Are you looking into starting a business from home? A lot of people are attracted to this idea for a variety of reasons. They like the idea of being their own boss. They like the thought of having the financial freedom to do what they want to do. Maybe they just want to earn some additional income to help them overcome the cycle of living paycheck to paycheck. Whatever your reason is, starting a home business can be a great idea. But how do you make your home business dream into a successful reality? These are some tips that can help you on this journey.
What are you good at?
What are you good at? This should be the first thing that you ask yourself before you move forward with starting a business from home. Do you have any specialized skills? What are your talents and strengths?
Make a list of your strengths
It can help you to make a list of these things so that you can do an accurate evaluation of your competencies and see what you are good at. Do you have a particular knack for design? Are you great at planning parties? These are some strengths that you can turn into an amazing business opportunity, especially if you are passionate about it. Think about what your strengths are and create a business idea based on that. At this point, you are just brainstorming, not settling on an idea already.
Don’t get stuck on little things
It is important that you don’t get easily stuck on small things at this point, such as what you are going to name your business. This isn’t something that will be settled until after you have come up with your idea and started moving it forward. Obsessing about the name early in the planning process will actually just take valuable time and energy away from starting your business. The name will come to you eventually, you just need to let the process happen.
How Can You Make this Profitable?
Now that you have an idea or a few in mind, you need to take a look at whether or not your idea can turn into a profit. You need an idea that will work as a sustainable business model, otherwise, you won’t find much success with your home business. The reality is that not every one of your talents and skills will earn you a profit. You need to carefully consider your skills and decide which one people are going to be willing to pay for and how much they are going to pay for it.
Range of product/service costs
As you start with this, the first question that you should ask is how much someone would pay for those services. If you are thinking about doing interior design, think about how much people are willing to pay for your time. Then, think about whether this income would be enough to sustain the life you are currently living. If not, then move onto your next idea. Keep going until you get at least one idea for a profitable business.
Consistency in profits
A major problem that home businesses have is that they don’t consider the profitability of their business before starting a business from home. You need to make a profit otherwise you won’t be paying any bills. For instance, say if you solely decide to be a wedding planner, you may only be busy during the “wedding season”, which only lasts a few months. What are you going to do for the rest of the year? Are you going to make enough during this season to live off of for the rest of the year? How many weddings can you realistically handle every month? These are just some of the questions you will want to ask yourself. You may find that you would be better expanding into event planning, not just wedding planning.
During the planning process, it is necessary for you to think about profitability. If you don’t, your business will fail before it can even really get started.
What’s your niche?
Any entrepreneur can tell you all about the “unique value proposition” of a business. The reality is that you will likely have a lot of competition in your industry. If you just offer the same thing as everyone else in the industry, you will not only struggle to find new customers, but you will also struggle to get customers from your competition.
You need to stand out. You need your unique value proposition. Somewhere in the chart of a business, you will need to think about 3 things: what your customer needs or care about, what your competition does well, and what you do well.
Research on competition
You need to gather all sorts of data to come up with this value. First, observe what your competition is doing. What do they do well? What could they improve on? By answering these questions, you are going to be able to come up with a way to stand out. You can use this information to come up with a better way to perform that service at a better price point. For instance, you want to fix computers for your business. For the most part, people will need to go to a repair shop to get their computer fixed. This not only takes time and energy; this can be costly for them. They have to spend money on gas. They will have to deal with up-selling. But what if you went to your customers instead? This offers them the convenience and they won’t have to worry about a salesperson trying to make a commission off of them in the store. This can also allow you to offer a lower cost, just charging for labour and parts if needed. Although people also tend to pay more for convenience.
You need to define your unique value proposition if you are going to be successful with your home business. This will help you break into the market and grow your business.
Test Your Idea
Once you have settled on an idea, you will want to test out your idea before you move forward with it. While your business may sound great in your head or on your plan, plans don’t always go the way you want them to. This is why you need to test out your idea before you get started. There are a few things that you can do that will help you test out your idea.
