Did you know that 59% of established businesses in the US are based at home?
You might want to start a small home-based business, but you might have a lot of questions. How do you come up with a good business idea? Can you legally run a business from home?
Read on, and you’ll learn everything you need to know about starting a home-based business. If you want to start a business, these tips should help you scratch that entrepreneurial itch.
What Kind of Business Should You Start?
To begin with, you’re probably asking yourself what kind of business you should start. After all, if you don’t have much business experience, it can be hard to identify what counts as a good business opportunity.
Well, there are many ways you can go about dealing with this problem.
The first option is to simply take a look at your skills, and then create a business around something you’re good at.
So, you might have some pottery skills, and you might currently use these skills to create hand-made items for friends. If that’s the case, you can create an ecommerce business so that you can sell your items online.
Another option is to start a business that sells a better version of something that you already use. So, if we take the pottery example from earlier, this could include a special tool that’s used within the pottery class process.
You might also want to consider the option of starting a service business.
Again, if we take the pottery example from earlier, this might involve teaching a live class. The class might teach people how they can improve their pottery skills, and you might hold the classes every week or so.
You might also want to think about starting a business based on what you think a particular market needs.
For instance, you might notice that a lot of local businesses don’t have websites. If that’s the case, you might think about starting a company that sells web design services to local businesses.
Can You Legally Run a Business From Home?
In some cases, there can be restrictions in regard to the kinds of home-based businesses you can open.
Following this, you might want to reach out to your local authorities, once you settle on a business idea.
They will then be able to tell you if you can operate your business from the comfort of your home.
If you want to be really safe, you might want to think about speaking to a lawyer. They will be able to double-check any advice you get, thereby allowing you to stay well within the law.
Setting up a Legal Entity
Once you know what kind of business you want to start, you need to set up a legal entity for your company.
Fortunately, there are many online services that’ll help you set up a company.
During this stage, you’ll have to choose a name for your business. This is something that a lot of newbie business owners overcomplicate. You need to make sure you avoid this kind of situation, or else you might end up wasting a lot of time.
One way you can develop a good name for your business is by using an online name generator.
Such websites will ask you to provide a few words associated with your business or industry. The site will then combine these words, to create a series of new words that you wouldn’t necessarily find in the dictionary.
You can then pick one of these ‘new’ words, and you should then end up with a unique, memorable name that’ll stand out.
Upon registering your business, you will also need to get a federal and state tax ID number for the company.
Fortunately, there are official online portals that’ll help you get this information. That said, you’ll need to go to two separate websites, as the state will have a different portal to the federal government.
Getting Your Equipment
Once you know what kind of business you want to start, and all of your paperwork is taken care of, you need to get your equipment.
There are several ways you can go about procuring equipment for your business.
One option is to lease everything so that you’re only paying a small monthly fee, rather than making a big upfront payment. This option is popular in big businesses such as restaurants, as restaurant equipment is not that affordable.
However, this approach can also work well for the small items you might need for a home-based business. For example, if we take the pottery example from earlier, there is the option of leasing a pottery wheel.
If you don’t want to lease equipment, there’s the option of buying equipment outright.
This, of course, will be more expensive, but the upside is that you will own the equipment. Following this, your long-term costs might be lower, as you won’t be paying leasing fees for months on end.
If you want to improve your cash flow, you may want to buy your equipment with a credit card.
This approach can be risky because if your business is not successful, you still have to pay for the items. That said, if you manage to sell the items, you might be able to pay off a large portion of the debt.
Ready to Start a Business?
Now that you’ve read this post, you should be able to answer a bunch of questions associated with starting a home business. For instance, if someone asks you ‘can you legally run a business from home,’ you should be able to give them a good response.
It’s important to note that your first business might not be successful, and that’s okay. There’s no shame in missing the mark, and if you keep on trying, you’ll eventually end up with a business that generates a good chunk of change.
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Interesting related article: “What is a Home Business?”