10 Tips to Start Your Own Business at Home

#1

Brainstorm Your Idea

Starting a small business from home isn’t exactly something you can put into motion overnight. To succeed, you’ll want to give your business idea much thought.

Think about what kind of goods or services you want to offer and what problems they aim to solve. Are you offering something different? And how does it compare to your competitors? This is also an excellent opportunity to explore your business goals and objectives.

Furthermore, consider the supplies and equipment you might need to start your own business at home. For example, if you’re creating a freelance writing business, you might only need access to a table, desk, and computer. But if you’re looking to build a print screening business, that would require specific tools, supplies, and inventory.

All of these elements will factor into whether you can even get a home business off the ground in the first place.

#2

Start a Budget

As you begin formulating your business concept, start making a note of all the associated business costs. This should include every expense, from supplies to home business insurance.

Having a running list of expenses will help you make educated business decisions later on, like whether you need to apply for financial assistance.

#3

Select Your Business Entity

The next step in building your at-home business requires determining what business entity is best for your company. A business entity, or business structure, refers to the kind of organization you’re forming and indicates how it should be taxed.

There most common business entities include:

• Sole proprietorship
• Partnerships
• S-Corporations
• C-Corporations
• Limited Liability Corporations (LLC)

The Small Business Association (SBA) provides more information on selecting and registering your business structure.

#4

Acquire an EIN

Once you’ve decided on the entity that best suits your business, you must apply for an Employee Identification Number (EIN). It’s like a social security number for your business, identifying it for tax purposes.

Technically, it’s not required for sole proprietors to acquire EINs, but many prefer to do so, as you will need one if you plan to hire employees at any point.

It’s free to apply for an EIN. Simply file a Form SS-4 with the IRS, which you can do online, by mail, or via fax.

#5

Determine if You Need to Register Your Business

Next, you may need to register your business depending on where you’re operating and what kind of business entity you’ve selected. Doing so can sometimes provide tax benefits and legal protections, so it’s a good idea to find out where your business stands with federal, state, and local governments.

Check out the SBA’s guide on registering your business for more guidance.

#6

Look into Whether You Need a Business License

Most small businesses must apply for licenses or permits at the state or federal level. However, the exact requirements will depend on the kind of business you’re running and where you’re operating.

If you need to acquire one, you must apply and pay a small fee. For additional information, check out SBA’s guide on business licenses.

#7

Consider Business Insurance

Deciding whether you’ll need business insurance is essential when running a business from home. Purchasing business insurance can help protect your personal and business assets against unexpected costs arising from injuries, liability claims, property damage, and lawsuits. But, of course, even if you’re careful, accidents happen, and you don’t want your finances to be on the line.

Some common types of business insurance include:

• General liability insurance
• Business owner's policy
• Worker's compensation
• Professional liability insurance
• Product liability insurance
• Commercial property insurance
• Commercial auto insurance

If you purchase business insurance, factor these costs into your budget.

#8

Decide if You Need Funding

You should already be crunching numbers to help forecast expected business costs, so refer to your budget to determine if you’ll need financial planners for small business. For example, will you need help covering payroll when you hire your first employee? Or do you need some funds to pay for your initial equipment and supplies?

The good news is that you don’t necessarily have to rely on the money in your bank account to fund your at-home business because there are many options for financial assistance, from getting a small business loan to getting the attention of investors. You can even look into grant opportunities.

However, you can contact a financial planner for professional guidance if you need more than running numbers.

#9

Make a Marketing Plan

At this stage in starting a small business from home, you can begin focusing on fun stuff, like how you will market your business.

Brainstorm what tactics you want to take and the kinds of platforms you might need to invest in. For instance, do you plan to run ads on social media, develop SMS marketing strategies, and make TikTok videos?

As you begin developing your ideas, remember to add any marketing costs to your ongoing tally of expenses.

#10

Write a Business Plan

Once you determine all of the information above, it’s time to write a business plan. A business plan is basically like a roadmap, outlining all the details about your business, from your goals to your marketing strategies.

In your business plan, you’ll begin by summarizing your business, essentially your elevator pitch, describing what your company offers. Next, you’ll dive into your company description, which is the meat and potatoes of the entire document, as it should go into all the nitty-gritty details of your business concept and what it offers. Other aspects of your business plan involve:

• Conducting market research
• Describing your business’s management and organization
• Outlining your marketing plan
• Establishing your finances

Crafting this document can help you wrap your head around your business concept and work out all the nuances. Moreover, once you finalize it, you can use it to explain your business to potential hires, partners, and investors.