How to start Small Business at Home
1. Identify your small business ideaWhether you choose an option from the list above or have another idea up your sleeve, it’s important to have the experience, training, or skills necessary to be successful. Want to run a daycare but have never even visited a successful daycare center? Spend time conducting research to learn whether this is really the right fit for your experience and interests.
2. Start as a side business or hobby
Can you get your business off the ground as an evenings or weekends side job? This allows you to make some mistakes, test the market, and understand whether your idea has legs before you quit your nine-to-five job and lose your primary income.
3. Create a business plan
Once you know your idea has the potential to succeed, it’s time to build a business plan. Your business plan should include the following elements:
- Executive summary: A high-level overview of your company and market placement.
- Business model: Outline what your business does, who your business serves, and how your business is structured. You should include a description of what products and services you offer, and how they meet the needs of your customers.
- Market condition: A summary of pertinent competitor information. Determine the strengths and weaknesses of your closest competitors.
- Products and services: Use this section to describe your products and services in detail, and outline what differentiates your product from others in the market.
- Operations and management: Outline your business’ organization structure, key roles, and responsibilities.
- Marketing and sales strategy: This section should describe how you will market and sell your product. Include information on your ideal customer, how you plan to position your offering, and your sales strategy.
- Financial plan: Create a detailed outline of your business financials. Include your start-up costs, your initial financial productions, and how you anticipate generating funding.
- Appendix: Once the above pieces are complete, end the document with an appendix summarizing your business plan.
4. Decide whether you’ll be an LLC or sole proprietorship
Two common legal structures for small businesses are limited liability corporations (LLC) and sole proprietorships.
- An LLC is a more complex business structure than a sole proprietorship, and can include individuals, corporations, and other LLC as members. Additionally, LLC are not subject to a separate level of tax and offer the business owner liability protection and tax advantages. LLC are formed on a state-by-state basis.
- Sole proprietorships are businesses owned and operated by one person, and are not identified as a separate entity from the owner by the government. While a sole proprietorship is the simplest business structure, sole proprietors are personally liable for their business.
Once you have a legally formed business and have been issued an Employer Identification Number, open a bank account specifically for your business. Having a business bank account is essential for keeping your personal and business finances separate which can help you gain an accurate picture of your business cash flow and financial health. Additionally, keeping your personal and business finances separate makes bookkeeping and tax preparation easier. Many banks offer business checking and savings accounts. Business checking accounts typically do not have a limit on the number of transactions that can take place, and issue a debit card that can be used for making business purchases. However, these checking accounts do not accrue interests. Business savings accounts typically earn interest over time, but have a limited number of transactions that can occur each month. When you’re just starting out, look for a business bank account that does not have a minimum balance requirement so you are not penalized for having low funds as you work to build your business.
6. Decide on your software
You’ve got a lot of things on your plate when first starting up. But one step that’s critical is deciding on the software that can help you be more efficient as your business grows. Every business is different but almost all companies can use software to help with analytics, project management, accounting, bookkeeping, email marketing, and other basic day-to-day tasks. One of the most important software tools every business should utilize is free CRM to keep track of important customer information in one central database. It will help align your team and make sure you stay organized as your business grows.
7. Determine if your business idea works well from home
Ask yourself whether your business idea will work well from home. Some businesses simply aren’t suited to being based from home. If you want to run a dog boarding center but live in an apartment without a backyard, you might want to consider a dog walking business instead.
8. Set up an office
If your business idea is well-suited for being run from home, it’s still important you have a designated work space. While a home office might not be possible, consider setting aside a corner in your living room or putting a desk in your bedroom for a space that inspires you and creates the conditions for success. Need a more professional space; If you conduct client-facing work requiring you to be on video calls, no one wants to see your rumpled sheets in the background. Check out local coworking spaces for memberships that earn you access to conference rooms, desk space.
9. Get to work
You’ve put in the hard work and I’ve got good news it’s only going to get harder. But most entrepreneurs will agree the payoff of being your own boss, making your own hours, and working on projects you’re passionate about will pay dividends for the rest of your life.
10. Feedback and Evaluation
Selecting a small business idea is a personal decision. But it can be helpful to bounce ideas off your friends and family. Don’t be afraid to ask for help throughout this process and remember to have a little fun while you’re putting in the work. Keep track of your performance and set a standard for your performance evaluation.
