The appeal of working from home and being one’s own boss propels many people to research ideas about setting up their own business. Well, as it happens, there are many different things that you can do from home. However, to make the new business work, you really need to know what is involved and then be prepared for some hard work to get your idea off the ground.
How to Get Started
The first thing to do is think of a good business idea. Maybe you already have something in mind, or perhaps you have no clue where to start and are trying to think of things that might work. The best way to make a home-based business work is to choose something that you are passionate about or, at the very least, have an interest in.
Maybe you have thought of a great product that you can source at wholesale prices and then sell online. Or perhaps you have experience in the medical billing industry and think that you can set up your own billing company using online databases such as those found at Find-A-Code. Whatever your idea, it is best to check out the competition first and see if there is a gap in the market where your business would potentially fit in.
Once you know which product or service you are going to sell, do some research to see if there is a demand. If there is a demand, and you believe that there is a gap you can fill, you need to work out how much you can reasonably charge for the product or service that will ensure a profit without pricing yourself out of the market.
When providing a service, consider your expenses as well as your time. Many people will only account for one or the other. For example, think about someone setting up a business offering nail services. They might include the price of their time but forget about the cost of the materials they use during the service. Others might charge a bit more than the price they paid for the materials but forget to factor in the time it takes to provide the service.
To make a business work, you must be competitively priced to entice new customers without leaving yourself short on profits.
Create a Business Plan
Even if you are not planning to seek finance for your business, you should still take the time to write up a business plan. A business plan will give you focus and clarity as you move forward with the business. It is also something to which you can refer when needed. In this plan, you need to include things such as what type of legal structure your business will take. This means whether you are planning to set up a sole proprietorship or a limited liability company. For small start-ups, a sole proprietorship is the quickest and easiest route, but it does mean that you and the business are not legally separated.
You will have to apply for an employer identification number (EIN), which you will need should you ever decide to hire staff or register the business as an LLC. You will then require a separate business bank account to ensure personal and business finances are kept apart.
It is advisable to use an accountant from the very beginning to keep you on the right side of financial and tax laws. Lastly, make sure whether any local licenses are needed for your type of business. If applicable, you will need to apply for these before you can begin trading.