The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy!
Working from home is still a big craze on the internet these days. What some people may not realize is that it take a lot of hard work to work from home regardless if it’s a side hustle or a full-time business.
Yet and still, the results can be very rewarding. As someone who just quit my job to run my home-based freelance business, it was important for me to understand what to do in order to set up a profitable online business that could allow me to meet all my needs and financial goals.
Since I’m the breadwinner in my household and my family still has some debt, it was crucial that I set up my online business up for success. If you are in a similar boat and you want to work from home, one of the best ways to earn a good income is to set up a small home-based business.
Benefits of Starting a Home-Based Business
There are numerous benefits to setting up a home-based business and they include:
- Having the flexibility to work from home and cut out tedious tasks like dealing with commuter traffic.
- The ability to set your own hours (if you are completely location independent, you can work from anywhere)
- An unlimited earning potential. Since you control how little or how often you work along with other aspects of the business like sales and marketing, the sky can literally be the limit in terms of how much you can earn. If you don’t like waiting around for an employer to give you a small raise once a year, this can be a huge perk that allows you to have more control over your future.
If all of those benefits sounds good to you and you’ve been playing around with the idea of working from home or starting a full online business, here are a few things you need to do in order to set yourself up for success.
Brainstorm Business Ideas
First you need to determine what type of business you’d like to have. This initial step may take a while because it’s very important. You need to choose something that you are good at and something you can see yourself doing in the long run. In other words, it should be enjoyable and a passion.
It’s also important to focus on earning potential because going into business for something you’re passionate about and not earning money will just turn it into a hobby and won’t put bread on the table. Who will you serve and what type of demand exists in that industry.
For example, if you plan on running a travel agent business because you love helping friends and family plan their trips, decide who your target market will be to gain clarity.
You can look at the industry as a whole and see if there is potential for growth and what competitors are doing to bring in income. If you can see longevity in the idea in terms of income and your happiness, it may be worth looking into further.
Some top home-based business ideas include:
- Private Tutor
- Childcare
- Business Coaching
- Consulting
- Transcription
- Freelance Writing
- Virtual Assistant
- Accounting
- Web Design
- Photography
- Bakery
- Wedding Planner
Develop a Business Plan
After you’ve determined what you will be doing and who you will be serving, it’s time to write out a business plan. Your business plan doesn’t have to be super extensive, but it should be thorough, clear, and summarize the mission of your business and how you plan to grow it.
This will help you stay organized when making certain decisions regarding your services, clients you work with, partnerships you develop, etc.
You should also include some financial information in your business plan since you might need to show it to potential investors. Determine what your start-up costs will be, if you will be providing specific services or resources to the community, and how much funding you may need to meet certain business goals.
Find Funding
Depending on what type of business you establish, you may need funding from outside sources.
If you have low startup costs and can invest your own money into your business, that’s fine, but it’s best to avoid taking out a business loan if you can.
You can start by pitching family and friends to invest in your business, but don’t stop there. You can also reach out to private investors or ask if they can sponsor a project, event, or campaign you’re having.
One business owner I know who started a remote business in order to travel around the country with his wife pitched a well-known job board to assist him and they ended up sponsoring a documentary he was working on.
Depending on the type of business you have, you may be able to qualify for some government grants. The Small Business Administration offers different types of loans and grants to businesses but the requirements vary. You can learn more about SBA grants here and search for various different grants at Grants.gov.
Sort Out the Legal Matters
You may not have to legitimize your business by forming an LLC or S-Corp, but it could help you out around tax time. Entrepreneurs need to set aside a rather large amount of their earnings aside for taxes because they don’t have an employer to supplement it for them.
Depending on your needs, you may want to just be a sole proprietorship, or become a limited liability company (LLC) or an S-Corp. You can learn more about your federal tax responsibilities here.
Trusted sites like LegalZoom.com can help you legitimize your business and if you choose this route, you’ll also need to make sure you register your business name with your state and get a tax identification number.
It’s Best to Start On the Side
While all of these steps may sound overwhelming, it’s important to realize that you can go at your own pace when setting up your business. One of the best things I did to ensure that my business was profitable was starting it on the side of my full-time job more than two years ago.
I started out slow and paced myself. I made use of the extra time I had to get organized, gain clients, and execute my business strategy and slowly it started to pay off and I was able to replace the income I was earning at my full-time job.
It was a lot of trial and error though but it wasn’t as risky because I knew that if my side business’ income didn’t meet the goals I had for the month I could always fall back on my full-time job.
Starting your business off on the side is a great way to play it safe so you can reach success when you make the leap and leave a traditional job with steady income.
How about you all? Have you ever thought about starting a home-based business? Do you have any side hustles?
Share your experiences by commenting below!
***Photo courtesy https://www.flickr.com/photos/duskblackwolf/4286862314/
