The Hustler's Digest StaffStarting a business may be your best shot at financial independence, but there is a lot of confusion regarding the procedure. If you want a step-by-step guide for help and precious ideas for guidance to start your own business, read till the end.
Technological advancement and covid19 have geared up home-based jobs and business trends. People are getting attached to the idea of working from home; it feels comfortable, and it increases their performance as well. At the same time, the independence that comes with a personal business is becoming a new trend, especially among youth. If you are looking for a way to build your own business without too much startup investment, you are not alone.
You may be confused, though! You will indeed have a lot of work to do when building your business from home, but the confusion about the process will hurt you even more than hard work. This article is a detailed account of everything you need to know when starting your business. From ideas about funding to niche specifications, you will find everything here.
How to start a small business at home?
We are living in a fast-changing world. Technology is changing and progressing at the speed of light, and it’s changing our lives forever. In the past two decades, the ways and means of the market have changed drastically. Many things have had their impact, technology being one of them, covid19 being the other. People prefer working from home now, especially young people who find it easier to stay home and rake up their creativity on gadgets.
Small businesses are almost all home businesses that require minimal funding and formalities and offer a good chance of making money fast. They offer you the opportunity to stay close to your families, be your own boss, work independently, grow without limits and enjoy life without burning out. This is not to say that it will be a piece of cake; it’s a systematic affair, and you will be required to follow the proper procedure to start your setup, but there will be valuable freedoms and growth opportunities.
Below are the steps you must follow while starting your own small business at home. Staying systematic and following the proper procedure will save you from uncertainties and unnecessary blockages/hurdles.
1- Decide on a successful idea
When you set your mind upon building a business for yourself, the first thing to decide is what kind of business you want to start! You hear someone making millions from a setup that’s just the bare minimum, and you feel motivated, but that sort of motivation is not enough to start a business. You will have to move systematically, gradually, and mindfully towards building your business.
Start searching for ideas. You will see some industries rocking freelancing and remote working while others barely manage things. This can give you some ideas about what kind of business to set up. However, this may not be enough; those businesses may require financing that you lack or skills that you don’t have. You will need a good time searching up business ideas that one can start from home.
Searching up ideas for your small home-based business will need to be well-directed. Going tangential and just haphazardly looking for ideas will only waste your time. While you are at it, follow these directions to lead a more meaningful inquiry into business ideas.
Your skills
You can quickly turn your skills into a business for yourself. It comes with the added benefit of knowing the procedures involved. If you have a skill, like you are a writer or perhaps you sew well, you can build a brand for yourself on these foundations. Write for other startups, maybe create an agency for yourself. Alternatively, sew clothes for others; everyone loves custom-designed and stitched clothes.
How are others growing their skills into businesses?
Yes! You heard it right. Those distant irrelevant others who are bagging success after success can be your remote mentors. See how things worked out for them and how they proceeded with their business ideas. Reading about successful people gives you direction, and their success and spirit motivate you.
Will your skill become a business, especially a home business?
You need to assess your skills against business ideas; will your skill build a business? This is important because not all skills will build businesses.
You need to consider if your skill will allow you to start a business setup from home. You will find all of these things online. If your skill is suitable for a business, but you have not honed/polished it, then try taking short courses before investing money into a business.
Does your idea and skill hold enough scope for making money?
Research the market value of the service or product you want to provide. Is there enough demand for whatever you are offering? How well-paying is it? Do you have to spend more hours and make less? Is it strenuous? Will it benefit you to partner up and grow together? Can you run it all on your own? Will it be successful if you decide to keep it restricted to your home? You cannot proceed blindly if you want to set up a profitable business.
2- Consider the startup cost.
Before you finalize an idea, calculate the cost required for the startup. It may not be a problem for some, but this may be the decisive factor for others. It can be anywhere between a few dollars to several hundred or even thousands. If your business is more about online services, you may be able to start a business for very little.
You might even want to put your idea to the test before actually investing in it with money and time. Try giving free services for a few weeks or selling at reduced prices to check customers’ responses.
3- Write your business plan.
The steps that came before this were also part of the planning, but now that your idea is finalized and you have tested it from several angles, you need to jot down the working plan. By now, you are clear on the type of business, your service, or product and whether it’s doable or not!
Ideally, you should have taken a few courses and read a great deal about home-based businesses and successful startups. Now you want to fix your goals and define your vision to achieve success. If you do not write down your goals for a certain period of time, say, a month, a week, or a year, you will be lost, and you will fail to come up with strategies to target new landmarks.
