Whether you’re good with numbers, crafty, organized, or a great cleaner, when you have a true skill, something that other people will pay you to do, starting a business is the next logical step.
“When I first thought of starting, I was certain there was someone else out there doing the exact same thing, but it turned out there wasn’t,” bookkeeper Sarah Williams told LogoJoy. “If you have a skill that you think could help other people improve their business or lives in general, then go out, share it and make money in the process!”
You can easily start a business out of your own home, which offers great flexibility and freedom that you didn’t have at your 9-to-5 job. If you’re creating a service-based business, it gives you opportunities to work with clients while perfecting a hard-earned skill.
But home-based businesses come with their own challenges. Since you’re based in a residential sector, you won’t get passing traffic or the perks of joining the Chamber of Commerce. You have to do all the legwork on your own, and if you have the right tools, you’ll be well on your way to success.
1. Set Up a Secure Email
Email security is more important than many service-based businesses realize, particularly if you’ll be communicating sensitive information like payments or addresses with clients over email. If your email isn’t properly encrypted, hackers that target small businesses can easily access the information.
Most home-based business owners start with a free email provider like Gmail. It’s a great way to cut costs, and it offers a lot of business-friendly benefits. You don’t have to pay for a commercial email account, but you should encrypt your Gmail to protect your personal and customer information.
2. Name Your Company Quickly
Believe it or not, your company name isn’t the most important part of starting your business.
“Many people agonize endlessly over dreaming up the perfect company name. Don't. If you're waiting until you come up with the perfect name, you're also waiting to start making money,” warns Jeff Haden of Inc.com “Instead, at least for now, forget branding and unique selling propositions and all the business-identity stuff…Just pick a name so you can get the administrative ball rolling.”
Choose something that will identify the services you offer. For example, a company that offers graphic design might name their company “Smith’s Creative Design.” This eliminates confusion and creates a simple formula for naming your business so that you can move on.
3. Get Organized Financially
Cash flow is a very common problem for new businesses. In fact, 82 percent of small businesses close prematurely due to cash flow issues. Most entrepreneurs prioritize generating enough investment capital to get started, but they fail to stay organized while running the business.
Missteps in financial organization can be detrimental to your business. Purchase an accounting software like Zoho or FreshBooks so that you can monitor your spending, set savings goals, and stay on budget. Overspending at the start of your business could mean disaster.
4. Be Ready for Tax Time
There are excellent tax benefits for home-based businesses, including the ability to deduct monthly expenses for utilities and the cost of your “office space” from your mortgage payment. However, you should also be prepared for self-employment tax (if applicable) and quarterly payments.
Business owners must pay taxes every three months. You’ll pay based on your estimated income, and you don’t always know how much that will be ahead of time. Having a little cash on hand is imperative for making those payments.
"You need to hold on to some of your money," Lisa Greene-Lewis, CPA and tax expert for TurboTax told BusinessNewsDaily. "You should pretend you don't have that much money, because your income varies so often. You have to think about paying your taxes."
5. Use Social Media to Spread the Word
Home-based businesses can’t survive without the internet, and social media will be your best marketing tool. According to research, word of mouth marketing is the most powerful form of marketing with more than two-thirds of customers using the advice of others, even complete strangers, when making a purchasing decision.
You don’t need an account on every social media page—just the ones that are most relevant to your business. Facebook and Instagram are ideal for most businesses, since they’re the two most popular platforms. Pinterest can be useful for bloggers, crafters, and home improvement specialists while Google + may be best for a service business like a plumber.Your home-based business is your ticket to success and freedom in the working realm, but plan carefully. The steps you take now will determine your future.