How to Start a Small Business at Home

Today, home-based ventures 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 what it takes to launch a successful company 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 venture 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 company
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 startup 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 venture, 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 one:

Write a Business Plan

Your business plan is the roadmap to the first three to five years of your company's life making it essential to the success and wellness of your venture. Developing an effective 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 structures are sole proprietorship, limited liability company, corporation, and partnership.

We generally recommend new 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 company 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 company 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 brand 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 venture to operate in. The equipment needed to set up your home office depends on your company 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 company, you should have artistic skill and entrepreneurial drive. It 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 venture 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 company 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 venture 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 venture. 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 company 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 venture requires experience and the ability to handle dogs of varying sizes, breeds, and temperaments. To start 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 company from home. There are basically no startup or overhead costs, 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.

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 company may be the right home-based business for you. The startup costs are dependent on the 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. The biggest expense is the equipment required to start.

Writing & Publishing Businesses

Freelance Writing Business — This is ideal for skilled writers who enjoy having a flexible schedule that are self-motivated and eager to meet clients’ demands. The only expenses are a computer and marketing expenses.

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

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