The business world has changed enormously in the last two decades, and the rise of the internet has created huge opportunities for entrepreneurs to run their businesses in unconventional ways. One of the biggest changes in recent years is the number of startups that are being launched from people’s homes. There are many advantages to running your own business from home, such as being able to work flexible hours, save on office space costs, and enjoy a less stressful environment.But how easy is it to start a home business? And what do you need to get started?For everyone who is reading this and wondering, “Can I run a business from home?”, this step-by-step guide will explain everything you need to know.
1. Think of a great home business idea
There are many questions that can help guide you towards finding the ideal home business idea:
What skills do I have?
What knowledge/expertise can I offer that others don’t know about?
Is there something people aren’t doing properly at the moment?
How can my talents be turned into valuable products for customers?
Can I make any existing ideas better than they currently are?
By answering these questions, you will be able to identify an idea that is unique, useful, and potentially profitable. Particularly if this is your first business, it is usually better to stay within your comfort zone than attempt to form a company around something you have no experience in.
2. Conduct market research
Once you have your idea, the next thing you will need to do is conduct comprehensive market research to identify the best way to attract customers to your product or service. You will need to understand who your target customers should be, what they want from a potential company, how much they would be willing to pay for what you are planning to offer, and how you can stand out from the competition.This can be a lengthy process that may involve speaking directly to potential customers about their requirements, but there are also several ways you can conduct market research from home. For example, Google Trends can tell you if people are searching online for products similar to yours. This will show you if there is demand in the marketplace. You can also use social media analytics tools like Hootsuite or Buzzsumo which will show you where your potential customers are spending their time online.
3. Research your competitors
Once you have done your market research, you will then need to find out as much information about your competition as possible. This will help you to identify areas where you can offer customers something better than your competitors. Think carefully about how your competitors present and describe their products or services online – do these descriptions highlight any weaknesses that would give you an advantage? Do they charge too high a price? How does their product compare with yours in terms of quality and value for money?You may even want to contact some of your competitors’ customers directly through platforms like social media. By finding out all this vital information early on, you will be able to identify a unique selling point that will give you an edge when you launch your new business.
4. Create a comprehensive business plan
Every startup needs a business plan to create a clear path forward, budget how much capital is needed and present your idea to potential investors. Your business plan needs to be as comprehensive as possible with no detail too small for inclusion.Here are some of the main points you need to cover in your plan:
Goals – What are you hoping to achieve with your business?
Costs – How much is it going to cost you to get started and keep the company running each month?
Operations – How will you be able to run your business from home? Will you need any special software, employees, or additional resources?
Projections – What are your one-year, two-year, and five-year forecasts? The projections should be clearly labelled so investors know which period they are viewing.
Marketing Strategy – What marketing efforts do you have planned for acquiring customers and clients? How do these plans fit with what you learned during the research phase?
5. Choose a business structure
Once you have done your research and created a business plan, the next step will be to choose what type of legal structure your company will take. This choice will also determine which laws apply for tax purposes and how much paperwork is involved in running the company.The main options available for your home business are:
This means you will be the sole owner of your business without any legal distinction between the business and you personally. This means that you will have unlimited liability for any debts incurred during business operations. Most new businesses start as sole proprietorships because it is the simplest form of organization to establish.
This is where two or more people share ownership of a business. A partnership is like a relationship between shareholders in that all partners are exposed to unlimited liability for company debts. As with a sole proprietorship, partnerships require no legal paperwork and fewer fees need to be paid.
A corporation exists separately from its owners with shares of ownership held by shareholders who have protection against personal liabilities incurred by business debts. Corporations require more time and money during setup than other structures because articles of incorporation need to be filed so you should seek professional advice before making this choice.
Limited Liability Company (LLC)
An LLC offers the same limited liability as corporations but is taxed like a partnership or sole proprietorship. This means that the LLC itself does not pay taxes, but the profits are distributed among partners or owners so they can be taxed on their personal income. Many small businesses progress from a sole proprietorship or partnership to an LLC after they are well-established in the marketplace.
6. Register your business
There is no single register for all UK businesses – you need to check with each authority for information on how to set up and where to go. The good news is that this will only take a few minutes online using the official Companies House UK website which has resources available in both English and Welsh. If you are setting up as a Limited Liability Company (LLC), then it may be necessary to contact HM Revenue & Customs (HMRC) directly since this type of company falls under self-employed taxation laws instead of standard corporation tax rates.If you are unsure about how to register your business, or which structure is the best choice, speak to an experienced business lawyer who will be able to help you make the right choice. If you make a mistake on the registration it could cause potential tax and legal issues so it is always worth spending a little extra time and resources ensuring that everything is done correctly.
7. Open a business account
All business owners should open a business account as soon as they start trading to keep the company’s finances separate from their personal accounts. Setting up a business bank account is relatively simple and will provide your business with many benefits down the line. Once you have opened the account, you will be able to set up online banking so that you can take care of everything from home.Here are some of the unique benefits of a business account compared to a personal account:
You can claim tax deductions for business expenses
Payments are easier to keep track of since you will have both company and private accounts
You will have access to more different types of loan options than with a personal account
You will be able to get a business overdraft which is usually larger than a personal one
You can get a business credit card which will have more favourable rates
You will be able to set up direct debits for your business which can save time on some payments