How to Start a Small Business at Home

Today, home-based businesses are more popular than ever. If you’re interested in the flexibility, personal responsibility, and creativity that is involved when you work from home, you may be the perfect candidate to start your own home-based business. Learn more about how to start a successful small business remotely with this guide to how to start a small business from home.

Recommended: Read our comprehensive guide on how to start a business.

Start a Home-Based Business

What Is a Home-Based Business?

A home-based business is a small business that’s operated out of the comfort of your own home. Due to remote work, home-based business ideas don’t require a physical location, such as an office space or brick and mortar retail space, which results in lower overhead costs.

Home Business Pros

  • No commute means you have more time to commit to your work
  • There is no lease required therefore overhead costs are significantly smaller
  • Create your own flexible schedule
  • The home office tax deduction can save you money as a small-business owner

Home Business Cons

  • You need to be extremely self-motivated
  • Limited space to operate your business
  • Potential issues with neighbors
  • It can be difficult to separate your focus from your professional and personal life

Is a Home-Based Business Right for You?

A home business may be best if you:

  • Are self-motivated
  • Enjoy creating your own schedule
  • Have the space to create a proper workspace
  • Are historically successful at working from home

A home business may not be best if you:

  • Have trouble focusing on your work
  • Live in a small space that can’t accommodate a home office
  • Have a business idea that requires a lot of space or noise pollution

How to Start a Home Business

Choose a Home Business Idea

If you don’t already have a home-based business idea, the first step is to choose one that is compatible with working remotely. To get started, consider your skillset, the time you have to dedicate to this business, and the space you have to dedicate to your business.

If you could use some help choosing your home-based business idea, here are a few resources to help you find the right business idea:

Write a Business Plan

Your business plan is the roadmap to the first three to five years of your business’s life making it essential to the success and wellness of your business. Developing an effective business plan will help you accomplish the steps necessary to reach important milestones. Easily create your business plan using our free business plan generator.

Decide on a Business Structure

The next step to starting your home business is to choose a business structure. The most common business structures are sole proprietorship, limited liability company, corporation, and partnership.

We generally recommend new business owners form a limited liability company (LLC) because it is the easiest to maintain and provides optimal personal liability protection.

Know Your Target Market and Competitors

Researching both your target market and competitors is an important step in starting a small business. Your target market is the audience your marketing campaigns will be geared toward, this is the demographic your products are trying to appeal to. Getting to know your target market allows you to focus your marketing efforts resulting in more effective marketing campaigns.

Researching your competitors helps to assess the ways in which they are successful such as their branding, product offerings, and marketing strategies. The goal is not to imitate your competitors but to learn from them in order to improve your business model.

Create a Marketing Strategy

Marketing strategies are the tactics you use to attract customers and gain exposure. Developing your marketing strategies comes down to who your target market is, how much you have to spend on marketing, and the type of business you are starting.

For help creating a marketing strategy for your home-based business, visit our guide.

Use Technology to Help with Tasks and Communication

As a small business owner, you will have plenty of tasks taking up your time. Utilizing technology to help with tasks such as payroll and accounting can lessen your workload and help your business operate more efficiently.

Build an Online Presence

The internet is the most powerful marketing tool available to small businesses today. Creating a website is an essential part of starting a home business. In addition to this, promoting your business on social media platforms such as Instagram, Facebook, or Twitter can help you gain exposure and connect with potential customers.

Set Up a Home Office

Finally, you will need to set up a home office for your business to operate in. The equipment needed to set up your home office depends on your business type, but there are a few general things you should plan to get:

  • Reliable internet
  • Office supplies
  • Surge protector
  • Good lighting
  • A fire safe box
  • A phone service for business
  • Dependable power source

Home Business Ideas

Digital Art & Design Businesses

Illustration Business — To start an illustration business, you should have artistic skill and entrepreneurial drive. This business is easily operable from home with the only startup expenses being a computer, printer, scanner, software, and art supplies.

Web Design Business — A web design business is easily operable from the comfort of your home and requires only a computer and web design experience to get started.

Specialty Craft Businesses

Woodworking Business — If you are an experienced woodworker with entrepreneurial drive, starting a woodworking business at your home is an easy and potentially profitable venture depending on your skill and the effectiveness of your marketing.

Makeup Artist Business — Whether you’ve been to cosmetology school or have learned from experience, a makeup artist business can be started from home, and startup costs are just the materials to get started.

Care & Hospitality Businesses

Bed and Breakfast — Owning a beautiful home and having a love for entertaining guests are the most important requirements for starting this business. Earning potential is dependent on the number of guests you are able to accept at any given time and the desirability of your location.

Daycare — If you are great with kids and have a reasonably sized home, opening a daycare in your home is a great home-based business option. Startup costs are minimal, only requiring children’s toys, educational materials, and any childproofing materials needed.

Pet Care Businesses

Dog-Training Business — Starting a dog-training business from home typically requires certification before you get started, but this is the only startup cost besides marketing expenses.

Mobile Dog-Grooming Business — This pet care business requires experience and the ability to handle dogs of varying sizes, breeds, and temperaments. To start this business from home, all you will need is grooming equipment.

Teaching & Coaching Businesses

Acting Classes Business — Formal acting training and a good reputation in the industry are the biggest requirements to start an acting classes business from home. There are basically no startup or overhead costs with this business, and the only factors in your success are your experience and location.

Foreign Language Instruction Business — If you are fluent in a foreign language and have a passion for teaching, starting a foreign language instruction business may be the perfect fit for you. However, having a teaching certificate or a degree in language can help increase your success. There are basically no startup or overhead costs with this business, and the only factors that may impact your success are your location and experience.

Tech Businesses

Web Development Business — If you are a skilled computer coder with excellent problem-solving skills and an eye for detail, a web development business may be the right home-based business for you. The startup costs for this business are dependent on the business owner’s skill level; there are some computer developers that are self-taught while others have a high degree of education.

Podcasting Business — Podcasting is a rapidly growing market that is ideal for anyone who enjoys public speaking and possesses interview and conversational skills. Marketing and some type of specialized knowledge base is helpful in this business. The biggest expense for this business is the equipment required to start.

Writing & Publishing Businesses

Freelance Writing Business — A freelance writing business is ideal for skilled writers who enjoy having a flexible schedule that are self-motivated and eager to meet clients’ demands. The only expenses that are required for this type of business are a computer and marketing expenses.

Grant Writing Business — The ideal candidate to start a grant writing business has the skill to write concisely and clearly. Experience working with nonprofit organizations is a bonus. Startup costs for this business type are virtually zero. All you need is a computer and marketing funds to get started.

If you want to explore more ideas for businesses you can start from home, visit our guide to 40 Business Ideas for 2020 (Work From Home) to learn more.

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