If you've been dreaming of starting a business from home but think you're not qualified, there's probably less holding you back than you think. Many small business ideas will allow you to earn a reasonable income from home.
There's no need to take classes, become an accountant, or hire a manager. You don't have to spend months filling out complicated paperwork or cutting through legal red tape.
You can probably do everything you need to start a successful home business in one afternoon. Starting a business won't ensure success or even secure a sale, but to begin a journey, you must take the first steps.
We are often our biggest stumbling block by allowing fear of the unknown to stand in the way of success. Taking these steps can give you the confidence you need to take action and turn your goals into reality.
Step 1. Come Up with a Business Idea
Do you have a passion or skill that others might pay for? That could be the beginning of a successful small business. Of course, simply having a business idea isn't enough – it's important to see if there's a market for it and whether or not you can stand out amongst competitors.
To test the viability of your business idea, start with market research and competitor analysis. Look into your target market, what they're currently buying, and what similar businesses offer. This can help shape your unique selling points and guide your business plan.
And don't be afraid to ask for input from friends, family, and industry professionals – their feedback can give you valuable insights on refining and improving your business idea before taking the plunge into entrepreneurship. Remember, coming up with a successful business idea is the first step in starting a small business – but it's an important foundation to build upon.
Step 2. Decide What Product or Service to Offer
Before starting your own business, it's important to figure out exactly what you plan to sell. Are you selling physical products or offering a service? Perhaps a combination of both? Once you understand the products and services you plan to offer, it's time to start thinking about your target customer.
Who is most likely to purchase from you? What problem are your products or services solving for them? Asking these questions can help guide your marketing efforts and increase your chances of success.
And don't be afraid to shake things up – as customer needs evolve, so should your offerings. So get creative and stay adaptable – those are key ingredients for becoming a successful business owner. Happy selling!
Step 3. Postpone Branding
You may feel doubtful when your first step is to avoid something that's been plastered on every business article you've ever read. However, if you're spending months or years dreaming up the perfect company name, you're not making money.
Even worse, you're not launching your business idea into the world. Branding your business before you begin not only puts your priorities out of order, it gives you limits you don't need as a beginner.
Branding only works when it mirrors the company's actions and ideas. As you get your company off the ground, your brand will emerge.
It's perfectly fine for your small business to operate under something other than your company name. Besides, a company name is something you can easily change in the future.
Step 4. Get Your Employer Identification Number
An employer identification number (EIN) is a tax number used to identify your business. It's legally required if you intend to hire employees or form a corporation, LLC, or partnership.
Even if you expect to be a one-person show, getting an EIN is smart for business and security reasons. Skipping this step requires you to use your social security number to identify your business, making you vulnerable to identity theft.
The easiest way to get your EIN is to apply online. If you want some more good news … It's free.
Step 5. Register Your Trade Name
Unless you plan on using your legal name for your home business, you might be required to register a trade name. Generally, state law mandates whether you need a trade name.
These laws can vary from state to state, but if your name isn't a part of your company's name, you should check your local requirements.
Registering your trade name is a simple process requiring you to fill out a form with your contact information and a few details about your business.
If you're working with partners, all names involved with the business will likely be needed on this form.
Step 6. Get Your Business License
Your city or county will require you to purchase a license to start your business from home. If you don't know the requirements in your area, the Small Business Administration provides a handy guide to help you understand the combination of licenses you need to legally run your business.
A business license holds you accountable for your services and the necessary taxes.
While it might seem unnecessary if you're only using your home business for extra income, you could face potential legal issues without it.
You may be able to get your license online. Otherwise, visiting your city or county office will likely do the trick. You will need to fill out a form with your business details.
Use your Employer Identification Number on this form instead of your social security number to increase privacy. You might be required to pay a small fee to get your business license.
Once you've taken this step, you have officially started a business from home.
Step 7. Prepare a Business Plan
“A goal without a plan is just a wish.” This brilliant phrase was first uttered by French aviator and writer Antoine de Saint-Exupery (author of “The Little Prince” written in 1943) over half a century ago.
It is a fitting description of how many people face their hopes for the future. Whether your goal is to complete your education, get a better-paying job, or thrive instead of just surviving, wishing won't get you there.
If your goal is starting a new business from home, it will take more than a plan. You'll have to take action. If you need financing to start your small business, you must know how to set up a business plan.
But, even if you already have the money you need to get started, a business plan will help you figure out how much money you need and what direction your small business needs to go.
