Step 1: Determine what products or services your small business will offer

Start your home business. Credit: Thomas Barwick | Getty Images

Before you start a home business you must know what products or services you want to offer. To determine what’s best for your business consider the following questions:

• What do you have to offer?
• What makes you an expert? 
• Do you have all the education and skills you need to compete successfully in the market or do you need training?
• Does the product or service you are considering meet the needs?
• Is this a seasonal product or service or can it be sold year-round?
• Is it a fad or something that will last over time?
• How sensitive is the marketing of this product or service to general economic conditions? When the economy weakens how do you think your business will be affected?
• Are you passionate about or enjoying this business idea? While money is good it’s not enough to propel you to success. You also need to be enthusiastic about your proposal.

As the saying goes do what you love and love what you do and it should not be taken lightly. Your business will be your livelihood so it should be something you believe in and/or enjoy. One benefit of doing this is that you can turn a hobby into a business. If you choose an idea that you are not interested in Sometimes it’s hard to gain momentum.

Step 2: Know Your Market and Competitors

Knowing your target market will save you time and money in home business promotion. Alex Slobodkin | Getty Images

While you need to have a great product or service without a buyer you still don’t have a business. Knowing what your market wants and needs and what motivates it to buy is critical to your success. This means discovering your target market and identifying your unique selling proposition How your product or service differs from other similar products or services. Here are a few points to consider:

Who will buy your product or service?

• What characteristics or characteristics does your typical client or client have? Everyone is the wrong answer. What kind of people need what you have to offer? Middle-income mom? Baby boomer men?
• Will you market the business to consumers or both?

What Is Special About What You Offer?

• Is there an unmet need for your product or service or is there another business offering it? If there are several others?
• How does your product or service differ from your competitors? Are you faster cheaper more service-oriented etc.?
• How does your product or service meet the needs of your target market? What benefits do they get by using it.
• What is your value proposition? What is your competitive advantage?

Use all this information to develop a marketing plan outlining how you will let your target market know about your business.

Step 3: Make sure you can do what you need to do

There are many things to do to start a home business. In addition to tasks there is the ability to deal with trouble and frustration fatigue and slow results. If you can’t get things done or follow through when things get difficult then a home business might not be for you. To make sure you have stamina To be successful answer this question honestly: Can you handle the day-to-day general tasks required to start a small business such as:

• supplying product/service
• distribution of product
• invoicing/billing
• setting appointments
• ordering supplies
• bookkeeping
• marketing
• filing
• answering the phone
• checking and replying to e-mail
• manage energy levels
• deal with disappointment
• manage overwhelm

You can delegate some of these tasks to a virtual assistant but many home business owners are individual entrepreneurs starting out on a limited budget and have to put on all their business hats. If you plan to start on your own make sure you have enough stamina to do it until you can hire help. it helps Learn how to prioritize and manage time.

Step 4: List what you need to do to get started

What do you need for your home office? Rob Melnicchuk/Getty

Any task or project will be much easier to complete if you have all the supplies and a place to work. Before starting your business you need to consider the following:

• Home Office: To work undisturbed a separate space with a door is recommended. Also if you plan to deduct home office expenses you will need to use this space exclusively to run your business on a regular basis.
• Converting Spaces: If your home office will be in a room garage or loft that requires building or changing spaces how and when will it be done.
• Space for inventory supply records and/or equipment. Consider whether climate control is required.
• Power requirements such as additional outlet power strips etc.
• Second phone line: While many people use cell phones today a second business phone line separates personal and business and allows you to have other business-only connections such as fax and internet.

When you decide what you need keep track of your estimated costs as you’ll need them later in this exercise.

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• Home Office Ideas – How To Set Up Your Home Office

Step 5: Understand the risks and benefits of the legal form of business organization

Before you start a small or home business it’s time to learn about the various legal forms of business organization. Will you run your business as a sole proprietorship limited liability company (LLC) S corporation partnership or full-fledged C corporation?

The easiest and cheapest option is a sole proprietorship but to best protect your business while still being affordable is an LLC. You now need to research the issues surrounding all forms of business structure as your decisions will also affect your start-up costs as your tax status and your personal responsibility for business actions and debts. Use the IRS’s website for free tax information on various legal forms of business organizations.

In the end your decision on which legal form of business organization you will use will largely determine what steps you need to take to set up your business when you are ready.

