How To Start Your Own Business From Home
Saturday, January 9, 2021, 6:00 AM | Leave Comment
Some of the largest companies to date began at home. Before their offices occupied every city block in San Francisco, Seattle, and New York, both Amazon and Google were founded in garage spaces.
Starting your own business from home, however, can have several logistical and geographical challenges.
To help simplify the process for aspiring entrepreneurs, here are six tips on how to start your own business from home:
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Get Clear on the “What”
Oftentimes, entrepreneurs get too excited about starting a business that they rush in without a clear definition of the type of business they want to start. Sure, you may have decided to start a consulting firm or an arts and crafts shop, but it’s not enough information to merit investing resources, including time and money, into the project. The answer to your “what” should be detailed, such as “a digital content creation business in the video game space” or a “web development business that specializes in restaurants and food trucks”. Once you know exactly what type of business you are looking to build, it’ll be easier to find the people and tools you need.
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Create an MVP
An MVP stands for Minimum Viable Product and is a common abbreviation in the startup world. It essentially means a product or service in its most raw form. Creating an MVP allows you to gauge the business’ viability as you gain a better understanding of production costs, target market, marketing strategies, order fulfillment challenges, etcetera. What an MVP looks like will vary from one business to the next. An arts and crafts business may start with a single sculpture or painting while a software development business’s MVP may come in the form of a fully functional eCommerce store or mobile application.
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Figure Out Costs
Knowing your prospective business’ operating costs is a key data point as this determines how much capital you’ll need to raise either through savings, traditional business loans, and/or private investments. Some costs you’ll likely have to account for include equipment, incorporation fees, inventory, supplies, marketing, website, and utilities. You’ll also need to consider taxes, occasional business-related traveling expenses, and shipping charges. Although inconsequential when viewed individually, these costs can collectively reach thousands of dollars. Once you have an idea of expected operating costs, you can now start planning on how to raise the capital.
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Figure Out Funding Options
Business funding or lack thereof is one of the most common causes of why new businesses fail in the nascent stages. Running out of financial runway, accumulating too much business debt, or giving up too large a share of your business to investors are common finance-related problems that inexperienced entrepreneurs run into. Fortunately, platforms, like Uplyft, make it easy for you to apply for a business loan with an easy sign-up process, minimal wait time, and quick fund transfer.
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Prepare for Incorporation
Incorporating your business makes it an official entity from here on out. To kick things off, start by identifying the appropriate structure you wish to incorporate your business into. The choices include sole proprietorship, limited liability company, partnership, and corporation. Each structure has its own pros and cons, so do your research to determine which one best suits your enterprise. For businesses that are not incorporated as a sole proprietor, you’ll have to apply for a federal EIN, or Employer Identification Number. You’ll also need to apply for specific business permits or licenses, which vary based on your location.
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Get Business Insurance
Securing adequate business insurance coverage is important as it covers a myriad of financial risks, such as bodily injury, property damages, employee lawsuits, and customer settlements, that your business might get slapped with in the future. Having business insurance also helps protect your business’ image and makes it look more legitimate and trustworthy. You can choose between general liability coverage or business owner’s coverage, depending on what type of business you are planning to start. Consult with an insurance agent to determine which policy offers the best protection for your business.
Keep in mind that these steps are only half the battle when you start a home-based business. The other half involves setting up your home office, finding reliable vendors to manufacture or distribute your products, and marketing yourself to raise brand awareness.
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