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If you recently lost a job due to the pandemic and decided to start a business from home, you’re definitely not the only one. The number of Americans opening a business skyrocketed in 2020 to a 13-year high.
Surprising? Maybe, but difficult times often cause people to reassess their priorities. And no matter when you make the leap into entrepreneurship, running your own business always requires risk.
But, as plenty of workers realized last year, working for a company doesn’t guarantee job security either. At least running a business puts the control in your own hands And you never know, it might just be the best “crazy” idea you ever had.
How to start a business from home step-by-step
Starting a business from home is overwhelming, to say the least.
Planning is key. Once you’ve outlined the key steps, dig deeper to build out each sub-step involved.
Obstacles are a given when starting a business, but you can usually work through every hurdle with a little determination, so don’t let the inevitable setbacks discourage you.
1. Decide what type of business to start from home
Really, this might be the hardest part.
E-commerce, consulting, dog walking, daycare, tutoring—how can you pick just one? How can you decide which one has the best chance of succeeding?
On the other hand, you might also have your heart set on something but later find out those profit margins are tight.
Start by brainstorming some ideas based on your skills and experience. Once you have a few ideas on how to start a business from home, jump into some market research:
- Will you need to serve customers in your immediate area?
- If so, what’s your competition like in comparison to demand? Can you do something better or different than the competitors?
- Can you expand to a wider market online?
- What will demand for your product/service look like in ten years?
2. Write your business outline and plan
After finishing the questions above, you should have a solid idea of how you can apply your skills in a profitable way.
Now you’ll need to outline your business plan. It takes time, but putting the details in writing allows you to break down each step so you can delegate the appropriate time and resources.
According to the Small Business Association (SBA), your plan should include:
- Executive summary: Your mission statement, goals, location, and ideas for growth.
- Description: Explain how your business will work, who you’ll serve, why you believe you’ll succeed, and any partnerships—get specific with all these points!
- Market analysis: Dive deeper into your target audience, how your competitors operate, what their business health looks like, and specific steps to reach your market.
- Marketing plans: Outline your website’s function, which social media platforms you’ll use to reach your target audience, advertising opportunities, and content marketing.
- Budget planning: How much do you expect to spend launching the business and how much will it cost to keep your business running each month?
- Financial projections: What will your income from the business look like six months out? How long will it take to recover the business’s startup costs, factoring ongoing costs into the equation? With moderate growth, what will profits look like in five years? Ten?
3. Secure your name and license
Here’s the good news: Legal Zoom makes state licensing and setting up a registered agent (official address) totally painless for newbies.
The bad news: It could cost between $300 and $1,000 or more, depending on the type of license you need and state regulations. And that’s just the cost of legal operation—your trademark application tacks on another $250 to $350.
Make sure you search the database and watch the videos before submitting your trademark application too—if it’s denied, you don’t get that money back.
4. Open an account to start your business from home
You might not think you need a business account for selling your crafts on Etsy, but when you factor in shipping costs, marketing costs, incoming money, and other expenses, things get confusing real fast.
As your business grows, it gets even harder to keep finances separate. Ask your current bank about business accounts and business credit cards for expenses. Check other banks out as well, then compare to pick the right one.
5. Plan your budget and financing
Even if you’re offering a service and don’t need product inventory, you still need some funds for marketing material, content, advertising, graphics, and a website.
You can do a lot yourself if you have the experience but targeted advertising and website hosting still cost money. Factor your costs for these things along with your licensing/trademark fees.
Don’t let funding set you back! You have options to work-from-home in your spare time and fill that gap.
6. Set up your home office and workspace
You need a dedicated space away from the chaos to focus on your business. Before you even start your business from home, set aside a space where you can establish a work mindset. You’re less likely to get distracted in a dedicated workspace than if you just work from your couch.
Consider any workspace you need for production if your business involves artisan crafts, woodworking, metalwork, or anything physical you make or package yourself.
All that’s left is you
All that’s left is for you to act. That’s really the hardest part: taking the first step.
Once you commit and begin to follow your plan, use that momentum to push toward your end goal.
Stay flexible and be ready to adapt as problems pop up. Good luck!
Need assistance covering your startup costs? Want to build skills that are transferable to ANY business? Vector can help fill the gap. See what we’re about!