Livestock Network: For many people, working from home on the side or full time can be an attractive option, whether they’re trying to make a few extra bucks or start a new career.
However, starting a home-based business, like starting any other business, requires a large amount of planning and personal commitment.
You’ll have to plan out your strategy, work out all the little details.
And then put in the work to make it happen.
Luckily, by using your home as your business space, you avoid some of the costs and hassles associated with classic businesses.
Like renting commercial space and meeting certain permit requirements.
Deciding Your Type of Business
Evaluate your talents.
Keep in mind, there is a huge difference between talents and things you enjoy.
Just because you enjoy something does not mean you can turn it into a business.
Think about your skills or the hobbies that you do better than anyone else.
Your business can also be based on a professional skill you’ve developed or been educated in.
- Make sure that this is also something you enjoy doing.
- You’re going to be spending a lot of time setting up and running this business so you have to be able to tolerate doing it.
Assess your financing needs.
Know your competition.
If you plan on working from home locally, look around town for other businesses offering the same services or products.
You’ll have to figure out if there is enough business left for you in your area.
If you plan to work online, you’re dealing with a very crowded market in most cases.
So you’ll have to find a way to differentiate yourself from the competition.
- In either case, be sure to check around and analyze your competition’s pricing.
- If you can offer the same product for less, you may be able to draw some of their customers away.
Understand the needs of your market.
Learn about employment laws.
It’s best to hire legal counsel to make sure that you do not run afoul of these regulations.
Consider some of the more common ideas.
If no business ideas are coming to mind, think about some of the tried and true home business types.
Some highly lucrative home business ideas include tutoring.
Tax preparation, business coaching, counseling, marketing consulting, accounting.
Web designing, interior designing, dance instructing, newsletter service.
Proofreading service, and resume writing service.
These home-based business ideas just require your personal skills rather than large investments.
- Most of these business ideas can also be done online.
Consider the space required for your business.
Consider your space requirements and your home’s ability to meet those requirements before moving forward.
Select a name for your business that reflects what you do.
Finding the right name for your business is one of the most important variables to your success.
Consider avoiding an obscure and unique name for your new business that does not clearly describe your business and give customers a clue about the services and products provided.
First-time customers should be able to piece together a well-informed idea of what your business does base on its name.
- Check with competitors to make sure you’re not violating legal trademarks or choosing a name that is too similar to competitors in your region.
- Consider the length and spelling of the name for your business.
- A longer name might be difficult for many to remember.
- Using uncommon words might make quickly finding your info on Yahoo and Google impossible for some customers.
- Buy a domain name for your business as soon as possible.
- A domain is the web address and extension for your future website which includes .com, .net, or .org. Domain names are often sold with web hosting services.
- Availability for your business name is not guaranteed but can be found through domain registrar services.
- Consider filing for legal trademarks and copyrights to protect yourself from others stealing the name you’ve decided on for your business.
- Consider polling your friends on the best name for your business once you’ve narrowed the options down to a few ideas.
Planning Your Business
Figure out if you can make this business profitable.
How much will people pay for your services? Can you make a good income off this?
Many people see astronomical numbers in their future until they take the time to determine their profits.
Be sure to consider how much time you can reasonably commit to your business and how much profit you can get back for your time and investment money.
In some cases, a great business idea, in theory, can in reality be unprofitable.
Account for every cost associated with your business instead of just the upfront costs such as inventory and advertising.
Remember to calculate the easily overlooked overhead and expenses such as travel, legal fees, and accounting.
- A perfect example of this is if you make specialty cakes and, because of the extreme designs, sizes, and amazing flavors, people are willing to pay you $350 per cake.
- However, due to the work that goes into producing such amazing cakes.
- You are only able to make one every week which brings your profit to $1400 a month minus the cost of your supplies.
Create a business plan for your home-based business.
This is the blueprint for your business.
It may also help you think of things that had not crossed your mind about your business and help you determine what kind of start-up costs you are looking at.
At a minimum, a business plan should include the following:
- A description of your company’s market, goals, and what differentiates it from the competition.
- A list of your product or service offerings and their prices.
- Market analysis of your competitors and their prices.
- Marketing plans. How do you plan to get the word out about your business?
Check into legal barriers for your business.
Some areas have certain rules and regulations for home-based businesses.
And you need to check into those at your town’s city hall before investing much time or money in your business.
Some areas just make home-based business owners carry a business license and nothing else.
Not knowing about these regulations can be devastating to your business.
