The Ultimate Guide to Starting a Home-Based Small BusinessWritten by Evelina (InvoiceBerry.com) on June 01, 2016
Who of us hasn’t fantasised about organising a business from the comfort of our bed? As the internet makes communication simple and productive, many entrepreneurs and small business owners choose to set up their offices at home.
It’s a particularly good idea if you’re just starting your business when each penny is worth its weight in gold.
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In the UK of the 30.2 million people in work in 2014, 4.2 million (13.9%) were working from home.
Let’s have a deeper look at what it takes to set up your home-based business; which pitfalls might get in your way and how to make the most out of a home office.
Do I have what it takes to start a home-based business?
Working from home is indeed, an ultimate dream come true. In the end, why should you waste time and money on renting an office and making the commute, when you can arrange a home-based business without leaving your bedroom?
However, having a home-based is a lot more complicated than it seems. It requires a personal drive, discipline, and strong time-management skills.
If you plan to work at home, you should weigh all the aspects before getting started.
The perks of working from home are undeniable: no commute, no dress code, no office politics, no fixed work schedule, tax deduction if you use your home as your work office.
Sure, a home office gives you more freedom, more time to spend with your family and friends, but at the same time, it introduces problems such as lack of motivation or never leaving your office space.
Since you have no strict division between an office and a home, it’s easy to drown yourself trying to combine work and house errands. As a result, you end up working long hours having no proper personal time either.
Before establishing a home-based business, ask yourself if you have enough motivation to commit to it, because any small circumstance might drive you off the road.
Since working from home implies that you are isolated from the business world and your potential customers, it’s crucial to maintain professional communication through emails and other tools.
Thankfully, nowadays, apart from the “old-school” phone calls, there’re plenty of apps, such as Slack or Skype, to keep you in touch with your clientele or team to make sure you’re on the same page.
Other distractions such as the unlimited access to the fridge or a beloved pet snuggled in a comfortable bed might take you away from work, resulting in little to no progress with whatever you’re occupied with.
Tip: Take regular breaks if you feel that you attention is starting to wander. Walk the dog or brew yourself a nice cup of fresh coffee.
Having a home business gives you this sense of independence but to be successful you’ll need to fully commit to your business.
Your supposed freedom is limited by various business needs like suppliers depending on what your occupation is. Operating a home business requires much more time management and energy than a traditional office job. It also means a lot of sacrifice when it comes to balancing personal life and business.
Getting Started with Your Home-Based Business
If you find yourself ready to take the challenge and start your own business from home you have a lot of things to take into consideration. Making the jump from a corporate setting to a home-based business can be a bit of a challenge.
1. Have a clear business idea
Every venture starts with an idea. Types of home-based businesses vary from consulting services to crafts of all kinds.
If you’ve decided to set up a small business most likely you already know what you want to be doing. If not, think about it very carefully. Take into consideration your background, your skills and experience.
How to generate a small business idea?
Start brainstorming and write down ideas that pop up in your head.
There’s absolutely no need in pursuing every one of them. The important thing is to be open and try something to see if it sticks. After all, the majority of those ideas may be rubbish, but at least some of them will definitely be brilliant and potentially successful.
Don’t go after ideas that might generate high income but don’t get you excited. If you occupy yourself with something you don’t quite like, you’ll soon get demotivated and burn out.
Before you start offering services or products that customers will be interested in, you need to like what you’re doing yourself.
A lot of people attempt to start a home-based business but quickly lose interest because the product or service they’ve been providing isn’t the one they’re actually passionate about.
You’re going to be investing a lot of time and effort into your business, so it makes no sense to be doing something that doesn’t bring you joy. Otherwise, you’re bound to fail.
Here are some small business ideas that don’t require a big initial capital and might lead you to your next venture business:
- Editorial services (proofreading, copyediting, ghost writing, copywriting, etc.)
- Financial assistance
- Event planning
- Jewellery making
- Personal training
- Computer repair
- Craft store
2. Write a strong business plan
Creating a successful business plan is probably the most important step that a lot of us often miss out on.
Knowing what you want to do is, of course, crucial, but you’re also going to need to figure out who your target audience is and how you’re going to reach them.
The more detailed your plan is, the more successful your business will be. It’s your roadmap you need to follow to succeed.
A few rules you’d rather stick to if you want your business plan to work out:
1) Define your target audience
One of the key elements of starting a business is identifying your target audience. Pretty much every market these days is saturated, so it’s essential to offer something that will distinguish you from your competitors and help you build a loyal clientele.
2) Do some market research
Before diving into selling your products or services you need to clearly understand if there’s a demand for it and generally evaluate the prospects of starting your business.
3) Be realistic
Shooting for the stars is commendable, however, you need to keep your feet on the ground.
Your business plan is the most important element when you’re establishing a new small business. Therefore, it should clearly define your strategy and set realistic goals that you can achieve one step at a time.
