Preparation is the key to starting a successful home based business. You might have an excellent idea or a dream you want to follow, but first, you need to be rigorous and very honest with yourself. Below are the key areas you should consider.
- What are my talents?
Successful business people, home-based or otherwise, play to their strengths – their skills.
You might be a natural organizer, be creative or thrive on attention to detail. Enlisting your talents, it is a good idea in order of what gives you the most satisfaction.
- What are my skills?
Skills are things you have learned, your areas of acquired knowledge. Depending on your talents, this might be anything from accounting to event management and writing to design.
- Talents + Skills + Opportunities = Business Ideas
Once you have decided where your expertise lies, look around to find your market. The key here is to keep your eyes and ears open. You might provide better or cheaper products in an established market or create an entirely new service. Keep up to date with current affairs/business news to spot opportunities. Ask businesses what they need. Two great examples of spotting the right opportunity include:
- After the legalization of same-sex marriages in Canada, canny entrepreneurs offered tourist packages that included a wedding ceremony.
- Mark Zuckerberg saw the need for a social-networking website at the Harvard University campus. He went on to found Facebook.
- Is my home suitable?
For this, you need to ask the following questions:
- Does my home have enough room for an office/storage?
- Are their local laws regarding business zoning?
- Can I do the job from home?
- Can I make a profit?
It is critical to draw up a business plan to find out if you can turn a profit. No profit equals no business. How much money you want to make depends on you. It might be just to supplement current household income or be the primary source of your livelihood. The basic things to look at are:
- How much money will people pay for my product or services?
- What will be my costs?
Be rigorous with these two questions and cross off any ideas that won’t put money in your pocket.
Once you have a well thought out plan, the next step is all about the legal requirements. These will vary according to where you live and the type of business. However, below are the basic requirements:
- Business Registration
Register a business name with your state or appropriate government
- Legal structure
For home-based enterprises, this is likely to be a sole proprietorship, LL Company, LLC Corporation or C Corporation.
Register with and find out your relevant tax code from your local and national tax agency.
- Business Licenses
Ensure you have the appropriate federal and local permits necessary for your business.
There are a large number of free guides on government and other websites to help you set up a business entity. One of the best in the USA is the IRS’s Small Business Self-Employed One-Stop Resource. Alternatively, some companies will help you starting an LLC by doing all the legal work for you and steering you through relevant tax laws.
Outsourcing vs. DIY
Business taxes can be a lot more complicated than personal taxes. If you are not up to the task, consider hiring a Certified Public Accountant to ensure you get it right and maximize profits.
You need to have a system for accepting payments. If you have an e-commerce website, it is relatively easy to set up direct payments through a merchant’s services provider. If you offer a consulting service, you will need to set up an invoice and billing system that can accept credit cards.
- Web design and online marketing
Without a physical site for clients to visit, a website and online marketing are going to be your best options. Even if you are not that tech savvy, there are a lot of companies that will help you set up and host your business website. If you want a more sophisticated site, it is worth hiring a designer who can also sort out the trickier problems of fraud prevention and security. Additionally, a good designer can help plan out search engine optimization (SEO), pay-per-click advertisements (PPC) and e-mail marketing options.
Shop around and talk to IT sales staff to find out exactly what you need that will fit your budget.
Again, if you are not tech savvy, it is worth enlisting the help of an IT programmer to help with any computer problems or customer service issues that may crop up.
- Product storage
If you are selling products, your garage might not be big enough for storage. To keep it all in-house, you can look into self-storage facilities. However, one of the easiest options is to hire a fulfillment services company. These firms arrange direct shipment from product suppliers to your customers.
Fulfillment companies deal with storage, shipping, returns, receipts and customer order queries.
Other Things to Consider
- Business Training
Making the leap from paid employee to business owner can be daunting. To give you confidence there are plenty of free and subscribed courses around specifically for starting up a new enterprise.
If you do not have the capital to fund your home-based business look for low-interest loan programs. Depending on your location, there might be government or venture capital grants available.
To start a successful home-based business first, you have to find that one thing you do exceptionally well. Stick to this and look around for opportunities to exploit it.
Next, gather as much relevant information you can. Remember, a failure to prepare is preparing to fail.
Guest Writer – Patricia Forrest is passionate about numbers. She studied accounting. She has made its way in the business world and now is part of the Corporation USA where its passion lives daily.
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