- You should also consider homeowners’ associations in your neighborhood and consider the potential impact of your business on neighbours, especially if the business will increase traffic or noise in the neighborhood.
Figure out if you need additional insurance.
Opening for Business
Invest in your home-based business.
Organize your business as a legal entity.
When setting up for business you have several options in determining the structure of your business. The easiest is to simply act as a sole proprietorship where you, the business owner, are legally the business. In this case, you would use your SSN for tax identification purposes. However, if you plan to have partners or hire employees, you will need to organize your business as a separate entity like a corporation. Doing so will require you to incorporate your business with your state and obtain an employer identification number (EIN) from the IRS.
- Corporations also limit your liability for any losses sustained by the business.
Set up your home office.
To work effectively, you’ll need to have a dedicated business space within your home. If you work locally, this is also your commercial space.
You’ll need to create an area separate from family members, pets, and other distractions.
If possible, separate this area as much as possible from the rest of your home.
The physical separation will help create mental separation between your home life and work life and also make the tax deduction for a home-based office less subjective.
- Be sure that this office and your working from home don’t disrupt your family life or bring new stress into your home.
Set up a dedicated phone line and internet service.
Almost all businesses will require contact with customers over the phone.
In order to ensure that your line will be free when customers call, you’ll have to get a dedicated phone line for business use.
You should also sign up for voicemail rather than using an answering machine.
This sounds more professional to customers.
You should also add an internet connection that is fast enough for your business purposes while still remaining affordable.
- For example, if you are streaming video as part of your business, you are justified in buying faster internet. However, if you are mainly using the internet for browsing and email, there is no reason for you to get a higher speed internet package.
Get a post office box for your business.
This is especially important if you have business cards or will be regularly corresponding through the mail.
The simple fact of the matter is that PO boxes look more professional than using your home address.
Launch your business.
When you have everything ready, launch your business or website and take your first customers. These can be friends or family to start with.
Keep in mind, you will not know everything about your business from the start.
Entrepreneurs learn as they go!
- If your first customers are friends or family, be sure to get their feedback and adjust your products or processes accordingly.
Market your business.
To bring in more customers, you’ll have to market your business.
This includes advertising, establishing a strong social media presence, and other activities designed to draw in customers.
Your type of advertising should vary based on the type of customer you are trying to attract.
If you’re working locally, advertise on local radio stations or in the newspaper.
If you work online, sign up for Google AdWords or advertise your business on relevant websites.
- Marketing a business can also include building a brand, setting up a professional website, driving traffic to your site with search engine optimization, and using a promotional strategy, among other tactics.
- One of the most important keys to marketing is clearly communicating what the service, value, or product that your new business provides is. Try to keep away from long descriptions and lengthy explanations when sharing what your business does with others. Keep your message very simple, direct, and to the point. Tell the customer what problems you can solve, services you will provide and how your products bring great value to their lives without adding too much jargon that would confuse your would-be customers.
- Digital Marketing and creating an online presence are necessary for every business. Billions of internet searches are completed every day on major internet search engines such as Yahoo and Google. Buying a .com and setting up a website with an easy service such as WebHosting Squared can cost less than $100 per year and takes you one step closer to finding more customers online. After you have created a website and ranked on google, Consider creating social media pages on Facebook and Twitter to communicate with potential customers and spread the word across your community.
- Social Media makes it easier for you to collect reviews, talk to customers, and advertise for free.
Adjust strategies and products as necessary.
Respond to your customers. You should set up a system or survey where your customers can rate their experience with you and your business.
Be sure to strive for perfect ratings. Any criticisms you see consistently mean that you should change that aspect of your business.
Build a trusting customer base.
By adjusting to your customers’ needs and consistently providing good services or products, you get the best form of free advertising: word-of-mouth recommendations.
Your customers will recommend you to their friends if they are truly satisfied with your work, and your business will grow accordingly.
You’ll have got some customers coming back for repeat service and build up a consistent revenue pipeline.
When you start thinking about starting a home-based business, write down all the things you think you can do with your skills and talents then narrow it down to what you truly want to do.
Keep your regular job until you are able to make the same amount of money or more consistently. Many people who have a home-based business give up their regular job when they have saved a year’s income.
There are many scams out there that will promise you tons of money and financial stability from home.
Do not fall for these ploys. The best home-based business is the one you start with your own mind, heart, and hands.
Be sure to set a daily budget for AdWords, keep your spending within a budget. If you don’t, you will regret it.
Most home-based businesses do not succeed. That is just the truth of the matter.
There are a few new home-based businesses every year that are really successful, however. All you can do is work hard and try your best.