The Benefits of Starting a Home-Based Business

Tired of working for someone else? Fed up with the 9 to 5 routine, a job you have no passion for?

If there’s one thing we’ve learned from this pandemic, it’s that no job is completely secure. Many people who were working before the COVID-19 virus caused businesses to shut down are unemployed. Many will not be returning to work. To make matters worse, many people had only one source of income.

In fact, Yelp came out with a study in July that shows that 55% of businesses that shut down during coronavirus pandemic aren’t coming back.

And that’s why starting a home-based business might be the best thing for people with an entrepreneurial mindset.

Starting a home-based business is a great way to diversify your income and do something you have an aptitude for and are passionate about. A home-based business is rewarding — you get to use your talent to create a lifestyle where you’re your own boss, living your life and running your business on your terms.

Reasons for starting a home-based business

People start a home-based business for a variety of reasons. For some, being their own boss is enough of an incentive to say goodbye to the 9 to 5 routine and enter the world of entrepreneurs. For others, it may be an opportunity to work from home while spending more time with the kids.

But before you dive headfirst into creating your business, assess your professional knowledge, skills, and talents to figure out what service or product you can successfully provide to people. It should be aligned with your strength. And something that motivates you enough that you can see it through.

For example, if you’ve had years of teaching experience, you could start an online tutoring service from your own home, or you could condense textbook information into bite-size e-books that serve as a study guide for high school students. If you have experience in information technology, you could start your own IT business. Do you have a background in editing, proofreading, or teaching English? Then starting your own home-based proofreading service would be perfect for you.

Being your own boss gives you the flexibility of working for yourself instead of for someone else. You get to set a schedule that works for you and your clients.

Say you want to start working at 4:30 am. By the time most people start working at 9:00 am you will have worked four and a half hours already. If you have a client who lives in another time zone, and the work you’re doing for her requires you to talk to her on the phone or through Zoom, you’d have the freedom to set your schedule to a time that’s convenient to her.

Change people’s lives for the better

Another reward of being your own boss is knowing you’ve created a product or service that changes people’s lives for the better. As Jay Abraham says in his classic book, Getting Everything You Can Out Of All You’ve Got, “Always remind yourself of the fact that they are not buying a product or service — they are responding to the advantages your product or services will produce for them.”

If your home-based business involves creating a program that teaches people how to manage their finances, you’re not just helping that one individual; you’re potentially helping a whole family. The individual you’re working with plus his wife and kids, who will all benefit from his having good credit. Wouldn’t you find helping this family rewarding? Wouldn’t it instill in you a feeling of success?

Steps to take to make sure you’re successful

As with any venture you undertake, you want to take steps to ensure your success. Like having a business plan. Something to guide you as you make expenditures and serve as a realistic idea of how much profit you need to stay successful.

Having a business plan allows you to identify your target audience and focus on their needs. This ensures you develop your product or service in a way that meets those needs.

The last thing you want to do is to develop a product only to find out there’s no market for it. A business plan will at least force you to work out the steps you will take to ensure you are successful. By this, I mean, how will you market your product or service; how do you plan on getting prospective new customers; will you need financing, or will you dip into your savings?

If you need financing, a lender will want to see a business plan. They want to know they’ll be able to get their money back. Ask yourself what qualifications, education, experience or ability you have that can contribute to managing the business. You’ll want to list them in your business plan.

Your business plan should also include whatever resources you’ll need, like an accountant to make sure your finances are in order. Since you’ll need to promote your business, you might see a benefit in hiring a freelance copywriter to create marketing copy for you.

How to start your home-based business

If you’re ready to transition toward starting your home-based business, here are some specific actions you should consider taking:

1. Create your business plan

I talked about creating a business plan above, but it’s worth repeating. A business plan is essential to achieving success. You’ll need to decide who you will serve and how you will serve them. A business plan serves as your road map and helps to motivate you to get things done.

2. Plan your finances

Starting a business is a giant career leap. You’ll want to save for it, and it would be a lot easier if you get any outstanding debt under control.

As a business owner, you’ll need to maintain accurate bookkeeping. It can impact how well you manage your small business.

Bookkeeping will help you plan and keep your finances in order as you start to make sales and purchases. As your business grows, you might decide to outsource this part of your business or consider accounting software as an option.

Either way, bookkeeping is a part of your responsibility as a business owner, and if you ever get audited, accurate bookkeeping will save you headaches.

3. Choose a business structure

The Benefits of Starting a Home-Based Business

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As a home-based business owner, these are the options you’ll need to consider: should you be a sole proprietorship, an LLC (Limited Liability Company), or an S Corp?