Your business should be your vision in the written form- it should put down in words how you see your business in three months, what sort of technology, capital or personnel are needed at various stages, etc. specify how you will build customers’ trust in your brand, product or services. This plan is essential to keep you on track, remind you of the purposes and goals, motivate you when you fall behind, and give a sense of direction to your efforts.
One of the most important things to do at this stage is to consider your exit strategy. It may sound a little grim at this stage to be planning an exit strategy, but play smart. Market forces are uncertain, and many factors can lead to unforeseen failures. If you have an exit strategy, you are not affected too badly. It also helps you track and make sense of your progress in the business.
Many young entrepreneurs forget to create an intelligent exit strategy in their zeal to start a new business. They don’t think they can ever fail because of their youthful passion. However, Anyone can fail; a strategy that plans a graceful exit can save you from excessive losses.
4- Fund your business
Next up is how you will fund your business! No matter how small a company you are starting, you will need a plan for funding. Even if you are starting a freelance business, you will need a computer, desktop, or laptop. This is the most basic example. You may need much more than this money, and in some instances, the startup money may be smaller than even a laptop will cost.
No matter what the price of your startup is, you need to find funds for it.
Many startups collapse because they run out of funds before earning a profit. The best trick to handle such a situation is to do a bit of overestimation while you are collecting funds for your startup. Keep your hopes mature: you should know that it will take a while before you run into profit. Before that happens, you should have enough money to fund it. Here are some ways to fund your new small business venture.
Bootstrapping
Bootstrapping, in a nutshell, means funding your business yourself with your saved up money. It is the minimalist way to start a business. It essentially means starting a business without funds from banks, insurers, capitalists, investors, or any long-term financial commitments.
Bootstrapping means entirely self-funding your business ventures.
It keeps the costs low. The less capital you borrow from others, the fewer your interest costs will be. So, the overhead charges will remain under control. You get to keep whatever you earn this way; no interest rates, no monthly installments going to the banks.
However, bootstrapping will need a detailed look at the funding needs and management. You will have to spend a good amount of time figuring out how to reduce the costs of all items you need for the startup. For it to be successful, you will have to do the math a bit. You will figure out if buying things will be cheaper or loan or rent. You need to see if you can outsource your services for better, cheaper rates.
Managing everything on your own is fantastic when you do not have any other source of funding, or you don’t want to involve banks or investors.
Crowdfunding
The power of the internet is real and what’s great about it is that you can use it for your business. Technology has increased money-making venues tremendously, and it has empowered the youth most of all. There are many who get financial help from the public in financially tricky positions, and you can use it too. No shame in it; people love uplifting others; it brings a meaning, a feeling of goodness to their lives.
Crowdfunding is a legal way to get startup funds for your new ventures, so don’t be embarrassed or afraid to opt for it. Advertise your campaign on social media and everywhere else too.
Some crowdfunding campaigns work like donations. People are searching every day for a cause they can donate to because they have surplus money and like helping others. It makes them happy, so give them a reason to stay rooted.
Crowdfunding is also reward-based. It means those people who play their role in your campaign have access to your product or can participate in one way or the other. It is one great way of funding your new, small business ventures when involving banks and investors is not an option.
Additionally, it will be so exciting too. You will not only get the money required, but you can also make new friends and expand your network as a business owner. Crowdfunding has become so popular that there are multiple platforms dedicated to it. Starting your campaign will be swift and easy.
Fools, Friends, and Family (3Fs)
Yet another option is to approach your friends and family when starting a business. It may come as a surprise, but you should know that some 35-40% of new setups receive startup money from these three Fs every year. There is a “fools” category included here because these people don’t read the risk behind new projects and end up investing money even in the most dangerous seed startups.
The biggest advantage of this kind of funding is that your friends and family won’t need a specific credit score or sizable collateral to make their investment secure. If they agree, there will probably be no documentation. No legal issues; no paperwork either. The best thing is to involve your parents; ask them for money, and you will not have extra problems with payback. They will wait gracefully until your business starts churning out a profit.
Friends and family can be way more flexible in their interest rates or may not even need any at times. They are more lenient about delays in payback.
However, the whole thing can backfire too. If your startup ends in failure and you are unable to pay the 3Fs their money spent in business, you can lose a lot of relationships alongside your business. This will be a considerable loss. Choose those relations and friends you know will have the grace to wait and understand if things take an unforeseen turn.
Exploring Startup Funding: Loans vs. Grants
When launching a startup and seeking capital, entrepreneurs often weigh the benefits of loans versus grants. Bank loans are a common choice, providing immediate capital with the expectation of repayment. Despite the financial commitment and risk, loans can be advantageous for businesses confident in their ability to generate returns quickly.
