Becoming an entrepreneur is a dream for many people. With all of the hurdles in the way, doing so can seem impossible. Starting a home-based business can be a more appealing alternative, as there are usually fewer costs and risks involved.
It still needs a lot of work and effort, however. It’s not nearly as simple as setting yourself up at the kitchen table and starting your business. You’ll need to keep more than a few things in mind to make sure you start your home-based business the right way.
Once you do, you’ll be in a better position to do so successfully. You’ll lay the foundation for future growth and revenue. There’s no reason not to focus on a few particular factors when you’re starting a home-based business.
Why start a home-based business?
Before diving into what you’ll need to focus on, it’s worth looking at why starting a home-based business is appealing. It offers multiple advantages compared to working for somebody else and even starting a brick-and-mortar company, including:
You Keep The Money You Make - All of the profit the company makes goes straight to you. You’re free to take it as a salary or reinvest it back into the business.
More Personal Freedom - Like starting any other kind of company, you have more personal freedom with how you spend your time. Home-based businesses extend that by making sure there’s no dress code and other factors.
Less Risky - Since a home-based company takes fewer resources and less funding than a brick-and-mortar company, there’s not as much risk involved in starting it.
- Follow Your Passion - You can start a business doing what you love at home, whether that's becoming a furniture designer, learning to program and setting up your own ecommerce websites, or launching your very own subscription box business in a niche you love. The possibilities are endless when it comes to your very own business.
The advantages of starting a home-based business can be too appealing to ignore. If you’ve got the urge to start your company, you should make sure you do so the right way. Spending time researching your niche and developing a business plan - as well as registering your company - are some of the more notable areas to focus on.
Outside of these, you’ll need to focus on a few other factors, each of which are vital to starting and growing your home-based business.
What to know before starting a home-based business: 5 important factors
No matter what type of business you start, you’ll need to deal with various laws and regulations. From local to federal - and everything in between - you’ll need to be aware of the legalities that affect your home-based company.
These can affect all aspects of your company, from what materials you can have in your product to how you can advertise. Covering these from the beginning is essential, as they also apply to how you can start your business.
Spending the time researching all laws relevant to your business is essential. It could also be worth speaking to a legal professional to help you understand the process more.
You’ll need to get eyeballs on your product so you can sell it. That’s impossible without some form of marketing. Taking advantage of multiple strategies helps with this, such as social media marketing and search engine optimization.
These can all seem overwhelming, especially when combined with the multiple other business duties you’ll need to look after. Outsourcing to a communications agency can be an effective way around this. You’ll get access to marketing expertise for an affordable price.
That turns into cost-effective marketing strategies that develop revenue for your home-based business. If you’re doing this yourself, focus on what your target market responds to best. Look at your business from their perspective and plan your marketing efforts accordingly.
While a home-based business needs fewer resources than their traditional counterparts, they’ll still need some financing. You’ll need to understand your finances and develop a budget based around what you can afford.
If you’re unable to start the company with the funds you currently have, you may end up getting a business loan. Before doing so, you should spend time comparing options and getting the best deal you can. Make sure it's the right option for you and you are not taking unecessary risk as you'll want to financially protect your business and yourself.
Early-stage investors can also be an option, but it’s worth weighing the funds against giving up part of your business. When you’re starting a home-based business, understanding the financials is vital. Make sure you spend time on this. Financial planning is a large part of this.
How large do you want your home-based business to be? Do you want to stay local or grow into an international company? While you’ll have to start small, knowing the answers to these questions helps you much more than you’d think.
Knowing the scope of the business you want to start lets you plan to achieve that. If you don’t know what your goals are, you can’t figure out a way to achieve them. Figure these out before starting your home-based business.
Once you do, you can craft a roadmap that helps you get there. It gives you the steps needed to get there and a rough timeline for how long it’ll take.
You’ll already know that you’ll need a space to work from when starting a home-based business. You'll need to decide if your home is the right location for your business and if you have the space to accomodate whatever it is. Making sure this helps you be as productive as possible while working is essential. It mightn’t be the only space you need to worry about.
If you’re selling products, you could need storage and manufacturing space. While this can be minimized by working or partnering with various companies - or dropshipping - you’ll still need some space. That could be as little as space for test products. For admin tasks you'll want a comfortable, practical and secure home office.
Making sure you have enough of this space from the start saves the stress in the short term. As you grow, you can always consider leasing a larger space for manufacturing or storage.
How to grow your home-based business
Once you’ve started, you’ll eventually need to figure out how to grow your home-based business. Marketing is one of the more effective ways of doing so, but you can use more than a few other strategies to accomplish this. Some of the more notable ways of doing so includes:
Retarget Existing Customers - Selling to existing customers costs less than to new ones and is more effective, as they’re already familiar with your brand. To increase your return on investment, implement strategies that maximize the number of sales you get per customer. Be sure not to ignore new customers.
Target Other Markets - Your target demographic will drive most of your sales, but that doesn’t mean they’re your only possible customers. You could have several adjacent markets you could target. If your main market is working parents, a few tweaks to your product could make it appropriate for stay-at-home parents.
Expand Your Products - You’ll have specific products or services you’ll want to focus on. These will drive sales and could be what your company is known for. You can enhance this by offering complimentary or adjacent products. You’ll open up more revenue streams and take up a greater share of the market.
Starting and growing your home-based business doesn’t need to be as complicated as you’d think. By laying a solid foundation and knowing how to capitalize on it, you can make sure you get there. It’ll take work, but it’s within your reach more than you’d think.
What to know before starting a home-based business: Wrapping up
Starting a home-based business offers multiple advantages compared to their traditional counterparts. They’re far from simple to set up and run, however. You’ll need to focus on multiple areas while making sure they’re looked after.
Once you do, you’ll have a solid foundation to grow your home-based business from. While this takes time, it’ll be much more within your reach than you’d think.