The following is a guest post. Enjoy!
Social distancing. Wearing a mask everywhere. The unpredictable job market. You're pretty much done with all of them, and you think this would be the perfect time to start a home-based business. If you do, you'll have lots of company.
The US Small Business Administration says more than 50 percent of American businesses are based in homes. Among them: CelebriDucks, the company that produces millions of those beloved rubber ducky bathtub toys, is based in the owner's home.
Amazon, Google, Disney, Mary Kay Cosmetics, and Hewlett Packard all began as home-based businesses.
But when you come right down to it, starting a home-based business is just like starting any business. Whether you're working in an office or your home, you have to think about the same things: finances and taxes, profitability, marketing and advertising, and employees. And when you're working out of your house, there are other considerations, too.
No matter how much you want to leap right in, even a home-based business takes some planning and a realistic assessment of your skills. Here are nine questions to answer before you start your home-based business.
1. What's your passion?
The most successful businesses are the ones their owners are passionate about. If you start a business just for the sake of starting a business, it's going to be difficult to force yourself to give it the commitment and time it needs. That's especially true of multilevel marketing and direct sales companies. If you just want to make money and don't believe in the product, stay away.
2. Is Your Idea Profitable?
Before you begin, do some research to make sure there's a market for your product or service. And will people be willing to pay enough to make your business sustainable? Remember, your new venture will have to keep a roof over your head, buy food, and pay taxes and utility bills.
Set income targets and have enough savings to give yourself time to reach them. You might have to tweak your marketing and advertising and even the product or service you offer to reach your goals.
3. Is A Home-Based Business Permitted In Your Neighborhood?
In addition to checking your city and state regulations, look into your homeowner's association rules. Some are very strict about the number of people who can visit your home at the same time, parking, signage, and storing items for sale.
4. Do You Need An Accountant?
If you're not an accountant yourself, it would be wise to have one set up all your financials for you, so you don't accidentally run afoul of tax laws.
5. And Should You Have A Business Plan?
While some businesses succeed by growing organically, a business plan will help you clarify your thinking about your financial goals, target market, and advertising and marketing strategies. It can also include the research you've done on your competition.
6. Is Your Lifestyle Compatible With A Home-Based Business?
You'll need to be able to create a workspace other than the kitchen table. And if you have young children or dogs or cats, can they learn to not disturb you when you're on the phone or meeting remotely or in-person with a customer?
7. Do You Want To Sell Products?
If you do, do you have a place to store them where they'll be protected from dampness and household odors?
Figure out how you'll ship orders, too. Look into Shipware, a company that can help you with logistics optimization. Logistics optimization can help you reduce shipping costs and transit times for customer satisfaction, helping you turn a profit with your logistics and shipping operation.
8. Will You Need Employees?
At first, maybe you can do it all yourself. But eventually, you'll need some help. Think about whether your people will be employees or independent contractors. If they're going to be independent contractors, know the law regarding subcontractors and follow it to the letter. You could be in big trouble with the Department of Labor if you get just one thing wrong.
9. How Will You Market Your Business?
Before you begin, think about how you're going to get the word out about your business and develop a marketing plan. And don't forget a beautiful, professional-looking website and social media presence. Most of your new customers will meet you for the first time online, and first impressions count!
