Starting a home-based business can be a great way to break free from the traditional nine-to-five job and take control of your financial future. However, it can take a lot of preparation to get yourself organized. Of the 30 million small businesses in the US, around half are home-based. On top of this, working from home gives you control over your working day and greater flexibility to enjoy life on your terms and cut out that commute. So while heading to your office in your PJs and slippers can be tempting, there are some things you need to consider when it comes to home-based businesses; this post looks at some things you will need to consider.
A place to set up a home office
Take stock of the space you need and assess whether or not you can accommodate this at home. You'll need a physical office space even if your business is purely online. You may not need a large or highly fancy space, depending on your business type. Consider whether you can work from your dining room table or if you'll need a dedicated room. Depending on the business you are setting up, you may need more space than your knee on the sofa. For some people, it can be transforming a spare room, or others might need to consider a home extension, e.gIf you're starting a baking company, a larger kitchen and more storage space could be beneficial, helping you grow.
Tech and a good internet connection
Depending on the type of business you're running and the nature of your work, you might need to invest in a few pieces of equipment to get started. First, you need an excellent, high-speed internet connection, a laptop or pc, and other tech items to get you up and running, such as extra monitors, a separate hard drive, a printer, and so on. Make sure you know how to use all of your equipment before you get up and running to avoid any hiccups; whether you need to know how to start up a Mac desktop computer, connect your new printer, or use editing software, make sure you are confident in using everything before you get up and running.
Registering your business
Before officially starting your business, you'll need to register your business with your state. The type of business you're running will dictate what you must do to write. For example, you'll need a retail sales license if you own a retail shop. You'll need a real estate license if you're working in real estate. You may also need a business tax ID known as a Federal Tax Identification Number (TIN). This number is used to identify your business and to put you on the same level as other businesses. This can be done quickly online. You'll want to do this as soon as you start taking payment for work or having people work for you. You can also register your business with various online directories like Yelp, Google, and YellowPages.
You'll have to ensure you're adequately insured when running a business out of your home. At a minimum, you need small business liability insurance; this protects you and your customers if your products or services cause harm or damage or are not what the customers expected and fall short of trading standards. You can also insure all of your equipment, take out insurance to protect your income if you are unable to work (Business Interruption Insurance), and if you take on employees, by law, you are expected to have workers' compensation, disability, and unemployment insurance too despite it being a home-based business.
Permits and certifications
Depending on the type of business you're running, you may need to get specific certifications or permits. For example, suppose you're running a childcare business from your home. In that case, you'll need to make sure you have the appropriate licensing and registration to care for children in your home, as well as having your home inspected by the relevant state department to be working legally. This includes certifications for your staff and a certain degree of insurance. The type of work you're doing may also require a license. For example, you'll need a real estate license if you're a real estate agent. Soo checks your local state laws about your business and national laws and regulations to avoid falling foul of the law.
Before you start your business in earnest, you'll want to sit down and write a business plan. This will help you organize and make getting funding for your business more manageable if you need to take out a loan. The business plan should include your business structure, market and competition, financial, and marketing plan. This will make getting funding from banks and investors easier and help you keep track of your business goals and where you want to go. If you're applying for a loan, you'll want to make sure your plan is detailed and thorough. Your bank or financial institution may have resources to help you start your business plan.
Financing if required
You may need to consider financing if you're starting a home business and don't have the cash to cover the costs. While there are many options, such as credit cards and personal loans, home equity loans are perfect for business owners since you can pay back the loan with interest over a set period and with consistent payments.
Starting a home-based business can be a great way to earn extra income while setting yourself up for a future career. Before you start, however, you'll want to ensure you have the proper equipment, space, and insurance. You'll also want to register your business, research and start a thorough business plan, and shop for financing if needed. With these tips in mind, you'll be well on your way to starting your own successful home-based business.