You trust your creativity, decision-making skills, and organizational prowess enough to take matters into your own hands. You’re a natural leader, constantly taking initiative in whatever job is in front of you.
Now, you want to take the leap and start a business of your own. Not only that, you want to do it from the comfort of your home. Amazing. Good for you. Here, we’ll detail exactly what it takes to start a successful business from home and provide a few tips on how to safeguard your profession. Ready?
Let’s do this.
How to start a business from home
Whether you want to work from home because it’ll save money on an office space or because you can’t get enough of your favorite chair, here are the steps you’ll need to take to make it work in starting a business:
- Assess your skills and talents
- Generate a business idea
- Decide if your business can be home-based
- Determine its profitability
- Create a business plan
Let’s start with #1.
Step 1: Reflect upon your skill set
Before you make any purchases or client calls, you must first assess your skills and talents. As you will be your only employee (for now, at least) you need to make sure that you are the best fit for the business, and that the business is the best fit for you.
To start, you’ll want to determine if you have the typical personality traits of a successful business owner, like:
- A mind for budget
- A focus on goals
While talents and natural inclinations are important, you’ll also need to have the skills required to fully operate your one-person business. Important skills for all business owners are:
- Basic computer skills
- Financial management
- Time management
- Problem solving
- Strategic planning
While those are the core skills of any self-employed trailblazer, your specific business idea will change if you have any of these skills: Computer programming Engineering Writing Painting or illustrating Crafting or tinkering Social media Graphic design Accounting Marketing While the list goes on and on, be sure to fully acknowledge all that you know and all that you don’t know. If your passion lies beyond your skill set, all is not lost. You can always go back to school or take online classes to learn the craft. If your skills and business of choice align, the next step is to generate an idea.
Step 2: Use everyday problems to come up with a business idea
Sometimes, the best business ideas come from the smallest problems or pet peeves. Is there a problem you want to solve or a gap in a certain target market that you want to fill? The best way to make products and services for the world is to engage with the world.
Go on a walk and keep your eyes and ears open. What do you notice? What do people complain about? What do you wish was better? The answer to these questions could be your next business idea.
No matter what, your skills and talents are the foundation of your business. By combining them with your desired problem area and market, you will find the right business for you.
Step 3: Pick the idea that fits your intended lifestyle
Even if you find the perfect idea, you can’t always thrive from home. There are a few factors that can help you determine if your idea works as a home-based business:
- Your family’s needs
- Your at-home work space
- Work style
- Zoning laws
- Legal restrictions
For example, if your job requires an intensive manufacturing process, you would need to either outsource or run your operation from a warehouse. If you need to meet with clients in person, perhaps an office building may be the better choice for your headquarters.
Step 4: Identify your business’s revenue streams
For any business, you must consider whether it will actually be profitable before moving forward. To do so, answer the following questions:
- What is the available market size for this product or service?
- How much will people pay for it?
- How much can you charge and what will your margins be?
- What are the start up costs to produce your product or service?
- Will that generate a sufficient income to maintain the business and your livelihood?
- Will that income be enough to grow the business?
Take time to answer these questions and determine whether this is a business structure that can truly take off and thrive. While most businesses have a period where they don’t generate profit, they must eventually start making money to survive.
Step 5: Finalize your thought process with a business plan
Designing a thorough business plan is essential for keeping yourself on the right track and aligned with your goals.
Be sure to include:
- Executive summary of the business
- Market research
- Competitive analysis
- Customer discovery
- Sales and marketing plan and strategy
- Financial plan
- Operating plan
With careful research, planning, and constant self-assessment, your business will have a higher chance of success.
Bonus step: Get insured
Even if you are working from home as your only employee, you will still need to protect yourself against third-party claims.
Here are some of the main types of small business insurance you may want to consider:
General liability insurance – General liability insurance protects you against claims of third-party bodily injury, personal and advertising injury, and property damage. If a client stops by your home office and injures themselves on your premises, a general liability policy can help protect you from liability.
Professional liability insurance – Professional liability insurance, also known as errors and omissions insurance (E&O), will protect you in cases of negligence, breach of contract, or when bad advice leads your client to suffer a financial loss.
Depending on what type of business you have, you may want to consider insurance policies that cover any damage to your car, bodily injury to your employees, or damage to your own property. Here are some options:
- Auto insurance
- Workers’ compensation insurance
- Commercial property insurance
As an at-home small business owner, you have to wear every hat. From being the business’ accountant to the CEO-in-charge to the intern who fetches the coffee—it’s all you. So, for some peace of mind, let Thimble help you tackle the beast that is insurance. We offer on-demand coverage that is designed for small businesses, just like yours.
Pay by the hour, day, or month, and see just how easy insurance can be.
So you’ve started a company from home. Congratulations! The key moving forward is to dedicate yourself to your endeavor and pick yourself up when you fall. While a home-based business will give you the flexibility and decision-making freedom you desire, it will also require tremendous commitment and effort. Commit to learning, observing, and working hard, and you’ll be on the right track. Go get ‘em.