8 Steps to Take Before Starting a Home Business

8 Steps to Take Before Starting a Home Business

You’re tired from the 9-to-5 grind and you want to take control of your life — so, what’s better than starting your own business right at home? It sounds like a brilliant idea. And, if you can make it happen, it’ll be a dream come true.

Before you get to live your dreams, you need to prepare yourself for what’s to come. There are a lot of boxes to check and items to cross before you’re in business. Your business model, the law around it, taxes to pay, and more.

Fortunately for you, here’s an 8-step guide that’ll walk you through from wanting to work at home to actually working at home. Let’s get started!

1. Come up with a business idea — and everything that it entails

The very first thing you need is an idea. You need to figure out what you can sell, who you can sell it to, and how you can sell it. You need:

  1. A product or service
  2. An audience
  3. A marketing strategy

These three things will define your business from beginning to end. The right product with no audience will give you no money. The right audience with no product is the same thing.

The most profitable home business ideas are the ones who have these two elements in perfect sync — and connected through the right marketing strategy.

2. Separate the home office from your home

When you’re starting a business from home, you need to separate the business from your home. And it’s a lot tougher than it sounds.

You need to designate an area outside your bedroom to work in. If you get a call related to your work, you go to your home office. If you have to stay up late working with your computer, go to your home office. Don’t break this habit and don’t let work spill around your house!

Otherwise, your home will start to feel like your office — and you won’t be able to escape work. That will lead to burning out and quitting. You don’t want that!

3. Figure out the logistics

There’s a difference between successful home businesses and the rest. And that’s the logistics.

Logistics is simply how you get your product from the manufacturers and how you get it to your customers.

For example, let’s say your home business idea is buying toys from a Chinese wholesaler and then selling them as a retailer. How are you flying them from China? How are you delivering them to your clients? That’s the key behind logistics.

Figure out the best routes to get the toys from China to America. If you don’t have one plan and three contingencies, you’re bound to fail. Create a Plan B for delayed Chinese shipments. Make a Plan C for delayed deliveries to your customers.

This may sound advanced — but you don’t want poor logistics to kill your business after you invested a lot of money.

If, for example, a customs issue brings down your entire logistical plan, your business goes belly up overnight. You need to be ready to avoid that before you start.

4. Sort out the legal requirements

Following up with the toys example. Let’s say the law forbids you from selling Chinese goods in your home state. That kills your home-based business right from the get-go. You need to learn about legal limitations before you invest your money into your idea.

So, you need to learn the law to avoid problems with the law. A great way to do this is to consult with a lawyer. If that seems too expensive, you can hit the books yourself — and try to compliment your work with online research.

5. Calculate your taxes

Once you figure out the law regarding your soon-to-be home business, you need to figure out the taxes. It always hurts to see how much the government is going to take — but you have to do it as soon as possible.

Not knowing how much you need to pay in taxes could prove lethal for you.

For example, let’s say you invest $100. After your hard work, you get $120 — so, that’s a $20 net win. But, before you can enjoy your money, the IRS says you have to pay $25, leaving you in the red. You should’ve never invested money in the first place!

Taxes could kill a business idea that seems profitable. You need to be aware of that. Talk to an accountant before the money starts going out — or it might never come back in.

6. Open a business bank account

Doing business from home doesn’t mean you can use your home account. You need to separate your business finances from your home finances. That’s a rule you cannot break.

If you have a legal issue, your business account will be frozen — but your home account will be safe from harm. If you’re out of funds, they can’t take anything from your home account.

You need to create barriers just in case.

7. Create a short- and long-term business plan

By the time you have the product, the audience, the marketing strategy, the legal knowledge, and the tax calculations, you’re ready to truly start working.

Everything that you’ve done so far were preparations for what’s to come. Before you start making plans, you need to think long and hard if your business is viable.

If it is, start home business planning!

You need a 3-month, 6-month, 1-year, and 5-year plan. They should all complement one another.

The 3 months and 6 months plan should be about establishing your businesses. The 5-year plan is about your long-term goal. Everything in between is how you bridge it all together.

8. Manage your expectations

Once you have everything in place, settle down and breathe. You need to brace yourself for unexpected twists and turns of fate.

Work to fulfill your 3-month plan — but, if you come short, there’s nothing to worry about. You can always readjust your goals and keep moving forward.

You could also fail. What you thought was an at-home-business-opportunity turned out to be an at-home-failure, it happens! By trying and failing, you’ve gained the experience to succeed in the future.

In one year, you either made some money or gathered experience. Either way, you’ll be ready to reinvest one of them for your business! Success isn’t about being right from the start, it’s about continuing to try even when you’re not.

By Admin