Alternatively, government grants and zero-interest loans offer enticing options for startups. These funds are typically aimed at projects benefiting the community and economy, though securing them involves rigorous competition and extensive documentation. Government oversight ensures funds are used appropriately, adding a layer of accountability.
Choosing between loans and grants hinges on factors like financial stability, risk tolerance, and long-term business goals. Loans provide flexibility but come with repayment obligations and interest costs. In contrast, grants alleviate financial burdens but require meticulous planning and compliance with funding guidelines.
Successful funding strategies involve thorough research and negotiation. Entrepreneurs should explore various loan and grant opportunities, comparing terms and eligibility requirements. Negotiating terms can enhance funding outcomes, aligning financial support with business needs.
Ultimately, whether opting for a loan or pursuing grants, careful consideration of financial viability and strategic alignment is crucial. Each funding avenue offers distinct advantages and considerations, demanding informed decision-making to support startup growth effectively.
5- Register your business
Your home-based business comes under taxation, which means you will need to register it to operate legally. There is no exemption in this regard. As soon as your idea is finalized and you have gathered the funds to start, the first step is to apply for registration.
The exact process of registration will differ from state to state. Registration of these small business setups is a state prerogative. Consult your local Secretary of State or business bureau for guidelines for successfully and smoothly completing your business registration.
Registration with the federal government is mandatory whether you apply for a state license or not. The federal government issues an employer identification number. The EIN comes with many sought-after benefits, so go for it whether you are required to have it or not technically. EIN will be good while hiring employees, opening a business bank account later, and filing for business taxes.
The process of application is straightforward and smooth. You can apply online with the IRS; the whole thing takes no time or effort.
6- Apply for licenses and permits
Once you are done with registration with the state and federal governments, the next step in learning how to start your own business is getting a business license.
As a home-based business, your business license type is going to be different from a standard license, and they rely on the state requirements. The state of residency and where you are starting the business will confirm what kind of license you will need.
These are some of the commonly used licenses for small businesses:
- Home occupation permit: Most home-based businesses will need a home occupation permit to start operations legally. Essentially, this permit is a testament that by running your business from your home, you’re not adding anything to traffic, noise, or harming the environmental conditions of your area.
- Property use and zoning permits: When you’re starting your home-based business, it’s worthwhile to check your local zoning ordinances applicable to home-based businesses in the area. Some residential areas have stringent zoning regulations aimed at the security and benefit of the residents; they can potentially limit or even prevent your business from operating. So, check with your local or city government if such regulations apply.
- General business licenses and permits: the permits mentioned above and licenses are mainly for your small, home-based setup, but keep an eye out for any general licenses required for the legal working of the business. Falling in this category, you might be asked to have a business operating license, sales tax permit, or a professional or trade license. This list is not exhaustive, though!
The gist of the matter is that you will need licenses even if you are starting a small online consultation firm or business of any kind. Do not automatically assume that such a small setup comes without license or taxation requirements. To avoid any legal issues leading to fines or complete termination of the business, you should be careful and get your licenses in hand. Keep the state and federal government on board with your plans and progress.
I want to start a business but have no ideas.
Are you all set in your head to start a business of your own, but you lack direction or ideas? Perhaps you are confused about what you can do to start a small business and enter into a new phase of life- financial independence. If you are struggling to gather some ideas to kickstart your system, this section of the article is about you. Go through this list of ideas and find the one that echoes with you.
Finding your best small business idea is a probe into your skills. You may be thinking, if we are skilled at something, how do we need a probe? Would it not be obvious? Well, you are right, but things are not so clear for some people. Some of us need a bit of a push to understand and realize our skills and potential truly.
While reading the best ideas list below, see which options sound closer to your heart.
1-Home fixtures
Are you always helping your friends and neighbors with things going wrong in the kitchen or the outer deck? Perhaps you are your friends’ first option when they have to build a small ken, a balcony, or something of nature? If you are an expert at these things and you find it natural in you to fix things that need a few “technical touch-ups,” then do not waste this talent of yours. You may not think much of this talent, but the world out there needs you.
You are the lovely handyman of the area who has time to fix things that may be too easy and manageable, but no one’s got time for them. Moreover, you will give those small fixtures your precious time, you will repair and reboot things, and of course, you will charge them for your services.
