Steps to Starting a Home Based Business
Once you've discovered the right home business for you, the next step is to begin the process of making it real. This can be as simple as answering a few questions.
How
How will you structure your business? For most simple home based businesses, a sole proprietorship is adequate. In a sole proprietorship, you make and are responsible for all the business decisions. You can still have employees or outsourced vendors if you need them, but you are solely responsible for complying with any regulations that pertain to you. You are also personally responsible for all debts or judgments against your business. That can be a cause for concern for people who operate businesses which could result in a loss to a customer or client because their personal assets (such as a home) are at risk.
The decision about how to structure your business is worth a good deal of thought and perhaps some professional advice.
What
Now that you know what product or sevice you will be offering and how your business will be structured, the next question is, "What licenses, permits or permissions will I need?". Depending on where you live ( in or out of your city's limits for example), you may need something as simple as a business license, a sales tax permit (if you sell products) or something more complicated like a zoning variance. You may likely run into this one if your clients or customers will be coming to you house to do business with you. Since a zoning variance can be very time consuming and costly, finding another way to do business with your customers -outside of your home- is time well-spent.
As soon as you've chosen a home business to operate, a quick call to your city / county / state offices can give you the answers you need. Many cities, counties and states now have information packets posted on their website that can be downloaded for you to print, complete and fax or mail.
Of course, if professionals in your field are required to be licensed, you will need that; but also ask yourself what associations your customers or clients may expect you to belong to. Being a member in good standing of expected associations can really boost your credibility and make your prospective clients more comfortable in their decision to do business with you. If you do business locally, consider joining your local Chamber of Commerce. Membership in the Better Business Bureau helps too. Association memberships can be costly so only spend your precious start up dollars for ones that are essential, but don't skimp if it's going to hurt your business.
When
This one always sticks in the craw of people who are caught in the "time freedom" fantasy, but here it is anyway. It is ESSENTIAL that you set business hours for yourself. Even if you are creating your masterpiece all alone in a corner of your basement, SET BUSINESS HOURS. In the almost two decades that I have been working with entrepreneurs, the ones who have succeeded beyond their wildest dreams had two things in common. One of those things was they established and kept specific business hours (I'll tell you about the other thing in a minute, I don't want to get off topic). You can certainly be flexible with your time and trade a working hour for a personal hour when you need to, but not having a specific routine set around specific hours dedicated to working will result in having a hobby...one that costs money, instead of making it. Set Business Hours!!!
Begin with the End in Mind
In other words, how do you plan to get out of your business? I admit, it seems a little strange to be thinking about how you plan to exit your business when you haven't even officially started it yet, but this is the BEST time to think about that. You probably don't want to be running your business every day when you're 90 (not that there's anything wrong with that...as long as it's by choice and not necessity). Planning for your exit now will help you set up the business to support that exit. For instance, if you plan to sell your business, you don't want to be set up as a sole proprietor.
Next Steps
Now that you have the groundwork done, head to the Getting Online and let's get ready to launch!
How
How will you structure your business? For most simple home based businesses, a sole proprietorship is adequate. In a sole proprietorship, you make and are responsible for all the business decisions. You can still have employees or outsourced vendors if you need them, but you are solely responsible for complying with any regulations that pertain to you. You are also personally responsible for all debts or judgments against your business. That can be a cause for concern for people who operate businesses which could result in a loss to a customer or client because their personal assets (such as a home) are at risk.
The decision about how to structure your business is worth a good deal of thought and perhaps some professional advice.
What
Now that you know what product or sevice you will be offering and how your business will be structured, the next question is, "What licenses, permits or permissions will I need?". Depending on where you live ( in or out of your city's limits for example), you may need something as simple as a business license, a sales tax permit (if you sell products) or something more complicated like a zoning variance. You may likely run into this one if your clients or customers will be coming to you house to do business with you. Since a zoning variance can be very time consuming and costly, finding another way to do business with your customers -outside of your home- is time well-spent.
As soon as you've chosen a home business to operate, a quick call to your city / county / state offices can give you the answers you need. Many cities, counties and states now have information packets posted on their website that can be downloaded for you to print, complete and fax or mail.
Of course, if professionals in your field are required to be licensed, you will need that; but also ask yourself what associations your customers or clients may expect you to belong to. Being a member in good standing of expected associations can really boost your credibility and make your prospective clients more comfortable in their decision to do business with you. If you do business locally, consider joining your local Chamber of Commerce. Membership in the Better Business Bureau helps too. Association memberships can be costly so only spend your precious start up dollars for ones that are essential, but don't skimp if it's going to hurt your business.
When
This one always sticks in the craw of people who are caught in the "time freedom" fantasy, but here it is anyway. It is ESSENTIAL that you set business hours for yourself. Even if you are creating your masterpiece all alone in a corner of your basement, SET BUSINESS HOURS. In the almost two decades that I have been working with entrepreneurs, the ones who have succeeded beyond their wildest dreams had two things in common. One of those things was they established and kept specific business hours (I'll tell you about the other thing in a minute, I don't want to get off topic). You can certainly be flexible with your time and trade a working hour for a personal hour when you need to, but not having a specific routine set around specific hours dedicated to working will result in having a hobby...one that costs money, instead of making it. Set Business Hours!!!
Begin with the End in Mind
In other words, how do you plan to get out of your business? I admit, it seems a little strange to be thinking about how you plan to exit your business when you haven't even officially started it yet, but this is the BEST time to think about that. You probably don't want to be running your business every day when you're 90 (not that there's anything wrong with that...as long as it's by choice and not necessity). Planning for your exit now will help you set up the business to support that exit. For instance, if you plan to sell your business, you don't want to be set up as a sole proprietor.
Next Steps
Now that you have the groundwork done, head to the Getting Online and let's get ready to launch!
