21 Steps to Starting a Home Business

November 29, 2013 | By | 2 Replies More

21 Steps to Starting a Home Business

Recent trends show that home-based businesses are becoming the wave of the future. In the United States alone, home-managed businesses are the fastest-growing segment of the U.S. economy, with an estimated annual growth rate of 10%. The drive for economic self-sufficiency has motivated large numbers of persons to market their skills and talents for profit from home.

All around the world, people who want more control over their lives are starting home businesses. For many, the home office is becoming the location for a full-time job and the primary source of income. For others, it is a part-time venture providing for an extra income for the family. People are opting for a kind of life wherein they can make their own hours, commute to work in seconds, make their own choices and become their own bosses.

The rapid pace of technological innovations and developments, particularly the advent of the Internet, has certainly boosted opportunities for working at home. Many start on a part-time basis and carefully built these extra income efforts into full-time, very profitable businesses. Homemakers, hobbyists, retirees, people interested in a second income, and the disabled are just a few of the groups attracted to home enterprises. A young mother’s craft business began when she started appliqueing decorations on her children’s clothes. A retired government worker bought 36 beehives and sold honey to local health food stores and at craft fairs. One woman works from home designing and selling original patterns for fabric dolls. A journalist left his full-time job to publish a party and event planners guidebook from the entire first floor of his two-story home. A teacher did typing and secretarial jobs for her husband and friends until she realized the potential market and opened a full-time secretarial service from her apartment.

Others have become home business owners by using their skills in catering, counseling, teaching, daycare, sewing, writing, photography, consulting, market research, and landscape design. The increasingly service-oriented economy offers a widening spectrum of opportunities for customized and personalized small business growth.

However, starting a home business is not easy and success cannot be achieved by pure luck alone. It requires both skills in a service or product area and acquisition of management and attitudinal competencies. There are many common characteristics and challenges to be considered in launching most home based businesses, regardless of size. Some tasks are universal to all small business startups, while others are unique to a home-based business.

Special planning is required to know all the pertinent legal and tax issues, proper space utilization and to establish time management discipline. Inadequate or careless attention to the development of a detailed business plan can be costly for you and your family in terms of lost time, wasted talent and disappearing dollars.

If the idea of working from home is appealing, but you do not know where to begin, this feature series is a comprehensive step-by-step guide to starting a home business:

Step 1. Decide What Part of the House to Use

Select an area for your home business, one that will allow you to concentrate, focus and do your work. The perfect space is a separate room (or perhaps the garage), but any area will do if it can hold all the business supplies and equipment, and also provide enough work space for desks, tables, or counters. If your situation permits, create a home office that is preferably away from the family activity so as not to get disturbed.

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Step 2. Determine How Much Time You Can Spend on the Business

Many people start a home business on a part-time basis while raising children or working outside the home. Others start full-time when family and finances allow. However you begin, figure out how may hours per week you can devote to the business. Make a weekly chart of your activities, examine it, and determine where the business fits. Don’t assume you have time and find out later you don’t.

However, it is important to remember that starting a business is easy; making it grow successfully requires time, patience and lots of nurturing. While working part-time may work initially, the business may soon require more time and commitment from you.

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Step 3. Decide on the Type of Business

Choosing a business means finding an area that interests you and in which you are qualified or can qualify.

Make a list of things you like to do, your work and volunteer experience, and items you own that can be used in a business. Look at this line-up and using ideas from it, list possible businesses to start. Eliminate any business that is not appealing or does not fill a need people have.

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21 steps to starting a home business

Step 4. Choose a Legal Form

Choose the legal form of business that is best for you. Consult with your lawyer; your accountant and business advisor to help you decide which business structure best suited to your situation. To help you decide, you should consider the following: tax implications, liability issues, plans for business growth, international exposure, exit strategy, family structure and involvement in business, relationship with potential partners, and litigiousness of customers, employees and businesses in your area. Make sure that you get your choice right from the very start to avoid many pitfalls.

The three basic legal forms are a sole proprietorship, partnership, and corporation. The most common are the sole proprietorship. Where the business is owned by one individual, it is the easiest to start, and the least complicated to dissolve. If you are not going to incorporate or use your own name as part of the company name, you will need to obtain a fictitious name statement, or what is called DBA – “doing business as.”

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Step 5. Determine Where the Money Will Come From

Whether you want capital for start-up costs, short-term operating costs or long-term strategic development, your first step must be to accurately estimate the amount of money you need.

There are three ways to finance start-up costs: use your own money, obtain a loan, or find investors. If possible, it is better to start small, use your savings, and not worry about repaying a debt. Also, keep in mind that since you are a home-based, chances of qualifying for a loan or finding investors are slim until the success of your idea is proven.

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21 Steps to Starting a Home Business Part 1 | Part 2 | Part 3


Isabel Isidro

Isabel Isidro is the co-founder of PowerHomeBiz.com. A mom of three boys, avid vintage postcard collector, frustrated scrapbooker, she also manages Women Home Business, Starting Up Tips and Learning from Big Boys. Connect with her in Google +.

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