How to Start a Home Business
How to Start a Home Business
Starting a home business can be an exciting time.
You might already have some ideas on the type of home business you would like to start.
Or you might not be quite so sure.
Before quitting your day job, you will need to be fully prepared.
Whether you are looking to start an online or offline home based business, there are a few things you will need to look into.
In this post, we will review some things you will need to have in order before starting your own home business.
In addition, we will include some ideas you can use for common home businesses.
Let’s get started.
Home Business Ideas – What Home Business Will You Start?
Before you can start your home business, you will need to know specifically what it is that you want to start.
If you haven’t already done so, think about your current skills.
What skills and what experience do you already possess?
Brainstorm and see if you can come up with ideas.
What are you already good at that you can leverage to turn into a real home business?
For example, if you enjoy writing, you might want to start a blog or do affiliate marketing.
See what it is that really interests you and come up with at least 2-3 home business ideas to start.
Write these down if you need to.
Will You Start Your Home Business Part Time or Full Time?
This is a common question that many entrepreneurs have.
Should you devote 40 hours or more per week to your new business venture or should you start out on a part time basis?
This is really going to depend on your current income situation.
You should not go full time if you do not have enough money to support yourself and any family members who depend on you for at least six months.
You need to ensure that money is coming in, while you are working on your home business.
Racking up extra debt and not having the means to pay for it is never a good idea.
Always ensure you have enough money in savings before going all in full time.
Otherwise, start out on a part time basis.
What Tax Structure To Use and Should You Incorporate?
You have several options here.
You can form an S Corporation, C Corporation, or LLC.
Each one of these has different tax advantages.
Which tax structure you choose for your home business will depend on the type of business you are starting, and your own situation.
If it is part time and a low risk business model, some people start out as a sole proprietorship before deciding to incorporate.
It is best to seek the advice of an accountant and licensed tax professional.
How To Fund and Finance Your Home Business?
Most people will use their own personal savings when starting out initially.
Remember how we mentioned that you should have enough money saved before starting your home business?
Be prepared to spend some of this money to get your business up and running.
In addition to your savings account, you will most likely be charging a number of expenses to your business credit card.
You can sign up for a popular credit card such as American Express, Visa, or Mastercard.
All credit card companies offer different kinds of business credit cards, with varying fees and interest rates.
You can always start out with using your own personal credit card.
However if you are serious about your new home business, it will be recommended to sign up for a business credit card so you do not mix business expenses with your own personal expenses. It is best to keep these two separate.
In addition to your own personal savings and charging expenses to a credit card, you can also ask the help of family and friends.
If you have a great business idea, they might be able to help, or at least point you in the right direction.
Other options include trying to get funding through venture capitalists and angel investors, or online crowdfunding sites like Kickstarter.
Don’t get too caught up in these last options if this is your first business you are starting.
Having a business plan can help ensure your business starts off on the right track.
A business plan is a document that contains your business goals, the methods you will be using to achieve these goals, and the time frame to achieve them.
You are using this to describe the future of your business.
What is your plan and how do you plan to accomplish it?
A business plan includes an executive summary of the business and financial projections.
You can find out more detailed information online about common business plan templates.
You need to identify your target market.
Who will your customers be?
If your business will be selling products and services to other businesses, then identify the types of companies and businesses you will be targeting.
You will be prospecting and contacting these companies so it is best to make a list of potential customers.
Decide on the types of companies, the industries these companies are in, and the size of the companies you will be targeting.
You might be selling to small businesses, medium sized businesses, or large corporations including Fortune 500 companies.
It is best to know in advance who your ideal customers will be so you can plan out how to obtain them.
If your business will be selling products and services to individual consumers, you will need to identify who these consumers are and how you will target them.
Where do your customers like to hang out?
If it is online, you might be advertising on sites like Google, Facebook, LinkedIn, or YouTube.
You might be doing paid advertising or you might focus on SEO and Search Engine Optimization.
Figure out the types of customers you would like to target and come up with a plan on how to reach them and target them.
When deciding on how to start a home business, there are many factors to consider.
As you can see, there is a good amount of planning that must be done in order to get things going in the right direction.
Knowing who your customers are and how to reach them is an important factor.
Before you can do this, you need to decide on the right home business to start.
Depending on your skills and interests, you have a number of different options to consider.
Money is the lifeblood of all businesses, and you must be well prepared before investing all of your time into your new home business.
If you are not sure what type of home business to start, feel free to visit other pages on this site for more ideas and information.