How to Build Your At-Home Business
In the United States, there are approximately 15 million businesses that operate from home. For many people in America, building an at-home business is the dream.
If you’re thinking about starting your own business at home, it’s important to understand what it takes and how challenging it can be. Before you start building a physical office to work out of, there are a few steps you will want to take first before starting the actual business.
Decide on the Type of Business You Want
There are many types of businesses you can start from home. Here are just a few ideas:
- Dog walking;
- Home bakery;
- Online tutoring;
- A craft-related business.
There are hundreds of other options, so to help decide what type of business you want to operate, ask yourself the following questions:
- What skills do I have?
- How can those skills translate into a business idea?
- Can I run this business from home?
- What does my competition look like?
- What does the future look like for this business idea?
These should help you understand your skills and how you can use them to build a successful at-home business.
Create a Business Plan
A business plan is a fundamental document that every business must have. It’s essentially a blueprint for your business. You should create your business plan based on the goals you have for your business as well as the strategy you intend to use to meet those goals.
Here are a few things you should include in your business plan.
- Executive summary of your business;
- What your business does;
- Competitive research and market analysis;
- Organizational management structure;
- Service and product line;
- Marketing and sales information.
These pieces of information will show potential clients and investors how your business plans to operate. The U.S. Small Business Administration (SBA) has a business plan guide that you can use if you need help creating your plan.
Name Your Business
Now comes the fun part: naming your business. Make your business name short and memorable. Start by brainstorming a list of 20 to 50 business names. Simply write down every name that comes to mind. Once you run out of initial ideas, start narrowing them down by choosing your favorites.
Draw inspiration from your name, your family, your favorite things, your passions, the industry of your business, and other things you care about in life. Make sure the name is relevant to what your business does.
Choose a Business Structure
There are four main types of business structures that you can choose from when you start your own business.
- Sole Proprietorship: These are easy to form and as the owner of the business you have complete control over everything. However, this does not establish your business as an entity. Your business liabilities and assets will not be separate from your personal ones.
- General Partnership: This structure is for companies with multiple owners or shareholders. You may consider this structure for your business if you have a partner that you plan to go into business with.
- Limited Liability Corporation (LLC): An LLC gives you the perks of sole proprietorship without having to be personally liable for your business debts. Under an LLC, your personal assets and liabilities are separate from your business. This is a good option for businesses that are medium-to-high risk.
- C-Corporation: A corporation is a legal entity that is separate from its owners. Think of it like this: in a sole proprietorship, your name is the primary name on your business bank account but, in a corporation, the primary account holder is your business. Corporations require more extensive reporting and they have to pay income tax.
You should do as much research as you can on each type of business structure and determine which works best for you and your business strategy. Most small businesses start as a sole proprietorship or an LLC. If there are multiple owners, a partnership is another good option.
Apply for Permits, Licenses, and Other Certifications
Applying for the appropriate permits and licenses is a big part of starting your own business. Here is a checklist of things you need to do:
- Get a federal tax ID number;
- Register your business with your state;
- Apply for the appropriate business licenses, if they pertain to you;
- Check with your state to obtain the right permits and licenses based on your business structure.
Most of this is based on the type of business you have. For example, as a freelancer who establishes a sole proprietorship, you probably will not need to obtain any permits. Alternatively, some types of businesses that often need permits and licenses are restaurants, cleaners, landscapers, and construction companies.
Get Your Finances in Order
According to Fundera, almost half of all at-home business owners can start their business for $5,000 or less. This is an encouraging figure to those who want to create an at-home business.
Knowing that it doesn’t have to cost a fortune, there are a couple of ways that you can get your finances to raise the money you need to start your business.
A lot of businesses will try to raise capital to fund their business. You can do this through crowdfunding or also through SBA loans if you want to try and borrow money. You should also look into government grants for small businesses, as you may be eligible to apply for those.
Taxes and Deductions
To stay in business, your organization must pay taxes. You need to determine what your tax obligations are for federal, state, and local taxes. This is based on the structure of your business.
Be sure to look for tax deductions that are available to you based on your business type and structure.
Create a Marketing Plan
A marketing plan will help you to get your business name in front of your target audience. These are a few examples of things you should add to your marketing plan:
- Communications plan;
- Public relations;
- Social media strategies;
- Digital marketing;
- Brand guide.
Your marketing plan will help you to establish your brand and create effective ways to promote it to your customers.
Build Your Home Office
To start building your new home office, you need to consider preparing the ground for a foundation, using sustainable building materials, how large you want the structure, and how you want the office to be laid out. It is also important to consider the types of materials you are using and their durability. Yellow pine wood, for example, is a unique, high-quality material used for flooring and construction.
Paying attention to these details will allow you to build a home office that works for you and your business needs.