However, starting a business (virtual or otherwise) requires a fair amount of planning, funding, and time commitment. To help you navigate this process, we’ll discuss the key steps to start a business from your home, including how to find a suitable business idea; the steps to plan your business operations; how to name your company; and how to register your business. We’ll also answer some frequently asked questions about home businesses.
Decide on a Business Idea
Having a strong business idea can make or break your chances of success. That’s why it’s crucial to come up with a solid business idea that gets you excited and suits your strengths. Here are some steps to help you find a timely, relevant, and suitable product or service idea for your new home-based business.
Lean on Your Past Experiences
When coming up with a fresh business idea, looking back at your life can help. Some questions to you may want to answer include:
What motivated you to choose your career path so far?What did you dislike about your last job?What excited or fascinated you in school?
This self-assessment can help you understand where your strengths and interests lie. Once you start brainstorming your passions, you will begin to notice a theme. Maybe you have always liked music, or maybe sports is more your thing. Lean on these experiences to choose a business idea.
Create a Skill List
If you are having trouble identifying your interests, consider creating a skill list instead. A skill list, as the name suggests, is a list of all the things you are good or even proficient at. Having a skill list can help you narrow down your ideas. For example, if you identified math as your passion during your self-assessment and notice (through your skill list) that you are good at managing money and talking to people, one potential business option could be starting a financial consultancy.
Talk to Your Family and Friends
People are at all different levels of self-awareness, so identifying past interests and skills can be challenging. To get a different perspective and help you move forward, it can be beneficial to talk to your family members and close friends. They may be able to point out the talents and skill set you hadn’t considered before.
Refine the Idea
Once you have narrowed down a few strong business ideas, it’s time to see if these are actually viable in the market. Launching and operating a remote business calls for different ways of strategizing and testing your ideas. Whether you intend to sell a product or service, here are several questions you should ask yourself when you’re at the idea refinement stage:
Is there a market for this idea?Are people willing to pay for this product or service?How much competition is there in the market?Can I find customers online?Does this idea have enough demand for me to make a profit?Can I make more money on this idea than what I’m investing?What will be my key expenses?Will this business cost more than running a brick-and-mortar company?Is this business complex enough to require a staff, or can Imanage this venture solo?Can I do this full-time?Is this idea legally valid or is it infringing on copyrights, patents, or trademarks?What are the legal permissions and documents I need to run this business?Will I need any special licenses to operate from home?What tax documents will I need?
Answering these questions will help you refine your idea enough to understand if your home-based business idea is viable and has the potential for success.
Come Up With a Business Name
After refining your business idea, it’s time to decide on a business name. Here are some tips to come up with a memorable name:
Find something short and easy to pronounce.Look for words that define your business (for example, Dunkin’ Donuts).Don’t pick a common word; make it memorable.Avoid using your own name, especially if it’s common (John, Jack, Kate, etc.)
Create a Business Plan
Planning your business can be a long, complicated process, but this time investment can be beneficial in the long run. Creating a business plan before launching your home-based company can provide an effective roadmap for growth. Having a business plan helps you find funding, set marketing goals, and track spending and revenue. It can also simplify your operations and help you find weak spots in your launch process. Here are a few key questions to consider when creating a business plan:
How can you set up an operations base at home? Will you have a dedicated space for work?What will your taxes look like? For example, will you take a home-office deduction?How will you fund this business? Will you rely on your savings or seek external funding? If so, what methods of funding should you seek?What will you do if you run out of money? Will you have an emergency fund?If you’re handling business operations yourself, how will you manage your time?
These questions will help you define how you will run your business and how to plan for potential setbacks.
Choose a Business Structure
Once you start making money, defining your business structure will become important. Will you operate as a sole proprietorship business or will you register yourself as a limited liability company (LLC)? A sole proprietorship typically requires less formal documentation, a simpler taxation system, and you’re entitled to all the profits. An LLC, on the other hand, requires more paperwork, but can be eligible for more funding options, and perhaps most importantly, you are not personally liable for business debts and liabilities—the LLC is. The structure you choose will depend on your current and anticipated business goals and your plan to scale or eventually sell the company. For instance, if you want to scale your company rapidly and need significant funding, it may be better to opt for an LLC model so you can receive small-business loans.
Register the Business
When you have finalized your business plan and decided on a company structure, you can typically register your business by simply registering your business name with a state or local government office. Many states require you to register with the secretary of state’s office, and some may require you to get a federal tax ID for government records. According to the U.S. Small Business Administration, in most cases, the total cost to register your business will be less than $300, but fees vary depending on your state and business structure. Another option is to provide digital services like writing, social media marketing, virtual assistance, graphic design, or website development.
Dropshipping shopContent writingTeaching/coachingYouTube/Patreon courses
Announce your business on your social media channels to reach followers and potential customers.Offer referral discounts to existing customers so they can bring you new customers.Attend virtual networking and marketing events to meet like-minded people and build a community around your products and services.