Now, get a few bucks out of your pocket, build a website and get rolling. You have a new business in making. Do you know what’s best for you? You already have referrals in the form of those services rendered for friends. They will boost your site and help you get started. This is a brilliant way to start when you do not have much at hand and still want to create a source of income for yourself.
2- Woodworker
Similarly, if you find it therapeutic to craft small goods from wood, you might be sitting on a gold mine. Do not take this hobby of yours as a waste of time or a means of relaxation; this could give you a business and a lot of money.
Create an account on Etsy- an online marketplace of unique, artistic, handmade items. The world is going crazy after all things handmade, and you have a chance to create a fortune out of it. Go ahead and put up your handmade wooden goods on Etsy. You will be making more money than many your age because prices are much higher on Etsy.
3- Cook for others
Are you passionate about cooking but not the official chef type? Well, do not worry; you are just as important to the world as any professionally trained chef. You can start a business to give people homemade food. Everyone has a job, and no one can afford to cook every day because they are too busy. Most are in offices craving something healthy, delicious, and yet homemade.
Fulfill this need and become a business owner. Charge people for the time spent in the kitchen and for the skill of creating amazon savories and sweets. They will happily fill your pocket. Ask friends to forward a word for you and create social media profiles like Facebook pages or Instagram profiles for advertising. All so simple, swift, and free of cost.
4- Sewing and alteration specialist
There is always the best dress or an amazing shirt that’s lying in your cupboard because it needs a bit of hemming or button service. But who will do that? No one has the skill or the time to do it; life is fast, and one would rather grab another option out of the closet while the dress will keep on rotting in the cupboard.
How about you offer your services to people to mend their clothes and make money from them. It is very much needed and costs no money to start too. You do not need to learn anything to start. Make a few pages on social media and start your business.
5- Freelance developer
Every little setup, small business needs a website, and you would notice not many can do it on their own. The market has shifted online, and if you do not have an online presence, your business is at a huge loss. A massive percentage of the potential customers are lost if you do not build a website.
As an aspiring entrepreneur, you can give people their websites and manage them in the long run for a fee that you fix.
Wonderful idea for someone skilled as a web developer who hasn’t got a high-paying job already. A business in this line gives you ample time to enjoy your life, friends, and family while filling your pocket to the brim.
Experienced freelance developer proficient in designing and creating highly efficient and user-friendly asset management software tailored to meet the specific needs of organizations.
6- Personal trainer
Everyone is worried about health, fitness, and weight management these days, and fad diets are ever so elusive. People stop their diet plans either because they are demotivated because of the lack of results or get bored, and no one is there to push them forward. You can become a trainer if you have a little knowledge of the subject (you can easily gather it online or do a small course online to kickstart). Offering in-home consultations, workout routines, personalized nutrition plans, and community boot camps help them with the task of staying healthy, happy, and outside!
Fitness does not work without your constant presence online on various social media platforms. Keep inspiring your audience with fun, useful, and interesting workouts and informational videos. Keep them hooked and earn easy money.
7- Freelance graphic designer
Build your own schedule, choose your favorite projects, and build your portfolio and a business. The world needs people like you everywhere. While a web developer builds websites and blogs, graphic designers create designs for them. Many companies search for graphic designers to make their websites interesting, fast, colorful, and captivating. If you are good at this thing, you have the whole world open to you.
8- Life/ career coach
If you are good at helping people walk through careers to their best jobs and navigate through personal transitions successfully, you have a great chance at building a business that would require very little investment. It is a much-needed service in our times where too many career options and meticulous decentralization of industries/roles are making our heads swing.
A lot of people around us have difficulties finding their career path and reaching their full potential as a person; you can be their life coach. You will be able to help so many people find a purpose and a direction in life. It will be therapeutic for yourself, and it will bring some “greens” home too.
9- Resume writer
There are job openings everywhere around us, and we are so eager to apply for them too, but who has the time to build the perfect resume for every post? If you have found the right job for yourself and now you want to impress your employer with a fine, professional, and right-sounding resume and cover letter, you will have to work hard on your resume.
People land in such situations all the time, and they need resume services desperately. If you are good at professional vocabulary, you can rock it!
10- Freelance writer
If you are good at writing, plenty out there are willing to give you good money to boost their search engine presence. Rank them on google with engaging content and earn sitting at home. It only needs your time and nothing else at all!
Conclusion
Creating a home-based business offers unparalleled flexibility and autonomy. You dictate your schedule, terms, and pursue your passions while enjoying quality time with loved ones. Though less demanding than traditional ventures, it still requires dedication and leveraging your skills. A home-based business empowers you to harness your potential fully and enjoy the freedom you crave.
