept credit and debit cards.
Some of the benefits of having a business banking account are
- Personal liability protection by keeping your personal funds separate from your business funds
- Creates a perception of professionalism. Your customers and clients are able to write check directly our to your business instead of you personally
When selecting a business bank account, be sure to compare fees and services to find one that best suits your needs. Once you have opened your account, be sure to deposit all of your business income into this account and pay all of your business expenses from this account.
Business Credit Card
You should have a separate credit card for you business. A business credit card can be a valuable tool for any small business owner. Not only does it provide a way to track expenses, but it can also help build business credit. This can be important when it comes time to apply for loans or other financing. In addition, many business credit cards offer rewards such as cash back or travel points. This can be a great way to save money on business expenses.
9. Obtain Business Insurance
If you’re running a home-based business, you might not think you need business insurance. After all, your home insurance policy should cover any damage to your home or personal belongings, right? Wrong. Home insurance policies typically exclude coverage for business-related activities. That’s why it’s important to have a separate business insurance policy in place to protect your home-based business.
Business insurance can help cover the cost of property damage, liability claims, and lost income if your business is forced to close due to an accident or natural disaster. It can also provide peace of mind knowing that you and your business are protected in the event of an unexpected setback.
10. Start setting up your business software stack
Every business needs software to run in this day and age. The right software will make you more money and if optimized correctly will help you run your business better.
When it comes to software, there are a few basics that every home based business needs in order to function effectively. First and foremost, you’ll need a word processing program like Microsoft Word or Google Docs in order to create documents such as proposals, invoices, and marketing materials.
You’ll also need some form of accounting software in order to keep track of your income and expenses. FreshBooks is a popular option for small businesses, but there are many others to choose from as well.
Some software that home based business needs are:
- Accounting software
- Invoicing software
- Inventory software
- phone software
- Meeting software
- payroll software
With these software programs in place, you’ll be well on your way to running a successful home based business.
What are the benefits of starting a home based business?
For many people, the appeal of a home-based business is the ability to be their own boss and set their own hours. However, there are also a number of other potential benefits, including lower overhead costs, greater flexibility, and increased convenience. In addition, working from home can provide a much-needed sense of structure and routine for stay-at-home parents or retirees.
There are also tax advantages of a home based business. Home-based businesses have many tax advantages over traditional businesses. For one, you can deduct a portion of your mortgage or rent as business expenses.
You can also sometimes also deduct the cost of utilities, such as electricity and internet service. In addition, you can take advantage of the home office deduction, which allows you to deduct a portion of your home expenses, such as repairs and maintenance. Finally, you can often avoid paying self-employment tax on your business income.
You should always talk to a certified public accountant before you employ any of these tax saving to be sure you are filing the right paperwork and safe from any audits.
what are the Pro and cons to starting a home based business?
While there are many pros to starting a home based business there are also some cons.
- No commute
- You get to be your own boss
- You family life will be better balanced
- You can enjoy some tax breaks and write-offs
- You have the opportunity to make more money
- More control over your schedule
- Lower overhead
- Live wherever you want
- There could be more distractions from family members
- No guaranteed income
- You may have to purchase private insurance
- It can be lonely
- Blurring of the lines between work and family
Frequently asked questions about home based business
What kind of company can I start from home?
The best companies to start at home are:
- Freelance writing
- Software code writing
- Social media services
- Service based business
- Graphic design
- website design
- Virtual assistant
- Service based business
Which business is most profitable at home?
The most profitable business at home are:
- Drop shipping
- Content website
- SaaS businesses
- Service based businesses
- Online stores
How can I start a small home business with little money?
Starting a small home business doesn’t have to be expensive. In fact, there are several ways to get started with very little money. One option is to sell products or services online. There are a number of platforms that allow you to set up an online store with little to no upfront cost.
Another option is to start a blog or website and generate income through advertising or affiliate marketing. If you have a particular skill or talent, you could also start offering your services as a freelancer. The key is to choose an option that best suits your skills and interests.
With a bit of creativity and hard work, you can start a successful small home business on a shoestring budget.
Can you run small business from home?
Yes, you can run a small business from your home. There are a number of advantages to running a small business from home. For one thing, it can be very cost-effective, since you won’t have to worry about office rental costs or other overhead expenses. Additionally, it can be much easier to manage your time and schedule when you’re working from home. And finally, you’ll have the freedom to create your own work environment that suits your needs and preferences.
How can a beginner start a business?
Starting a business can be a daunting task, but with careful planning and a bit of hard work, it is possible to get your business off the ground. The first step is to come up with a business idea. This can be something as simple as starting a blog or an online store. Once you have an idea, you need to do some market research to see if there is a demand for your product or service.
After you have determined that there is a market for your idea, you need to start putting together a business plan. This should include a detailed description of your business, your target market, and your marketing and financial goals. Once you have a business plan in place, you need to start raising money to fund your venture. This can be done through investing your own savings, taking out loans, or seeking out investors.
With careful planning and execution, it is possible to start a successful business from scratch.