Establishing a Home-Based Business follows the same principles and ideas that are similar to Starting a Small business due to the reason that it is easier to set up, not as risky as other types of business structures, and neither does it break the bank for your start-up capital. Utilizing the extra space that you have at home saves money which you can use to purchase materials or equipment you need to start running operations and avoid the inconvenience of looking for commercial places, rental costs, and skip out on licenses or permits that would normally be required for a traditional business set up.
However, this doesn’t mean that home-based businesses don’t have their own challenges. It requires a lot of effort, time for research and planning, as well as your commitment and determination.
Here are the steps on How to Establish a Home-Based Business:
Given the plethora of business ideas that are produced each day, one could easily get lost in a sea of thought, thinking of which kind of business to choose from.
There’s the temptation to be a part of the bandwagon when a bubble pops-up and results vary with a lot of possibilities including failure. In this case, it would be wise to consider the “Hedgehog Concept” or principle by Jim Collins. This is to help you in deciding whether the business is for you. Give an honest answer to the following questions:
Is this business something that you are passionate about?
Is this business something that will economically work for you?
Is this business something that will economically work for you?
By carefully taking the answers to these questions into consideration, you will be able to determine the one thing that you do best and focus on your strengths and skills to start up a home-based business. In case you are not sure about the things that you do best, using the following techniques or approach might help (You may also use the following techniques in improving your business, including your products, and services if applicable):
It is important to strike a balance between the things that you are passionate about and what you are skilled at while ensuring that your business will be sustainably profitable.
In order to determine the viability of your idea for a business, calculate the projected costs by taking the following steps:
List down everything that your business requires including materials for inventory, equipment, other resources including manpower if the business requires having employees.
Calculate the cost to project a rough estimate of the funds you need as capital for your home-based business.
Planning Your Business
1
Process Market Research and Feasibility
Strategizing a plan for your business to succeed won’t be possible without working on the numbers. You will need these in progressing to the next step of writing your business plan.
Going through this process ensures a higher rate of success for your business by going through the following steps:
Understanding Customer Needs
Knowing Your Competitors
Calculating Risks
Identifying Your Niche Market
NOTE: The data and statistical information collected from your research will be used for writing your Home-Based Business Plan which adds credibility in your presentation.
2
Write A Business Plan
After honestly evaluating yourself in reference to the “Hedgehog Concept” by Jim Collins and estimating the total cost of starting your home-based business, it only makes sense that you should work on a Business Plan. This clearly states what your company is about as well as the products and services that you offer in line with your mission statement.
Your business plan will also serve as your portfolio for presentation and you can use it as a marketing tool to attract possible partners and investors in your home-based business.
Start Business Operations
1
Invest in Your Business
Investing in your home-based business to acquire the equipment, supplies, and other non-negotiable expenses which are necessary to start operations is a must. Let’s just say that you are running a food catering business, some of the initial and necessary expenses that you would have to invest in are as follows:
Tools of Trade: Pots. Pans, Cutlery, Cook Top, Oven, and other related equipment
Dedicated Phone line and Internet Service Provider
Point of Sale System (POS)
If the financial resources that you have are not enough, your well-written business plan will come in handy for your presentation as you look for investors or partners in your venture.
Opting for a loan is also an option but depending on your business structure, you may have difficulty in securing funds from financial institutions if you are operating as a sole-trader.
In order for your Home-Based Business to legally operate without impediments, make sure that you address all administrative, technical, and legal aspects of your business.
Be sure to check with the association of homeowners’ in your neighborhood to avoid issues and complaints. Also, remember to do the following:
Assuming that you have taken care of EVERYTHING that you need to operate your business, start a soft launch with family and friends for the purpose of receiving honest feedback in improving your products and services. After taking people’s suggestion to consider, make the necessary adjustments and do the following:
Market Your Business by establishing a strong online presence. You can do this by putting up a website and utilize search engine optimization. You can also use social media to your advantage by marketing your business on Facebook, Twitter, Instagram, and Registering your business on Google.
Continuously Improve your products and services by taking customer’s comments, suggestions, and criticisms. By doing so, you will be able to establish a strong brand, develop a niche market and establish a customer base.
