A home-based business sounds ideal to a lot of people, especially those who’d like to stop commuting, generate side income, spend more time with their families, or have more control over how they work. It’s possible to start a viable and eventually thriving business from your home (Steve Jobs and Mary Kay Ash did), but it’s also possible to start a business that never gets off the ground. Some part of success is always luck, but the big difference between successful and failed home-based businesses is how serious you are about getting it right.
If you’ve ever built a successful business from home (I’m in year four of running a profitable freelance writing business) you know preparation is a must. Ideally, you’ll read how-to books, pore over blogs, ask questions and get answers in professional forums, join mastermind groups, and seek the advice of mentors. As you do, here are some recommendations you’ll probably see over and over. You can use this list as a guide to avoiding pitfalls, a checklist to see how prepared you are, and a resource for digging deeper into the areas you need to know more about.
1. Interview yourself.
Not only will you be your own boss, you’ll be your own employee, so hire with care.
- Do you see things through?
- Do you plan carefully before investing time and effort in a new project?
- Do you enjoy learning new things and connecting with people?
The answers to these questions should be yes. If not, can you improve your skills or find a business partner whose strengths balance your weak areas?Want to start a home-based business? Start by interviewing yourself, employee #1. Click To Tweet
- Read more on this step: Want to Be Your Own Boss? Answer These Questions First
2. Study the logistics of self-employment.
If you have the temperament to go ahead, next you’ll need to think about the practicalities of working from home, such as:
- Do you have space to work and to store any inventory, equipment, and raw materials?
- If you have children or other household members who need care, can you get help so you can spend some time each day purely focused on work?
- Do you have the money to get started? Even a home-based business with no physical inventory will require a few hundred dollars’ worth of startup expenses—local business licenses and permits, professional liability insurance, a web site, and business cards at the very least.
If the answer to any of these questions is no, you can save yourself time, money, and frustration by sorting out those issues before you start your business.
- Read more on this step: Setting Up House For Your Home-Based Business Workspace
3. Make a simple and clear business plan.
What do you plan to sell? Who will buy it? How will you reach them? How often will they buy from you, and how much will they spend? What can you expect in terms of gross revenue and net profit? You can find free business plan templates all over the internet, like this one from The $100 Startup, and checklists like this one from the Small Business Administration.The key to any successful #HomeBusiness? Start with a clear and actionable plan. Click To Tweet
- Read more on this step: Make A Simple and Clear Business Plan
4. Put your legal and financial ducks in a row.
Decide on your business type (most likely a sole proprietorship, but there are other options). Get your city or county business permit and an Employer Identification Number (EIN) from the IRS. You’ll need them to open a business checking account, which you’ll fund with the money you’ve allocated to start your business. (You’ll need the account so you don’t create a tax-time nightmare of commingled personal and business funds.) If you need a state sales tax permit, you’ll need your EIN to apply for that as well. This is the time to look into professional liability insurance to protect you from possible lawsuits. If you’re a service provider, learn what kind of client contract is standard in your industry and customize a version for your business.
- Read more on this step: Organize Your Finances With A Home Business Budget Template
5. Set up your website.
Even if for now it’s just a landing page where visitors can join your email list. Look for a web hosting service that offers mobile-optimized site templates and fast page-load times, because most people search and browse on their phones now. If you plan to sell from your website, your hosting service should integrate easily with a high-quality e-commerce platform so your customers can pay you securely online.
- Read more on this step: 5 Steps To Follow When Creating Your First Business Website
Many work-from-homers got their start with a website from HostGator. Check out our web hosting plans here.
6. Set up a professional email address.
To your friends, you may be foxytiger@??.com, but your prospects want to see a reassuringly professional address based on your company’s domain name. Not all web hosts offer email hosting. Streamline things for yourselves by choosing a web host (like HostGator) that offers free emails with your website.
- Read more on this step: The Tools You Need To Market Your New Business
7. Listen to your prospective customers.
This step is actually steps zero through infinity, because the most successful home-based businesses go out of their way to meet the needs of their customers, and it’s especially important to listen well as you plan your first product or service. Ask questions and get input on your ideas. You can do this in online forums, over social media, and on your blog, if you add one to your website.Want your #HomeBusiness to succeed? Never stop listening to your customers. Click To Tweet
- Read more on this step: Why Customer Feedback Is Crucial For Any New Business
8. Develop your MVP.
Yes, you are your business’ most valuable player, but this is the minimum viable product step. What can you offer your audience that will provide value for them and require a not-ridiculous amount of risk (in terms of effort and expense) from you? The MVP won’t be your only product. It’s just a first step that allows you to test demand and customer response, see that your checkout process works, and get feedback from buyers about what they’d like to see in your next version or product.
- Read more on this step: How To Build A Minimum Viable Product
9. Ramp up your marketing.
Once you have a product to offer and a customer base, you can market to prospects like the customers you already have. The exact marketing strategies to use depend on your audience. Do they hang out on Facebook or are they readers of your local free weekly paper? Find out how your current customers heard about you and go from there.
- Read more on this step: 4 Cheap, Easy Ways to Start Marketing Your Business
10. Develop new products or services.
Expand or iterate on your product line based on customer feedback. Market them to your current and prospective customers, and listen to their feedback on each new offering.
- Read more on this step: How To Expand Your Product Line, The Right Way
11. Review regularly.
After your MVP launch and again after each new product or service introduction (or a couple of times a year if you sell one particular service), ask yourself a few questions about your business in general.
- Are you making progress?
- Is your business profitable or on a clear path to profitability?
- Can you handle the workload?
- Do you need to upgrade your web hosting plan or redesign your site?
- Do you have an excellent business relationship with your customers?
- Read more on this step: Smart Review Habits Can Help Your Business Thrive
You may need to go back to an earlier step and make some adjustments. You might need to hire an employee. You might even need to pat yourself on the back for a job (of your own making) well done.