Starting a business from home can be incredibly rewarding: home-based businesses make up roughly 50 percent of all U.S. businesses, according to the Small Business Administration, and those workers see countless benefits, including cost savings, flexibility, autonomy and increased productivity. In fact, 80 percent of home-based businesses are successful after five years, compared to less than 50 percent for other small business ventures.
So, want to Starting a business from home and want to do it right? Finding the information you need to get started can be challenging and sometimes overwhelming. Business planning, financing, marketing, legal help -- there's so much to think about and even more to organize. Save, print, and bookmark this Ultimate Checklist.
Before You Start
- Conduct a personal evaluation. Take the Small Business Administration's "Are you ready to start a business?" questionnaire.
- Sign up for small business training classes. Free courses are available through the SBA or SCORE.org, which will teach you more about writing a business plan, accounting, tax rules, marketing best practices, and more.
- Research the market. Who are your target customers? Competitors? Is the sector or industry poised for growth?
- Write your business plan. Reach out to mentors at SCORE.org to offer feedback.
- Name your business. Register your business name with your state.
- Secure a PO Box if you'd rather not list your home address as your primary business address.
- Set up a separate phone line if your cell phone will not be your primary number.
- Figure out where in your house you will set up shop. Your workspace will need to be equipped with a desk or table, comfortable desk chair, proper lighting, and easy access to electrical outlets.
- Keep track of your household's costs for electricity, real estate taxes, mortgage interest, insurance, repairs, etc. Depending on how much space you use as your home office, a percentage of these items may be deducted as business expenses.
- Buy a laptop for work-only purposes. The second you download and install World of Zoo to keep your 5-year-old occupied, it becomes a family computer and can pose problems if you try to claim it as a business expense.
- Equip your computer with necessary business software and apps, such as Microsoft Office, Quickbooks, ZoHo, Dropbox, Carbonite, and so on.
- Invest in an all-in-one printer that will help you scan, print, fax, and copy. It will also save you from countless trips to the post office or Staples).
Legal & Financial Necessities
- Decide what form of business entity to establish. Speak with a lawyer or research on your own if forming an LLC is right for you. If not, you may consider a sole proprietorship, partnership, corporation, or S corporation.
- Apply for an EIN tax ID number.
- Open a business bank account and apply for a business credit card.
- Figure out your business' budget. How much money will you spend on supplies, advertising, operations or shipping, intern help, etc.? How much will your own salary be?
- If you're not funding the company yourself, research the options to get your business off the ground - crowdfunding, venture capital, or corporate bank loans. You may also consider reaching out friends and family for seed money.
- Set up the books. You may not need anything fancier than an Excel spreadsheet, but as soon as you begin to grow, you'll need finance software to keep yourself organized.
- Look into small business insurance, including liability, and errors and omissions insurance. Double-check your homeowners' insurance policy; it's likely that it does not cover home-based business losses.
- Reach out to a local CPA who can help answer any questions you may have, and can organize and submit your business taxes for the following year.
Build Your Web Presence
- Register your domain name URL.
- Build your website with a web hosting company like Weebly or Wordpress. Alternatively, you can reach out to developers to put together a more complex website or online storefront.
- Establish your business email account.
- Set up a merchant account or online shopping cart in order to accept credit card payments.
Market Your Business
- Design basic marketing materials, including images for social media accounts, brochures or ebook templates, business cards, or direct mail pieces.
- Set up an email marketing account. The most popular small business email marketing providers are Constant Contact, MailChimp, and AWeber.
- Secure your business' name on the appropriate social networks where you plan to market. Use KnowEm to reserve your name on hundreds of social media sites.
- Promote your products and services with social media. Blog 2-5 times a week and offer exclusive content, thoughtful insights, and discounts across social channels.
Whether you're earning money on the side or working full-time (and then some) on your own endeavor, being an entrepreneur has inserted itself into the 21st century American Dream. Starting a business from home can be a large and complex endeavor, but if you stay organized with this checklist, your business will be off to a solid start.
Inspired? Get more Starting a business up tips from Business.com.