Just a few years ago, the idea of a home-based business was not taken seriously. Nowadays, the tendency to move your small business from office to home made a huge turnover in the business world. Did you even know that according to Forbes research, 52% of all small business entrepreneurs in the United States work from home? This is not surprising since everyone dreams of having a flexible work schedule, spending no time to commute, working in comfortable pajamas and generally being completely independent of everyone.
The main reason why home-based business is so common today is technology. We use Internet services and products to carry out lots of business operations, not to say we can even get a loan from the online lending companies instead of going to a bank. By the way, here is a blog about installment loans online in case you want to learn more about this kind of loans.
Now, let’s go over 5 things you have to consider when starting your own home-based business.
Estimate Your Abilities and Knowledge
Confidence in what you do is half of the success, but being objective about your own abilities and knowledge in your business area is 10 times more essential. Even the most well-thought-out business plan won’t be successful unless you understand and constantly examine the market you’ll be working for. You must be a great manager, being able to deal with thousands of daily administrative tasks. So if you are quite far from understanding such things, taking a few business classes will be a good idea.
Learn How to Make Your Business Legal
If you think that a home-based business is a way to escape from burdensome licenses and permits, you are wrong. All the same, to run your business legally you must go through the hell of your local bureaucracy. First, you must get an approval from your zoning department (in case your state or city requires one) as well as many other types of licenses and permits. To those you will include:
- Annual General Business Licenses to make your business legal in your area;
- Home Occupation Permit – even if your city doesn’t require such a permit, check out if it’s necessary for the neighbor areas;
- Sales Tax Permit – a permit you file for certain products/services to collect state and local sales taxes;
- Professional and Trade Licenses – such document from the state government is necessary only for certain businesses, for instance, real estate agents;
- Health and Safety Permits – in case you work specifically with flammable goods or you are involved in food service etc;
- Home Owner’s Association – the HOA won’t demand any documents from you but they have the right to restrict some types of business you are doing on a home basis.
Create a Winning Business Plan
A business plan is the core of your business – it helps to foresee your main goals and gives you the right direction to move for. Besides, a good business plan allows you to predict the number of employees necessary for pursuing these goals. Each business has to include the following points:
- description of your product/service;
- your target customer;
- ways how you are going to reach your target customer;
- description of your financial goals.
This is a minimal list of points to start from. Of course, you can develop or change the plan on the go.
Review Your Rax and Financial Situation
In any case, you won’t escape from this. Creating business accounts in a bank, taking business loans, making a Federal Tax ID Number, finding programs to help you track your financial situation – this is all a financial part of your business, which is a lot of stress. You’ll need a little time before you start earning more than you invest.
Organize Your Work Space
You can work on the couch with a laptop on your knees or stay the whole time in a cabinet but you can’t do it without your own workspace. For your comfort work environment, it’s better to have a separate room where you’ll hear no disturbing noises or you won’t get distracted by other things expect of work.
Surely, you must have a good internet connection and a PC to work online. Even though sitting on the couch the whole days sounds tempting, it’s not the best alternative to a traditional desk with a good lighting and enough space to store everything you’ll need for the work.
All in all, even a home-based small business is stressful since it requires a lot of responsibility from you. However, don’t forget about the advantages of running the entire business yourself, which means these efforts will be definitely paid off in times.
