Starting a business from home is an excellent option if you have limited resources. Most home businesses can be started on a smaller scale with minimum funding, personnel, and space. With this advantage in mind, more and more people consider pursuing entrepreneurship.
According to the U.S. Small Business Association, currently, there are around 15 million home-based small businesses in the United States. This number keeps growing, especially with the COVID-19 pandemic lockdown requiring people to stay at home.
If you plan to start a venture from your own home and wonder where to begin, you have come to the right place! In this article, we will look at some business ideas you can start from home and the essential steps to building a home-based startup.
Different Types of Home Business
Even though home businesses typically have fewer resources, it does not mean that you have limited business opportunities. Starting a home business can open up a wide range of possibilities depending on your interests, experience, and preferred approach.
To help you brainstorm some business ideas, here are some examples of home-based businesses you might want to consider.
This business model is perfect for those who don’t have storage space to hold inventory. With the dropshipping method, the process of producing, storing, and shipping products is handled by a third party. All you need to do is to market and sell the products as well as deal with customer service.
Sell Homemade Products
Most home businesses start because people decide to sell products they make themselves at home. This is the most common home business model because it allows the owner to control almost all aspects of the business. Things such as production rates, prices, and means of shipping are based solely on your preferences.
Offering a service can be a simpler option than selling physical products in terms of technicality. This is because you don’t have to think about storage, packaging, or shipping.
However, this business model requires good networking and mouth-to-mouth marketing to grow. Examples of service-based home businesses include house cleaning, landscaping, and freelance writing.
Teach Online Classes
If you have in-demand skills, such as programming, graphic design, or yoga, you might want to start an online class. Depending on what skill you want to teach, starting an online class doesn’t require a lot of resources since you can start with a laptop and a decent internet connection.
It is also fairly simple since all you need to do is invest your time to formulate ideas and create content. If you plan to build your own website for online classes, consider choosing a reliable hosting provider such as Hostinger to improve your website’s performance.
The popularity of streaming platforms such as Twitch has significantly risen these last two years. In the first quarter of 2021, viewers spent a total of 6.3 billion hours watching Twitch streams, a 97% growth from last year’s number.
Streamers get their income through ad revenues, donations from the audience, subscriptions, and brand deals. If you are interested in playing video games, doing arts, or interacting with an online audience in general, becoming a streamer can be a great option.
How to Start Your Business
There are several important steps you need to take when creating a business. In this part of the article, we will look at the step-by-step process of starting a successful home-based company.
1. Develop Your Ideas
Developing ideas for your home business involves identifying your potential and establishing visions. Ask yourself these questions before you make any decisions:
- What skills or products can you offer? Take a look at what you have to offer to the market. For example, if you have good cooking skills and know where to get high-quality ingredients, starting a culinary business might be a good choice.
- Is it profitable? After you identify your passion and potential, determine if your idea can be turned into a profitable business. For example, opening a radio reparation service might not be a feasible business idea for 2021.
- Can you run it from home? Since you are planning to open a home business, see if you can set everything up without an office or an allocation location. Look into your available space, internet connection, and local regulations regarding running a home business.
Once you have the answers to these questions, then you are good to go.
2. Create a Business Name
A business name is the core of your business identity – it represents the company’s characteristics. Having a good business name can help potential customers to remember your business easier which improves brand awareness.
Your business name can also affect most of your marketing initiatives. It can be used for your product branding, social media marketing, and even a domain name for your business website. Therefore, having a well-crafted business name is crucial in growing your home business.
Also, try to create a unique and easy-to-remember name that gives your audience the general idea of what your business has to offer. Some of the best business name examples include FedEx, Walmart, and Manscaped.
3. Build Your Website
Having a business website is a must, especially if you want to grow your business online. Around 79% of entrepreneurs with a business website expect to grow at least 25% in the next three to five years.
A website can help your business build credibility, provide your visitors with useful information, and generate new leads. There are two standard methods when it comes to building a website, including:
- WordPress. WordPress is the most popular website platform globally, with an estimated 64 million websites currently using it. WordPress is an excellent choice if you want to have more freedom when building sites. However, it requires some technical skills to operate properly.
- Online website builders. If you are new to website building and want it to be ready as soon as possible, online website builders are your best choice. Most of these services offer an intuitive drag-and-drop editor and ready-to-use templates. The downside is that online website builders are less customizable than WordPress-based websites.
Both options have their pros and cons. Look at your needs and preferences to decide which one fits you the most.
4. Create a Business Plan
Even though home businesses are typically smaller in scale, they still require a thorough planning process. Creating a detailed business plan can give you the gist of what to expect and help you to avoid big mistakes along the way.
One of the most important steps of your business plan is conducting market research. Take a look at your potential customers and calculate how big the target market is. Don’t forget to analyze your competitors and determine what makes you different from them.
Other crucial factors to consider during your business planning process include financial projections and sales strategies. Aside from preparing a roadmap for your business, this planning process is also a good way to do more research and gain more experience in your field.
5. Register Your Business
Registering your home business is an important requirement to make sure it operates legally. If you skip this process, you might face various legal and financial obstacles in the future, which will be time-consuming and might hinder your business’s growth.
The process of registering your home business differs significantly depending on where you live. For example, if you live in the US, home businesses can be registered as LLC, Partnership, or Corporation. There might be several requirements and processes to fulfill before your small business gets registered.
Make sure to do thorough research and check the requirements from the official government websites.
6. Secure the Funding
Securing financial resources is crucial to starting any type of venture, including a home business. Depending on what kind of company you want to run, the amount of funding needed may also differ significantly.
A lot of small businesses require little-to-no startup costs to start. It is reported that a third of small businesses get started with less than $5,000. However, some business models may require you to secure funding to purchase equipment, inventory, licensing, and other necessities.
As a small business owner, there are various ways to secure financial resources. Consider applying for a business credit card, collaborating with colleagues, or starting a crowdfunding campaign.
7. Promote the Business
Once you establish the basis of your home business, it is time to promote it to the public. With the rapid growth of internet technology, business owners have plenty of ways to market their business. More importantly, some of these online marketing methods require no cost to start.
Around 76% of small business owners believe that their digital marketing efforts effectively help achieve their goals. When creating a marketing plan, consider utilizing online marketing tools, such as social media platforms, business listing on Google My Business, and SEO strategies for your website.
However, don’t hesitate to use traditional marketing methods such as banners, flyers, and posters if you find that they are still effective for your target market.
When building a small home-based business, you typically have the convenience of starting with minimum resources. This type of business can grow rapidly, especially with the current development of technology and internet availability worldwide.
In this article, we have looked at some examples of home-based businesses for you to consider. We also look at a step-by-step guide on how to start a home business, including:
- Develop your ideas
- Create a business name
- Build your website
- Create a business plan
- Register your business
- Secure the funding
- Promote the business
Since a home business relies heavily on you as the owner, finding something that fits your skills and passion is important. Consider your goals and motivations, then follow the steps presented in this article to start a successful business from your home.