You are thinking about starting a business. You have been asking lots of questions and looking at your job from a different vantage point. The vantage point of an owner and not of an employee.
You are looking at their contracts, wanting to understand their customer service department. You even volunteered to work overtime in the fulfillment department and came back with a legal size pad with pages of notes.
Since you want to start a home business and can’t afford a big investment you need some ideas. Do you have a passion or a particular interest? That can turn into a coaching or consulting business like health and wellness or accounting.
If you like writing in your niche, (i.e. like travel or cooking), then maybe blogging could be a great business to start. If marketing and advertising is your thing, maybe becoming a copywriter, editor or online marketer would be good choices for you. Have you mastered social media?
Do you want to be an influencer or support other influencers by managing their social media accounts or helping them with advertising and being a personal assistant
A freelancing business like transcribing, virtual assistant and content creating. If you have knowledge and experience in technology, you may want to consider a career in app development. Cellphones, computers, laptops and smartwatches and smart tvs are here to stay.
Drop shipping, ecommerce businesses use third party companies to fulfill their orders with no need to stock merchandise. If you love pets there are always opportunities to pet sit which can be combined with travel destinations to allow you to travel the world and pet sit at the same time.
Whatever you choose you are going to be the best person to determine which business will bring you the most happiness, fulfillment and stability.
A few other things to consider:
Do you have a space in your home where you can work that is quiet(for phone calls), a dedicated computer, a desk and high speed internet.
Will you need lots of supplies and inventory if so, do you have the space?
Will you have a lot of foot traffic and can your home support that without building a separate entrance to your home office?
Keep your start-up cost low, maybe consider keeping a part time job until your business gets off the ground so that you have money to fund the business and keep you financially stable.
Because you are working from home you now control your time. Keep your schedule flexible. Determine your best time of day to work. Schedule some breaks and down time as well. Most small business owners work more for their own business than they do for themselves. So don’t overextend yourself.
To achieve maximum independence keep collaborations small and with a few people. The less people you work with simultaneously the more flexibility and independence you can keep for yourself and your own projects.
Step 1 Your Avatar
Your next step is to determine your avatar-your ideal client, this person that you are very familiar. When you speak they get your point. You know their habits, their likes and dislikes. You can see them in your mind’s eye. What’s their age, income, places they like to go? Are they on LinkedIN or Facebook? You know it already. You know who fits in the group and who doesn’t. You know if they like reading your information, listening or watching a video. You get them and what makes them tick.
Step 2 Market Analysis
Determining your avatar is a part of market research/analysis.
What is a market analysis?
A market analysis should answer the following questions:
Who are my potential customers?
What are my customers’ buying habits?
How large is my target market?
How much are customers willing to pay for my product?
Who are my main competitors?
What are my competitors’ strengths and weaknesses?
For a home based business this can be done on the internet with google. You can see how many searches are made on a particular topic. Amazon can tell you how many books are written on your subject, who your competitors are, what the ratings are and you can even read the comments to see what information is useful and
Not so useful. Don’t forget to take a pinterest search on your subject. You can determine competitors’ strengths and weaknesses, your audience. How interested are they in your subject and competitors? Your customers have questions, pain points so you supply the answers and solutions.
Step 3 Business Plan
Next, do you need a business plan? Yes it can be a simple business plan or a traditional business plan. It will also depend on the type of business. If you are looking for outside funding, venture capital or angel investors you need a traditional business plan but if not then write some notes, bullet points on where you are now, why you are doing this, what’s your plan for the next 3 years? It does not have to be very elaborate. As your company grows your business plan may change. At the end of each year sit down and review your business plan to see if you are on track, or need to make changes.
Step 4 Business Finances
Now look at your finances, what items will need to get started and how much is it going to cost? Some businesses require large overhead and come with staffing already in place while others have low points of entry but may require you to put in more time.
Open a business bank account. Your personal expenses and your business expenses should be kept separate so that you can see if and how your business is growing, pay expenses for the business, pay taxes on the business or use your business to offset your current income. A business bank account looks professional.
If you know little about business finances and expenses consult with a CPA to give you guidance on how to set up your books for tax purposes. Quickbooks is a very easy software to use to keep track of all of your expenses. At the end of the year it will save you from looking for receipts that you kept in a shoe box.
About 61% of small businesses struggle with managing cash flow so stay on top of it. When you make more than you spend, that’s positive cash flow. Send out invoices as soon as possible. Monitor debts and savings. Always borrow money from your personal account before you need it. Your CPA can tell you how to annotate it in your ledger.
