Whether your desire is to ditch full-time work or just have a side hustle to make some extra money, starting your own home business can be a good idea. Whatever your motivation is, this article will walk you through how to start a small business at home and provide some business ideas you can start for little or no cost.
5 Reasons People Start a Small Business at Home
There are likely dozens of reasons people start their own businesses from home. What follows are five reasons many business owners prefer to start a small business from home.
- Flexible work schedule and more work hours: Working from home means you can choose when you want to work — you set your own schedule. Also, when working from home, you don't have to spend time commuting to an office. This saved time can be used for more work and may mean greater productivity for your small business.
- Reduced overhead costs: Running a business from home means you don't have to rent an office space or pay for warehousing, office utilities, or extra telephone/data charges. The implication of this is lower startup costs.
- Flexible lifestyle: One of the perks of running a home business is that you get to work from home. For example, you can work all day with your pajamas on, especially if you don't have clients or an employee who works with you from your home.
- Tax deduction benefit: Running a business from a dedicated home office space can come with some tax advantages. However, there are a few criteria guiding home office deductions. You may need to check with the Internal Revenue Service (IRS) to be sure you qualify.
How to Start a Small Business at Home
The steps to starting a business from home will likely be different for each person, but generally, it includes:
Identifying a Suitable Home Business Idea
Every successful startup began with a business idea — so, you need an idea, too. However, you don't want to pick just any idea. Your business idea should suit your personality and meet a specific need. A great business idea will incorporate these three elements: passion, skills and professional qualifications, and profitability.
When starting a new business, it's always good to have the proper skills required so you can deliver value and quality. Furthermore, starting and growing a business can sometimes be tough, so you should be passionate about your business. However, passion without profit won't cut it — after all, starting a business is also about making a profit.
Conducting Market Research
Researching your market involves collecting data about your industry and its players, including competitors and prospective customers. This process helps confirm the size of your market to determine if your idea can be scaled. What you find out at this stage will also help you come up with your unique selling proposition and how to position yourself differently from your competitors. It can also help you decide your marketing strategy and pricing.
Writing Your Business Plan
Is it necessary to have a business plan? Yes! Having a business plan is like drawing a map that shows where you are going and how you intend to get there.
Although writing a business plan doesn't automatically guarantee success, it can give you a launchpad for your business goals. A lot of research goes into writing a business plan, which can make the process seem like a huge task. However, what you find out during this process can greatly help you refine your business idea.
Registering Your Business
Now, it's time to register your business as a legal entity. You will also need to decide on a business structure suitable for your new business. Some of your options include a sole proprietorship, partnership, limited liability company (LLC), and corporation, and each has a unique tax liability. You should speak with an attorney to know which option is best for your type of business and the business licenses that might be required. It is also advisable to have a trusted attorney process your business registration.
Creating a Workspace
Running a home business might require that you set up a home office — a place where you can do your small business administration. However, this may not be the case for every home business. For example, if you have a house cleaning business, you'll do your work from other people's homes.
If your business requires that you set up a home office, though, here are a few items that might be necessary (you may need more depending on your type of business):
- A computer
- A high-speed internet connection
- A desk
- Seating
- Lighting
- Phone
- Basic software (e.g., accounting software)
10 Small Business Ideas You Can Do at Home
Below is a highlight of some of the best home business ideas for you to consider. These ideas are selected based on the size of their markets and the low-cost requirement of starting them.
Freelance Writing
There is currently an increasing demand for freelance writers due to the content marketing industry, so freelance writing is fast becoming a very attractive and lucrative home-based business. It can afford you the luxury of a flexible schedule — since you can work part time and control your workload — and the opportunity to do other things that you may find interesting.
As a freelance writer, all you often need is a good internet connection, a computer, and word processing software.
A good way to get started is to have some background experience in communication. You can do this by getting direct work experience or helping small businesses with their marketing writing. Furthermore, you should write consistently — whether free or paid — and build a portfolio. There are a few online freelance platforms where you can get listed and sell your writing services.
