Have you come across unique products that would fit into a market niche? Or maybe you want to work with a product company to develop and distribute their goods.
The first step is deciding on the right home business idea that is both profitable and feasible. This step is crucial as it will influence everything that comes after it.
1. Research Your Niche
When considering starting a small business from home, it is important to research the potential market niche. This research will help you determine if there is a large enough potential customer base for your business to be profitable.
A good idea is to choose a niche that will address real-world problems that many customers face on a daily basis. This will make your products or services stand out from the competition and attract a loyal following for the long-term.
It is also a good idea to study your competitors’ marketing strategies, product offerings and pricing. Analyzing the competition can also reveal weaknesses in your niche market that you can use to your advantage. This will increase your chances of becoming a successful entrepreneur. However, finding a truly untapped market is very rare.
2. Plan Your Marketing Strategy
A marketing strategy is crucial to your business success. It helps you identify the market needs your product or service meets, how it differs from competitors, and who your target audience is.
Your marketing plan should include SMART goals, which are specific, measurable, achievable, realistic, and time-specific. For example, one of your SMART marketing goals might be to increase website visits by 5% in six months.
Start by writing down your business mission statement. Then, consider your resources. Do you have an email list or social media following that could help with your marketing efforts? What about an existing client base that you can tap into for repeat business? Also, make note of any previous or current marketing strategies you’ve tried. This will provide insight into what works and doesn’t work.
4. Get a Business License
Most businesses require business licenses, which are permits issued by governments that authorize an enterprise to function within a specific jurisdiction. These permits can vary by location, product and service offered. They may be required by federal, state, or local governments and often have strict regulations.
Getting all of your licensing squared away from the start can save you from being shut down later due to violations. For instance, you can use the Business Wizard website to determine what kinds of permits you might need.
However, the amount of time that it takes for a business to receive its license can depend on several factors. For example, some industries like construction, farming, dry cleaning and vending have industry-specific laws that can add extra work to the process.
5. Get an EIN
An EIN is the business equivalent of a personal Social Security number. It’s required for corporations, S corporations, some non-profits and many limited liability companies (LLCs). An EIN is also sometimes needed to apply for a bank account or credit card and when reporting taxes, including submitting 1099 forms to contractors and filling out tax paperwork like W-2s.
Even if you’re a sole proprietor or single-member LLC classified as a disregarded entity with no employees, getting an EIN is a good idea to help keep your personal and business records separate and protect your personal assets in the event of litigation. It can also speed up the process of filing taxes or obtaining loan applications because it’s easier to locate than your own SSN.
6. Get a Bank Account
A business bank account is a must if you want to make and keep your business running smoothly. It separates your business finances from your personal ones, and it’s more professional than asking customers to pay with checks made to you personally.
Depending on your type of business, you might also need a savings or credit card account. Regardless, you’ll need to supply your business name and EIN when opening the account, and most banks will require you to have a valid driver’s license or passport as well.
When looking for a business bank account, take your time to compare the options and fees. You might find that a simple checking account is enough for your small business, or you may prefer one with added technology tools like mobile check deposits.
7. Hire an Attorney
The right attorney can save you a lot of headache and expense at the start of your business. They can help you determine the best entity type for your company and provide guidance in preparing for compliance issues.
If your business has growth in mind, they can assist you in creating a plan to expand the business. Expanding a business has its own set of legal issues that need to be addressed such as valuation, agreements and transfers.
Some of the most profitable home businesses center around a professional service such as a bookkeeping, research or consulting service. Those who can commit to building a loyal following may find this to be one of the most satisfying and rewarding ways to make money from home.