How to start a small business at home

small-business

1. Identify your small business idea.

Whether you choose an option from the list above or have another idea up your sleeve, it’s important to have the necessary experience, training, or skills to succeed. Want to run a daycare but never even visited a successful daycare center? Spend time doing research to find out if this is really a good fit for your experience, interests and target audience.

2. Start as a side business or hobby.

Can you get your business off the ground by doing evenings or weekends (aka a side job)? This allows you to make some mistakes, test the market, and figure out if your idea has legs before you quit your nine-to-five job and lose your primary income.

3. Decide on your software.

When you first start out you have a lot on your plate. But one step that’s important (and often forgotten by first-time entrepreneurs) is deciding on software that can help you be more efficient as your business grows.

Every business is different — but almost all companies can use software to help with analytics, project management, accounting, bookkeeping, email marketing and other basic day-to-day tasks.

One of the most important software tools every small business should use is a free all-in-one CRM platform to keep track of important customer information in one central database. It will help align your team and ensure you stay organized as your business grows.

4. Create a business plan.

Don’t have a business plan? No business. Especially if your small business idea needs investors, you’ll need to prepare a business plan to provide an overview of your market positioning, your financial projections, and your unique competitive advantages. You can download HubSpot’s free business plan templates for free to get started.

Your business plan should include the following elements:

  • Executive Summary  — A high-level overview of your company and market placement.
  • Business Model  — Outline what your business does, who your business serves, and how your business is structured. You should include a description of what products and services you offer and how they meet your customers’ needs.
  • Market Position  – Summary of relevant competitor information. Determine the strengths and weaknesses of your closest competitors.
  • Products and Services  — Use this section to describe your products and services in detail and outline what differentiates your product from others in the market.
  • Operations and Management  — Outline your business’s organizational structure, key roles and responsibilities.
  • Marketing and Sales Strategy  – This section should describe how you will market and sell your product. Include information about your ideal customer, how you plan to position your offering, and your sales strategy.
  • Financial Plan  – Outline your business finances in detail. Include your start-up costs, your initial financial projections and how you expect to generate funds.
  • Appendix  – Once the above pieces are complete, finish the document with an appendix summarizing your business plan.

When you first start out you have a lot on your plate. But one step that’s important (and often forgotten by first-time entrepreneurs) is deciding on software that can help you be more efficient as your business grows.

Every business is different — but almost all companies can use software to help with analytics, project management, accounting, bookkeeping, email marketing and other basic day-to-day tasks.

One of the most important software tools every small business should use is a free all-in-one CRM platform to keep track of important customer information in one central database. It will help align your team and ensure you stay organized as your business grows.

5. Decide if you will be an LLC or a sole proprietorship.

Two common legal structures for small businesses are limited liability corporations (LLCs) and sole proprietorships.

An LLC is a more complex business structure than a sole proprietorship and can include individuals, corporations, and other LLCs as members. In addition, LLCs are not subject to different levels of taxation and offer business owner liability protection and tax benefits. LLC formation is done on a state-by-state basis.

Sole proprietorships are businesses owned and operated by one person and not recognized by the government as a separate entity from the owner. While a sole proprietorship is the simplest business structure, sole proprietors are personally liable for their business.

Besides an LLC or sole proprietorship, there are a few other options for you to consider.

“While many small businesses may be best served by choosing an LLC or sole proprietorship, there are a few other options,” says Sean Flanigan, Sandal’s content manager.

“Partnerships are best for businesses run by several individuals. It is closest to a sole proprietorship in which individuals take responsibility for the business and pay taxes at the individual level.”

He adds, “To avoid personal liability entirely, small businesses may choose to incorporate as a corporation, S corporation, or B corporation.

Additionally, Flanigan says, “There are a lot of great reasons to be a B Corp beyond just doing good business. That being said, many small businesses that aren’t aiming for super fast growth choose to go with an LLC to keep things simple. while protecting owners from excessive liability.”

Learn more about choosing the right structure for your business from the Small Business Administration.

6. Create a business bank account.

Once you have a legally formed business and have been issued an Employer Identification Number (EIN), open a special bank account for your business. Having a business bank account is a must for keeping your personal and business finances separate which can help you get an accurate picture of your business’s cash flow and financial health.

Additionally, keeping your personal and business finances separate makes bookkeeping and tax preparation easier.

Many banks offer business checking and savings accounts. Business checking accounts typically have no limit on the number of transactions that can be made and debit cards are issued that can be used to make business purchases. However, these checking accounts do not accrue interest.

A business savings account usually earns interest over time but has a limited number of transactions that can be made each month. When you’re just starting out, look for a business bank account that doesn’t require a minimum balance so you’re not penalized for having less funds as you work to build your business.

7. Determine if your business idea works well from home.

Ask yourself if your business idea will work well from home. Some businesses are simply not suitable for being home based. If you want to run a dog boarding center but live in an apartment without a backyard, you might want to consider a dog walking business instead.

8. Set up the office.

Even if your business idea is suitable to be run from home, it is important to have a designated workplace. When a home office isn’t possible, consider setting aside a corner in your living room or a desk in your bedroom for a space that inspires you and creates the conditions for success.

Need more professional space? If you do client-facing work that requires you to be on video calls, no one wants to see your rumpled sheets in the background. Check local coworking spaces for memberships that give you access to conference rooms, desk space, and more.

9. Get to work!

You’ve worked hard and I’ve got good news – it’s only going to get harder. But most entrepreneurs will agree that being your own boss, making your own hours, and getting paid to work on projects you’re passionate about will pay dividends for the rest of your life.

How to start a small business at home

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