E-Commerce
Technology has made it quite easy to shop online. The perks of starting an e-commerce store are so numerous. First, it is easy to set up. You can start an online business today without necessarily building a website. You can simply find a product that's in demand, get listed on Amazon or eBay, and you are in business. Furthermore, e-commerce is a scalable business — you can reach a global market of people who are already shopping online and this can be achieved with minimal cost.
Blogging
In the long run, blogging can be a very profitable home-run business and a source of passive income. The niche you choose, your ability to generate traffic to your blog, and how you monetize that traffic can determine how soon you start making a profit and how much profit you make from your blog. The three common ways you can monetize your blog include:
- Promoting other people's products, known as affiliate marketing
- Creating your own digital products, such as e-books and online courses
- Google AdSense
Virtual Assistance
As a virtual assistant, you perform administrative work remotely for companies and small business owners. Virtual assistants are personal assistants who work remotely. It is a relatively easy business to run from home because clients will often allow you to do their tasks on your own schedule. However, to successfully run a virtual assistant business, you need a level of proficiency with word documents and spreadsheets, a personal computer, and a stable internet connection.
Graphic Design
If you know how to create beautiful designs using basic graphic design tools, a graphic design business might be for you. As a graphic designer, you can set your own work hours, choose your projects, and build a business you can be proud of.
For starters, you will need a personal computer, design software, and a certain level of proficiency with it.
Online Tutoring
The world is changing rapidly as a result of technology; people are adapting to new ways of learning. This has occasioned a rapid growth of the self-education industry.
To start this type of business, you don't necessarily have to be an expert but you should have a certain level of skill, experience, or knowledge in any field. With just your computer, a stable internet connection, and easy-to-use video conferencing software, such as Zoom, you can connect with your students from across the globe. If you are camera shy, you have the alternative of screen-recording, creating PowerPoint slides, or packaging your training in audio format, such as podcasts.
Social Media Management
Social media has transformed marketing. Companies are now looking to have an online presence where they can relate with their customers and advertise to potential customers. With a foundational knowledge of social media platforms, a personal computer — in some cases, a mobile phone might just be enough — and a stable internet connection, you can build a business as a social media manager. Often, what serves as your major portfolio is your personal social media presence, the size of your audience, and the level of engagement happening on your page.
Affiliate Marketing
With affiliate marketing, you don't need to create your own product; you promote other people's products and earn a commission any time someone buys through your affiliate link. With affiliate marketing, you will need to generate traffic to the sales page of the product/service you are promoting. You can either generate this traffic organically — posting on your page and in target online groups or communities — or by running sponsored ads via a social media platform.
With affiliate marketing, you need to identify a product or service that is in demand and a cost-effective and efficient marketing approach. Both of these will require a level of online research, which is why you will need a personal computer — or a mobile phone —a stable internet connection, and some level of training and experience in digital and content marketing.
Web Design and Development
Today, web developers and designers are in higher demand than at any time. You need to acquire a level of coding skills and expertise to gain market entry, though. Similarly, you could carve a niche for yourself as an expert designer on any of the numerous CMS — Content Management System — platforms.
Digital Marketing
Digital internet marketing has become a major part of most organizations' — big or small — marketing strategy. There are a few business opportunities in the digital marketing industry; you can either position yourself as a digital marketer or as a consultant. Whichever you choose, digital marketing is a low-cost operation you can run from your own home. To start a digital marketing business, you will need to develop the skill by learning and practice and have a personal computer, an internet connection, a few tools, and probably a website.
Manage Your Small Business Finances With Skynova
Building a successful business requires a level of bookkeeping or accounting knowledge. You'll be required to manage your cash flow — how money comes in and goes out of your business — and how effectively you manage your finances can play a major role in your ability to grow your home business.
Skynova's accounting software can help you keep track of your income and expenses. Our accounting platform is specifically designed to help small businesses manage their finances efficiently and stay organized.
With accounting worries out of the picture, you can focus on growing your home business.
Explore our small business accounting solutions today.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with a business coach or mentor to further explore the business opportunities that are available and suitable to your condition.