Working from home has become a way of life for many us these past few months. In a previous article, Imad Aharchaou reminds us that there are a variety of ways to make additional money from the comfort of our home. For those who are looking for another source of income, starting a home-based business is a good way to do this while giving you more space for creativity and innovation. Below, we will explore key steps in starting a legitimate business from home.
Assess Your Resources
Starting a home business begins with assessing your strengths and resources. You may be a closet artist, or you might enjoy baking from time to time. These skills are opportunities that you can capitalize on. The Balance says that the best business ideas are those that hone your natural talents and personality. Doing a business based on something you’re passionate about will also ensure that working on the business remains enjoyable and fulfilling.
Check for Feasability
Home-based businesses are quite unique compared to regular businesses. There are some ideas that work, and some that won’t. In developing your businesses idea, make sure to consider your home situation as well as your residential community. For example, you might not want to start a business that relies heavily on deliveries to the nearby city if you live in a small rural neighborhood. It also might be difficult to start an online tutoring business if you live in an apartment beside a crowded, busy street. These things need to be taken into account as it can spell the failure or success of your home business venture.
Choose a Business Structure
Once you’ve narrowed down your idea, you will need to decide on a legal structure for your home businesses. You might want to consider a sole proprietorship because of its low cost and straightforward nature. It requires less paperwork because the business is not separate from you as an owner. However, you also might want to look at a limited liability company (LLC). In an LLC, the personal risk of being a sole proprietor is removed because of the separation between business and personal. Chron mentions it as the best of both worlds for home-based owners. The good news is that making your home the location of your company is easy, with a guide to setting up an LLC by ZenBusiness explaining how your home address is allowed to be used as an official business address. Convenience and legal protection are two things you should be taking into account when choosing a business structure.
Create a Business Plan
While you may be embarking on this venture alone, this doesn’t mean that you shouldn’t create a business plan. A business plan includes an executive summary of your business idea, your target market and competition, your marketing strategy, as well as your financial and operating plans. The financial plan is a crucial feature of the business plan. This includes calculating your start up and operating costs, as well as your profits. Knowing this will allow you to determine how long it will take for you to break even and eventually earn from your home business.