Working from home is becoming increasingly in demand – partially fuelled by the COVID-19 pandemic. But landing a remote job is not the only way to work from home. Another option is starting your own home-based business.
Running a business from home has many perks, such as saving you time and money you would otherwise use on your commute. However, you have to do it right, which is no easy fete. Here are a few tips on how you can successfully start a home-based business.
- Think Your Business Idea Through
No matter how brilliant your execution plan is, your business will only stay afloat if your business idea is perfect. You must research thoroughly to see if your business idea can run from home. It’s important to note that while a home-based business sounds good in theory, some businesses need much more space than you can afford at home.
Starting a business revolving around your skills or talents is also essential. If you love baking, you can start a small pastry business. But do your due diligence to see whether your business idea will break even. You might consider testing your business idea before rolling it out full throttle to see if it’s worth investing in.
- Prepare a Business Plan
After making up your mind about the business idea, it’s time to roll up the sleeves and start the heavy lifting. Part of that is drafting a business plan – it acts like a navigation tool for your business. With a good business plan, your business will have structure.
For instance, as you draw the business plan, you can decide things like having a small business phone system to streamline operations. These phone systems have advanced features, like a virtual receptionist, which help you get ahead. Besides, a business plan comes in handy should you need funding.
- Choose a Brand Name Wisely
Your business name speaks volumes to potential clients before interacting with your products. Therefore, you want a name that stands out but is not too difficult for the audience. For starters, you need a business name that is easy to spell. That makes it easy for potential customers to key in on their browsers.
However, you need to check to see that no one else is already using the name. But as much as your client’s needs come first, choosing a name that means something to you is crucial. If you are overwhelmed, you can always seek suggestions from family and friends.
Once you’ve chosen a company name, file a trademark to have exclusive rights to use your brand and to prevent competitors from copying or stealing your brand assets.
- Decide the Business Entity
The business legal structure you choose will determine the legal structure of your business. Options include a sole proprietorship, general partnership, and a limited liability corporation. Each of them has advantages and a fair share of disadvantages. Most home-business owners go with a sole proprietorship since it’s easy to start and has few formalities.
But on the downside, starting a sole proprietorship leaves you personally responsible for all business debts and liabilities. You might need to bring in a business attorney for guidance on an entity that best serves your interests.
Once you’ve settled on the entity, you need to go ahead and register your home business with the government and get issued with an employer identification number.
- Get the Necessary Permits
The license you need to run your home-based business will differ from what you’d need for a conventional business. In most cases, you will need a home occupation permit, which shows that your home-based business does not cause significant traffic or pollute the environment.
You might also need property use and zoning permits. Some residences have strict zoning regulations that might hinder your business operations. Besides these special permits, you will also need general licenses relevant to your business.
- Draw a Line between Business and Personal Finances
Separating finances has got to be one of the most significant challenges business people face when starting out. Since most home-based businesses are one-person operations, it becomes even more challenging.
An excellent start would be opening a separate bank account for your business. Since you will be working from home, it would help to choose a bank with exceptional online and mobile banking features.
Once everything is set, you must strive to stay relevant in business. While it doesn’t necessarily mean breaking the bank for huge marketing budgets, you need to find ways to have the edge over your competitors.