4) Set your marketing goals
Your business may be where your home is but that doesn’t mean you can skip advertising. In fact, quite the opposite. And since you’re having extra money from not renting an office, you could spend it on marketing.
Think about the promotion you are going to make. It all depends on your demographics, but social media is a great place to start.
As your business is home-based, people will have questions. Any business will benefit from a website, so it makes sense to invest into one. You can always go for a website template to save time and money, but a professional well-made website would be the best option.
3. Organise proper work space
Running a business from your bed sounds like a good idea, however, when it comes to its realisation, nine times out of ten little to no work gets done. I don’t blame you – who would resist the temptation of having breakfast in bed or taking a nap.
So it’s still very important to have a proper work area even when you’re working from home. When you go to the office, you have a desk set up as your personal work area. A home office should be no different.
You don’t necessarily need to have a separate room for your office (though it helps), but having a relatively free from distractions space is a must for a home-worker.
Invest in a good comfortable chair and a table, and keep all the non-work related stuff, as well as, your pets and family members away from it. This way your brain and body will quickly adjust and remember that this corner of the house is for work only.
Treat this “office” area accordingly and don’t let your family members or friends interrupt you every five minutes with personal enquiries. In the end, if you take your work space seriously the rest will do the same.
4. Take care of all legal requirements
Usually a home-based small business doesn’t require special legal permission. However, depending on the kind of industry your business is in, you might need a certificate or a license. Check your local municipal law to make sure that you’re running your business legally.
If you’re occupied with hairstyling or if you’re starting a food business you will have to meet the health or food administration requirements regardless of where you’re located.
If your business is connected with physical or construction work (including working with various equipment from sports to computers), you’ll need an insurance since you’ll always be at risk.
Sure this isn’t the most exciting part of starting a business, it’s important to be sure you’re not jeopardising your reputation or harming your well-being.
Time-Management When Working From Home
It’s a well-known fact that time is money. No matter who you’re or which industry you’re in if you’re not fully utilising your time, you’re essentially throwing money out of the window; and if you’re running a small business, every penny counts.
One of the tricks of having a successful home-based business is to be able to separate work and leisure. If you can make good use of your time you’ll be more productive and successful.
And it’s actually more simple than it may seem. All you need to do is a bit of careful planning, and you can be on your way to efficiently running your business while maximising your time.
Let’s go over just a few things that you can do to ensure that you’re not wasting your time or money.
1. Always have a clear game plan
When it comes to business, playing it by ear isn’t exactly what you need to achieve good results. What you do need is to have a strategy. By having a proper game plan, you won’t be panicking and thinking about your next move and eventually wasting your precious time.
In addition to the general business plan, we’ve already discussed a couple of paragraphs above, write down your small daily goals and set an allotted amount of time for each of them. This will motivate you and keep you on track so that you can meet these goals quickly.
Also, it’s easy to get lost in the pile of small tasks, so prioritising them and completing the most important ones first is crucial to move forward and not forget anything.
2. Outsource as much as you can
Another great way to make sure that your small business will grow is outsourcing.
Many of the tasks involved in owning and operating a business can be extremely time-consuming and tedious, so it’s best to outsource some of these tasks to save time.
3. Set a proper working schedule
Every office has its working hours, right? Why shouldn’t your home office have them too? Establishing a schedule is crucial for many reasons.
First of all, it’ll help you set your mind to work and be productive during these hours. A nine-to-five routine is what you’re trying to escape working from home. However, to run a successful small business, you have to set some kind of fixed schedule.
You should think of it just like waking up and going to work. If you were working a full-time job, you wouldn’t sleep in late, then eat cereal, watch a few episodes of your favourite TV show before finally doing a few minutes of work.
Set aside at least 5-6 hours a day that you will dedicate solely to working on your business. Having this structure will allow you to accomplish much more than if you just randomly jump into tasks.
Be sure to schedule your work as well as break times so that you don’t overwork or over-relax.
4. Set boundaries for non-work related agenda
It’s quite obvious that your family members and many of your friends will assume that since you don’t go to the “real office”, you’re available for coffee, babysitting or small talks over the phone.
Make it clear to your family and friends that even though you’re physically at home, your work is just as important as of those in the office, which means that you won’t be available for the next couple of hours. They don’t expect you to do any house errands when you’re in the office, after all.
Maintaining communication with your customers and business partners
Isolation is one of the most common issues home-workers face. It’s particularly confusing if your business doesn’t involve meeting with customers or partners on a regular basis.
Working from the home office might be very comfortable, but to make sure that you keep in touch with the outside world you need all possible communication tools.
Make sure that your internet connection is good because a connection to the internet, Wi-Fi and alternative connections (e.g. mobile broadband USB stick) are the most necessary tools in the home office.
Even though nowadays instant messaging tools are being widely used in the business world, email is still the primary means of communication.