Step 6: Find out the legal requirements for running a home business

Consult an attorney to keep your home business in legal order

While it’s tempting to open a store and start selling right away most regions have rules for running a home business. Failure to follow these rules can result in fines and forced store closures. Here are some legal issues to consider:

• Check your zoning laws before starting a small business. You can usually get an exemption if you don’t have signs of using toxic materials or seeing clients at home. If you rent out any premises also check your homeowners association’s covenants and restrictions and your rental agreement Restrictions on Home Businesses.
• Contact your city or county to obtain a business license. Most regions have business license requirements. Usually it’s affordable.
• Contact your state’s occupational regulator to find out if your business is regulated and requires additional permits or licenses. For example most businesses that involve grooming (people or pets) financial help child care and food are state regulated and you may need a license.
• If you sell tangible goods obtain a sales tax license from your state’s tax department or auditor general’s office. This allows you to collect and pay sales tax.
• Get a business bank account. The IRS doesn’t want to see your personal and business funds mixed up.
• Consider obtaining an Employer Identification Number. While not required in a sole proprietorship it is necessary if you employ people. It’s free and the advantage is that you can use it instead of your Social Security number for business-related paperwork.
• Protect your intellectual property. If you invent or create something you can protect it with a patent trademark or copyright.

Step 7: Review Your Home Business Insurance Needs

Protect your business.

When you start a business you can put your home and your family at various risks. You need to think about how to manage these risks and determine whether you need small business insurance to help deal with them before it’s too late.

Consider these insurance needs:

• Health Insurance: Self-employed individuals have a variety of health care options. The key is to find the option that works best for you and your family.
• Additional Home Insurance for Businesses: Your regular homeowners insurance may not cover expenses associated with a home business. Check your policy and/or contact your insurance company for information on making sure you can recover from your business if your home is burned down flooded or looted.
• Liability Insurance: Are you covered if someone falls in your office or suffers other injuries as a result of your business? Also find out if you should get error and omission coverage.
• Car Insurance: If you use your car for business you may need additional insurance.

Remember your homeowners and auto insurance policies are not designed to cover your home business. Small business insurance can be a significant expense but it’s cheaper than litigation or recovering from damages caused by a fire or other catastrophic event.

Document any small business insurance cost estimates for this step – you will need them to determine your startup and operating costs.

Step 8: Determine your startup costs and funding sources

Starting a home business requires some investment

While you can start a home business on a budget it’s unlikely you’ll be able to build a profitable business without incurring some expenses. Calculate your startup costs – the amount of capital needed to open a store. It’s okay if you don’t know the exact cost but you want to get as close as possible Maybe even overestimate the cost. The following are common start-up fees:

• Professional services such as lawyers or accountants.
• Office furniture or equipment.
• Supplies and materials needed for your product or service.
• Inventory.
• Business licenses and other fees (i.e franchise fees permits etc.)
• If you need to build or change a room to create a home office you will need to pay for the construction.
• Website fees; domain hosting website design (if you hire a professional designer).
• Business cards and other printed marketing materials.
• Other items specific to your business idea.

Once you have your list look for ways to cut costs and fund your business without going into debt. For example do you have access to the computer and printer you currently own. Can you barter your website design?

You need to also consider:

• How much bills will you have to pay before money starts coming in from your home business?
• Will you keep your full-time job or will there be another breadwinner at home who can help you until you develop an income stream?

As you get closer to starting your business record expenses you didn’t expect and add them to your list.

Finally because it takes money to make money find sources of funding for your business that ideally won’t put you in debt.

• Where did the initial investment come from? savings? Sell ​​assets?
• Do you need a silent partner to help provide working capital especially before you hit break-even and start turning a profit?
• Are you willing to use your home equity to finance your business?
• Are you eligible for a loan? Check your city and state’s business resource website as many places have programs to help small businesses. Can you also check out SBA loans from the U.S Small Business Administration?

Step 9: Calculate ongoing income and expenses

Develop a system to track income and expenses. Credit: Glow Images | Getty Images

Not only do you need money to get started but you need money to stay open. The goal is to earn enough revenue to cover your operating expenses and make a profit. Here are some additional funding issues to consider:

• What will be your ongoing expenses for items such as equipment service wages and/or inventory?
• How many products do you have to sell or how many hours of service do you have to break even (your income equals your expenses)?
• What is your target profit and how do you earn it?
• Have you run the numbers to determine the ideal pricing for your product/service?
• See the ways you can continue to run your business within a budget for more profit.

Step 10: Measure your family’s support for your home business

Include your family in your home business goals.

Your family’s support is more important than you think so don’t give up on this step.

Running a home business is not done in a vacuum. Your family members may need to make sacrifices or lifestyle changes to accommodate your business. So they need to know what you are doing and how it might affect them. If you have a spouse or significant other or children Living with you your home business will also be an important part of their lives.

Communication is key to helping them understand what you are doing. Explain your intentions and goals to them. If they are interested make them part of the process. Seek their support instead of expecting or demanding it. If they have concerns try to understand where they are From (where. Answer their questions or objections discuss them openly and calmly. If they are resistant there are many things you can do to involve your family in your home business goals.

Couples who plan to start a business together need to have a good idea in advance if they can work together. It’s a good idea to discuss who will be responsible for specific tasks. If you can’t agree on this now chances are you won’t agree on it later.

Don’t let your business compromise your family relationships. A stressful family situation is bound to manifest itself in your business activities so make an effort to work with your family to develop routines and systems to make your home business and home life successful.