Your business plan is a map—a way to list the necessary steps you need to take to achieve your goals. A business plan is a tool you'll use to manage your business and stay on track.
In fact, your small business doesn't need a formal business plan; it can simply be a list of milestones you want to reach and financial goals you hope to achieve.
If you don't have to present to investors, don’t think of this as a formal document but an overview of your business structure, the problems your business will solve, and your target market.
Creating a plan will help uncover any business areas you may not have thought through. Plenty of online resources are available if you need detailed information on writing a business plan.
Step 8. Decide On a Business Model
When starting a new business, it can be tempting to jump right in without considering your legal structure. But trust me, how you set up your business can have real consequences down the road.
A sole proprietorship may be the way to go in terms of ease and simplicity. As the name suggests, this type of structure means that you are the business's sole owner – no complicated paperwork or taxes are required. It also allows for flexibility in terms of decision-making and profits.
However, there is one major downside: as the sole proprietor, you are personally responsible for any debts or liabilities that may arise while running your business. So while it may seem attractive at first, carefully consider all of your options before settling on a legal structure for your small business.
Open a Business Bank Account
To truly calculate the financial success of any business, you need a separate bank account. Even if you are the only person involved with the business, your personal finances can quickly get in the way of the clarity you need to run your business.
As your business grows, the importance of keeping your company a separate entity from your personal life only becomes more important.
Opening a business bank account can protect you from unexpected problems and provide the necessary convenience for smooth transactions.
I have my business account at a local credit union. There are so many options available when it comes to banking, so be sure to take your time and compare fees and benefits before making a decision.
Reasons a Business Bank Account is Necessary
Protect Yourself with Business Insurance
Running a business comes with numerous risks, including lawsuits, data breaches, and unexpected interruptions that can potentially shut down operations. Before going full steam ahead, it's important to protect yourself by obtaining the right insurance coverage.
Sitting down with an insurance agent can help you identify specific coverage options that will cover your bases and give you peace of mind. And hey, even if nothing goes wrong (fingers crossed!), at least you'll have the satisfaction of knowing you're fully prepared, just in case. So go ahead and chase those entrepreneurial dreams – don't forget to safeguard them with appropriate insurance coverage.
Set Up a Home Office
So, you've made the leap to start a small business from home! It's a liberating feeling, isn't it? Before settling into a permanent spot on your couch or at the kitchen table for all your work tasks, consider setting up a designated home office.
Trust me, having a specific space for your work materials and tasks can do wonders for your productivity and mental health. Plus, when it's time to clock out for the day, you can leave all of your work in one place instead of finding scattered papers and forgotten to-do lists all over the house.
Designating an entire room as an office is ideal, but even carving out a corner of your bedroom can make a difference. So go ahead and treat yourself to some cute desk decor and organizational supplies – you deserve it! And enjoy all the perks that come with a designated workspace for your new business.
Find a Good Accountant
Hiring an accountant can bring a sense of relief and peace of mind when it comes to filing, structuring your business, and tracking expenses. Many small business owners try to save money by handling their taxes themselves, but this can often end up costing them more in the long run.
An accountant can not only ensure that everything is done correctly, but they can also offer valuable insight and advice on optimizing your business financially. So leave the tax headaches to the professionals and focus on what you do best – running your business! (
Bonus tip: make sure to shop for a reputable accountant with experience working with small businesses in your industry.)
Check For Any Additional Legal Requirements
Starting a new business is exciting, but it's important to ensure all of your i's are dotted and t's are crossed. Before you dive in head first, take the time to research any state or local requirements that may apply to your home-based business.
These can range from obtaining a license or permit to studying local zoning laws restricting where you can start a small business. And trust me, the last thing you want is to be hit with a fine for something that could have been easily avoided with some proper investigation beforehand.
So before you start that catering business or open up that subscription box business, be sure to check what legal boxes need to be checked off first. It may feel tedious initially, but it will save you headaches (and money) down the road.
Put Your Business Idea to the Test
Ready to bring in some actual money from your business idea? In the world of entrepreneurship, nothing speaks louder than a sale. So, it's time to hit the pavement and start selling. But where do you even start?
Final Thoughts on Starting a Small Business
If you're considering starting a business venture, there are many things to consider. From marketing and sales plan to startup costs and business website design, it's important to do your research and understand all the ins and outs of starting a business.
But if you're passionate about your product or service and have a clear vision for your company, then starting a small business from home can be a great way to bring your dream to life.