Once you open shop as a home-based business and sell a service or product, you are by default a sole proprietor. And you don’t have any protection from liability. This can put your personal assets at risk, should you get sued. But for many home-based businesses, this is not an issue, at least when you are just starting.

Most home-based business owners who want liability protection opt for LLC. The benefit of this is that it keeps your business separate from you. That means your personal assets are protected from lawsuits. Another advantage of an LLC is the potential tax savings.

4. Create a business bank account

As a business owner, it’s important to practice good accounting habits. The importance of having a business bank account is that it allows you to separate your personal activities, like money for shopping, entertainment, and vacation, from your business activities.

And if your business is an LLC, you need a business bank account. If you’re a solopreneur, a business bank account is not required, but it’s still a good idea to have it.

Also, having a business bank account makes it easy to see how profitable your business is. It also helps to maintain an adequate record, which becomes important if you’re ever audited.

Another reason you might want to create a business account is that it will help you accept credit card payments. So give this some thought. It could help you avoid some common mistakes.

5. Put systems in place

The Benefits of Starting a Home-Based Business

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Putting systems in place allows you to run your business more efficiently and grow it much faster. Rather than doing everything manually, you take advantage of a number of software programs that let you take care of most activities so your home-based business functions even while you’re sleeping.

It’s having the right systems in place, working together, that lets you attract your target audience and market your product or service to them.

Here are some of the systems you should consider putting in place to make sure your business takes off smoothly:

Accounting Software

There are many accounting software packages on the market. It’s good to look into a few from the outset and choose one with features that make bookkeeping easy. Ideally, you’d want one that offers expense management, payroll, and invoicing. In other words, you want to track everything, including that meal you had with a client or business partner.

Email Marketing

As a small business owner, you’ll want an email marketing tool that’s geared toward small to medium-sized businesses. Keep in mind that the right email marketing service is the one with the features and benefits that’s right for you. The goal is to be able to communicate and develop a rapport with your customers. MailChimp and Drip are a few of the email marketing software that will help you communicate with your customers.

Marketing

To optimize your business, you’ll need to have a process for acquiring new customers. How will people learn about your product or service? The answer could be direct mail, content marketing, or going to events. It could mean advertising on Facebook and Google, which means paying for ads. But you’re a business person and running a successful business includes making expenditures.

However, there is software that can simplify the process and help you make the most of your budget.

Project Management

As your business grows and you start getting more customers, having a system in place that helps you manage projects and tasks will make your life easier. Keep in mind that there are pros and cons to any project management software. Look into a few to see which is best for you. Some established software products are Asana, Basecamp, ClickUp, and Trello.

Website

As a business owner, a website is an essential tool. Whatever product or service you’re starting your home-based business around, you need a professional website. Your website should be built on a platform that not only lets you handle tasks easily but also lets you manage the look and feel of it. Choose a responsive theme that fits with what you’re doing.

Whichever processes you put in place should work in tandem as much as possible. For example, you attract your target audience with content marketing or paid ads then use email to nurture the relationship.

Putting the right systems in place allows you to accomplish the three laws of growing your business, as put forth by Jay Abraham. According to Jay Abraham, there are only three ways of growing your business.

  1. Increase the number of clients
  2. Increase the average size of the sales per client
  3. Increase the number of times clients return and buy again

When you automate your workflow, it makes your job easier and puts you in the position to make the most money, which is part of the reason for starting a business.

6. Join your local Chamber of Commerce

Consider joining your local Chamber of Commerce and go to networking events. When you join a chamber of commerce, your business gets listed on the Chamber website directory, which gives you exposure.

And by going to networking events you’re able to collaborate with other members and refer clients to one another. You can even advertise and sponsor events.

Want to upgrade your skills? Chambers offers online and in-person courses for members and nonmembers.

7. Get active on social media

As more and more businesses are going digital, having a social media presence for your home-based business is a must. Join the groups your prospects are in so you can learn more about their challenges and be better able to make social media one of your sales channels.

People spend an enormous amount of time on social media. For example, Facebook has over 2.7 billion active users.

Set up a Facebook business page; you’ll need it if you want to run ads. Post content regularly to your page. This shows you’re active and ready for business.

If you haven’t already joined LinkedIn, join it now. LinkedIn is considered the most important social media platform for business people, especially those who are in B2B. Once you have a presence on LinkedIn, you’re able to connect with other business professionals and build relationships.

Summing Up

Are you ready to join the growing number of people just like you who are starting their home-based businesses and helping their customers achieve positive transformation in their lives? Great. Start by figuring out what kind of clients you can serve and what outcome you can get them. Put systems in place that can help streamline the process for you. And spread the words to your friends and colleagues that you’re open for business.

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Author: Terrence Blair

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