Entrepreneurship is nothing new for Americans. Even during the pandemic, 52.6% of entrepreneurs planning on starting a business claimed their motivations didn’t come from necessity. They genuinely saw opportunities presented by the crisis.
In the modern, tech-friendly world, aspiring entrepreneurs can often take this leap of faith without needing major investors or a large staff. In fact, many business ideas can incubate and grow from the comfort of an owner's home.
The Pros and Cons of Starting a Home Business
If you’re considering starting a home-based business, there are several benefits that can make this well worth your while. For instance, a home business:
- Is a lean business model with low overhead costs
- Offers flexible hours and proximity to work
- Can scale by hiring remote staff
Of course, as with all business models, there are also several downsides, including the fact that:
- It can be challenging to separate work and personal life
- If you have inventory, you may need to utilize large amounts of your living space
- There may be regulations that you need to follow, even in the comfort of your home
Starting a home business can be an effective way to get an idea off the ground. At least, that can happen if you go about the process the right way. Let's go through several key steps you should take if you're wondering how to start a small business from home.
1. Start With a Good Idea
A good business idea is a critical first step of a home business. There are many different ideas that you can turn into a home business, from reselling to starting a daycare, freelance writing, and even playing video games.
The important thing is that you ask the right questions as you choose the focal point of your new company. Here are a few questions to ask yourself as you vet your different business brainstorming ideas:
- What is your UVP? Your UVP or unique value proposition defines how your business offers a solution to a known problem.
- Is your business idea something that works as a home business? Every business is different. Consider in detail if you can turn your business ideas into a reality from the confines of your personal living space.
- Is your idea something that you can remain interested in over time? You don’t have to love your business idea. However, can you stay committed to it over the long haul?
It's important to ask the right questions before investing time and resources into a business idea.
2. Put Your Idea in Motion
Once you have an idea that you know you can run with, it's time to test it. The testing process starts with conducting market research and competitive analysis. Take time to assess things like market size and saturation, demand, and so on.
You can also run your idea through a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to get an understanding of the competitive landscape you’re facing.
As you gain a better idea of your market, consider ways to put your business idea into practice as a trial run without over-committing yourself. If you want to start freelance writing, try it part-time. If you're going to invent a product, create a beta version and offer it at cost or even free to a test group. If you need money to get your business off the ground, consider crowdfunding.
3. Tend to the Logistics
At this point, you have a good business idea. You’ve conducted market research. You’ve got a plan to start trying things out from the home front. Now it’s time to address some of the logistical minutiae of owning a business.
The logistics of setting up a business is where many smaller, home-based business owners can get lost and overwhelmed. But never fear. These are all normal activities, and there are plenty of resources to help you along the way. If you take things one step at a time, you can set the stage to let your business idea thrive.
- Write a business plan: A solid business plan outlines factors like development, finances, and competitive analysis. A business plan can be as simple as a single-page document for you to use. However, if you intend to pursue funding, plan on creating a more comprehensive presentation of data.
- Choose a business structure: Your business structure defines what legal form your business will take. Usually, a home business consists of a smaller entity, such as a sole proprietorship or LLC. If your company grows, something like an S Corporation may become an option. The IRS has a nifty breakdown of common business structures and how they impact things like taxes and liabilities.
- Address the paperwork: Once you have a legal business structure, it’s time to register your business. Registering your business will turn your idea into a legally recognized reality.
In addition, consider if you should purchase business insurance and decide if your particular business structure and model require any licenses or permits in your local region. (You may want to seek legal council to assess this.) Finally, apply for federal and state tax IDs.
- Line up finances: Home businesses can easily bleed into personal life. One of the best ways to avoid this is by setting up a separate business bank account. It’s also a good idea to use your business plan to figure out your initial expenses. Calculate your startup costs and conduct a break-even analysis.
Also, consider if you can afford to fund your home business internally or if you should seek external funding. (Remember, the latter may require a more fleshed-out business plan!)
Addressing the logistics can be the most aggravating part of figuring out how to start a small business from home. Remember, a lot of this is prep work that you only have to do once. If you can stay focused as you dot your “i’s” and cross your “t’s,” things will get easier as you go along.
4. Set Up Your Home Business
Now it’s time to turn your home into a space worthy of hosting such a momentous business initiative. This starts with a quality office space.
If you have an entire room or even an area of your home you can fully devote to your professional activity, it's advisable to dedicate it as a business workspace. Doing so creates a natural boundary between your work and personal life — which is essential for mental health.
Once you select a space, it's time to set the stage. Consider everything, from lighting to ergonomic furniture and even decor.
It's also time to build up the digital side of your new company. As a home business, you will want a solid tech stack to keep you connected to the outside world.
Evaluate what kind of software you need. The software could include CRM software like Salesforce or Zendesk. You'll want a payroll solution, too, such as Quickbooks or Gusto.
And don’t forget your website. A quality site builder, like Bubble, can streamline software integrations and make payment processing easy. If you’re selling online, our builder is also excellent for e-commerce website development. It even comes with perks, like built-in email hosting, that simplify the small business experience.
Launching a Home Business in the 21st Century
And there you have it. If you can follow the four stages laid out above, you'll be able to get any home business idea up and running quickly and effectively. Once you gain momentum, you can consider growth-oriented things like branding, marketing, and even building a team.
While those are exciting steps, you must start the home business process from the beginning. Find a good idea. Conduct market research. Tend to the logistics. Set up your home and digital workspaces.
Once that's done, you can start building your presence as a viable company with the infrastructure to go the distance — even as you work in your PJs from the comfort of your home office.
Bubble is a leader in the no-code movement. Bubble offers a powerful point-and-click web editor and cloud hosting platform that allows users to build fully customizable web applications and workflows, ranging from simple prototypes to complex marketplaces, SaaS products, and more.
Millions of users are building and launching businesses on Bubble — many have gone on to participate in top accelerator programs, such as Y Combinator, and even raised $365M in venture funding. Bubble is more than just a product. We are a strong community of builders and entrepreneurs who are united by the belief that everyone should be able to create technology.