It’s possible these days to start a small business without much startup capital. As, history has shown that most new businesses don’t survive the first year, so those that make it that far are beating the odds.
Therefore, in this article we have decided to put together some essential steps to take when launching a home-based small business.
1. Start a Fund
All businesses have expenses, so the first step to converting the dream to reality is gathering funds devoted for the operation. Some businesses are funded by loans and grants, but it’s generally difficult to get a large amount of funding from these sources with a high credit rating and a history of running a company. It’s helpful to invest in a computer devoted to the business that includes software designed for its industry.
2. Research the Industry
In order to run a successful business, the entrepreneur must study current market conditions and some of its history. Understanding trends, cost efficiency and growth rates will give a clear picture as to whether or not the market has room for a new competitor. Part of the research should emphasize looking for market holes that can be filled or customer pain points that can be resolved through exclusive products or services.
3. Get Proper Licensing
Different licensing and registration regulations apply to different cities and towns. While corporations must be licensed by the state, most home businesses deal with licensing and registration through local governments. Some unincorporated areas don’t have any requirements for starting a home business. If the business takes on a name other than the individual running it, the owner may need to file for a business name with the local government. Generally business licensing concerns involve zoning, as certain jobs may not be allowed in residential areas and are restricted to commercial zones.
4. Define the Target Market
Before the business is launched, it’s important for the owner to clearly identify the target market by geography, demographics, interests and other factors. Within the target are segments that can be represented by personas. The target customer should have specific reasons why they would be attracted to the new startup brand. In some cases it’s possible to create a completely new market with a disruptive product, but the more reliable plan is to follow business paths that have already been paved with success.
5. Write a Business Plan
A business plan is a documentation of ideas, visions and expectations for a new operation. There are various ways to write a business plan, but it helps to study sample plans that have been used in the industry. The elements of a business plan usually include a summary, description and analysis of the venture. If it involves others it should have a section on how the organization is structured. The financial sections should address sales, marketing, funding and projections.
6. Get a Tax ID Number
By obtaining a Tax Identification Number (TIN) from the Internal Revenue Service, the owner can exhibit a more professional image when filing a tax return. A social security number can be used as a TIN. If the company has employees, it will be necessary to get an Employer Identification Number (EIN).
7. Set Up a Home Office
Finding the right office space is important to run the business smoothly from home. It should be a place where a computer can connect with the internet and where other necessary communications, such as a landline phone, can be set up. If it’s a business that requires equipment to run all day and night, the room temperature needs to be cool. The room should be large enough to accommodate all the equipment and furniture.
8. Consult with Small Business Experts
Not only must an entrepreneur become a master of his or her craft, they should also surround themselves with more experienced mentors. Learning from other successful individuals is one of the best ways to advance in a field. A business owner will no doubt run into new problems that will require tapping into industry resources. It’s helpful to build a list of thought leaders and interact with them through social media or email. Turning to sources such as the U.S. Small Business Administration can provide further connections with mentors.
9. Establish Online Identity
One of the key strategies that allows substantially more freelancing and exploration of business ideas is search engine optimization (SEO). A niche website with deep content can show up high in search rankings and generate leads. By creating original, meaningful and authoritative web content, Google and other search engines may view the content as high quality. A website can be promoted in social media, email, newsletters, shared blogs and pay-per-click (PPC) ads.