Keep a part-time job
Being an entrepreneur means taking risks in your life. However, you can reduce this risk by keeping up at least a part-time job while you are testing out your idea. This can ensure that you have money to live off of while you are testing different ideas. Part-time jobs give you enough time to test out your idea before you take the plunge and invest all your time into your project. You can also take this opportunity to offer your products or services for free while earning money at your other job. This can help you build experience, develop a reputation in the industry, and learn what you can do to improve your business.
Try It Out on a Small Scale
Look for local trade shows or other events where you can meet the public. What’s great about this is that you can access a smaller group of people who would be willing to test out your services. You can offer a discount in exchange for their feedback. You may end up making money using this method, but the ultimate goal is for you to be able to learn more about whether or not your idea is profitable. This will also help you get feedback about your services or products so that you can learn about how to improve your business. This can be a longer process, but it will help you, in the long run, to determine if your business has the potential to turn into a decent profit, or at least enough for you to live off of.
Test it out on social media
A final way to test out your idea is by leveraging social media influencers in your area. They have found success using social media, gathering quite the audience. This is something that you can use to your advantage. Offer your product or services to an influencer. If your product or service wowed them, then they will tell all their followers. This is free marketing that you can use to grow your business if your test succeeds. What happens if your product fails at this? Then at least you’re still early in the development process that you can move on to your next great idea.
Work Out the Financials
Now that you have tested out the profitability of your idea, you can move onto the next part of the process of starting a business from home. Here, you will need to come up with a budget. This will help you understand what you need to grow your business. According to the Small Business Administration, it is possible to start a home business for only about $3,000 or less, although several factors decide your costs. You don’t have to worry about the upfront costs of purchasing office space or the store, but you do have to worry about marketing and setting up your home office.
Home office setup
The majority of this budget would be for setting up your home office. This also includes the specialized tools that you may need. If you are going into streaming or podcasting, you will need to invest in the right headphones and microphone setup as well as a computer that can handle this. Other businesses may only require a computer and phone. This will all depend on your business. Other expenses for your home office include internet costs, the computer, and a computer desk and chair setup.
Your marketing costs are important for you to consider. Purchasing a domain name and a web host is the first step to this. Most people find businesses online, which means that having an online presence is very important to your business. This can be relatively inexpensive, depending on where you purchase these services. You can also advertise your business on social media, which is a great place to start your marketing efforts. This will cost about £100 – £200 to start with, but it can have a decent impact on people discovering you.
These are things that will start you on a healthy financial future for your business. Once your marketing techniques start taking off, you are going to start growing your business.
Make it Legal
By now, you should have come up with a name for your business. If not, you need to create one before you can legalize your business. There are different legal structures that you can choose from for setting up your business:
- Sole Proprietorship
- General Partnership
- Limited Partnership
- Limited Liability Company
- C Corporation
These are the most common choices that you have to choose from during the process of making your home business a legitimate business. Each of these options has its pros and cons, so you do need to be careful when making this decision. If you are confused as to which one to choose, you can contact a lawyer that specializes in small businesses to help you make an informed decision.
You might also want to check out: The initial tasks in the process of starting a business from home
You should look into the permits in your area, to ensure that you are legally operating your business in your home. Sometimes there may be a “home occupation permit”, meaning that your home meets the zoning requirements for your home business. There may be other permits that you need to be concerned about as well.
It always helps to inquire from a lawyer that specializes in this field to ensure that you are operating your home business within the law.
Starting a business from home is a complicated process, but one that can offer you the financial freedom you have been looking for. This allows you to follow your passions, which will make you even more excited about work every day.
This article was written on behalf of The Brand Perceptionist by Alexander Ffrost. Alex is a serial entrepreneur with a passion for small business, and the creation of new stuff that no-one else has made or that beats the heck out of anything previously created. He loves starting and growing new companies in challenging sectors. Preferably with zero prior experience of the market or industry. In his spare time, Alex starts new brands and dreams of one day being Sir Alex. Or, alternatively, just designing another shirt with a “touch of Ffrost”. To learn more about Alex and his awesome inventions, visit his website at www.alexffrost.com.