Your inventory should be cost-efficient always look for ways to cut expenses
Step 5 Type of Business Structure
Your business structure is next. You have options. A partnership carries dual status as a sole proprietorship or limited liability partnership. An LLC protects members from personal liability for the debts of the business. Corporations can sell shares of stock to secure funding for growth.
To maintain sole or primary control of your business and it’s activities a sole proprietorship, partnership agreements or an LLC might be the best choice for you.
A corporation is constructed to have a board of directors that makes the major decisions that guide the company. Initially a single person can control a corporation, but as it grows, the need to operate it as a board-directed entity increases. Even for a small corporation, the rules intended for larger organizations still apply.
Step 6 Licenses, permits and regulations
When you legally register your business you will find out if you need specific licenses and permits to operate. Check your local, state and federal laws to determine if you need specific licenses and permits to operate.
“States have different requirements for different business structures,” Friedman said. “Depending on where you set up, there could be different requirements at the municipal level as well. As you choose your structure, understand the state and industry you’re in. It’s not a ‘one size fits all,’ and businesses may not be aware of what’s applicable to them.”If you plan on starting a nonprofit, know that there are different rules that govern those types of entities.
Step 7 Register with the IRS.
Most businesses with employees need a federal employer identification number. This number is required for business licenses. file a tax return, or open a business bank account. Most sole proprietors don’t need a EIN# and sometimes your business might need to change its FEIN
Step 8 Business Insurance
Does your business need business insurance? Some businesses need a safety net for unexpected events. The most common are business owner’s policies, general liability, workers’ comp, cyber insurance. To determine what type of insurance you need you can contact your local state and federal agencies as well as experts in the same field, accountant, land lawyers. In addition to getting the advice of others, you should do your own research. Read about the types of plans that seem most likely to apply to your business, and make your own conclusions.
Step 9 Hiring Employees and Choosing Vendors
Hiring employees and choosing vendors can be done as the business grows and only if it is needed. For employees, your recruitment strategy will vary by business. Use referrals, improving job descriptions, and offering relevant perks helps attract the best potential candidates on the job market.
In the early days of your small business, you might find it easier and more cost effective to do everything yourself. As you grow, you’ll likely need the help of a vendor or partner to accomplish tasks like accounting, shipping, manufacturing and marketing. Talk to other small business owners in your industry, get referrals and recommendations. Check ratings on websites and online groups and communities for referrals.
Step 10 Marketing and Advertising.
An essential part to growing your business is marketing and advertising to get you in front of your avatar. You want the biggest bang for your buck. Start with in-person networking at local business meetings, email marketing and advertising on social media. You need leads to improve sales and ROI.
Google AdWords and Bing Ads can bring in traffic to your website and help your business rise to the top of the page when people search for relevant phrases. Use long-tail keywords that are industry specific. This will get your campaign the highest possible click-through rate and conversions.
Advertising on social media platforms like Instagram, Twitter, Facebook, Pinterest, Tik Tok will allow you to target specific demographics you have not reached out to. This is great for business owners with small budgets because you can target specific customers by age, gender, education and interest. Even if they don’t purchase they may share or like your business which allows you to build your database of potential customers.
Listing your business locally
Get your business listed with Google My Business and Yahoo listing for free. By adding the name of your business, website, images and hours you can take advantage of people searching for businesses on Google in your area.
Website
A custom-designed website with accurate information, attractive pictures can serve as an information source for your customers and a lead generation tool.
If you can’t afford to hire someone to design your website, you can use the templates and tools provided by WordPress, Wix and Squarespace to create a basic website. Just note that platforms like Wix and SquareSpace have issues when it comes to SEO. SEO is important so you may be better off using WordPress.
Email Marketing
An email newsletter is a cost-effective marketing tool to engage with your current customers and tap into a market of potential customers regularly.
Start with a lead magnet to capture future customers or audiences name, email and maybe even phone numbers. It can be a toolkit, newsletter, ebook, video or webinar. Then you can continue to send out a newsletter to provide your customers with valuable and relevant information. This makes your business the one they remember when they’re ready to buy. Every 3 to 4 emails you can send out a promotion, an online coupon that they can use to get a discount.
Conclusion
As you think about how to start a small business online, be careful not to seat the small stuff. You’ve completed your preliminary research, and you know that your product or service can sell, so it’s not too soon to get moving. It’s important to have a plan, but don’t overthink it.