Photo: Helena Lopes / Unsplash
Thanks to advancements in technology and the ongoing pandemic, more people than ever before are choosing to work from home. This shift toward home entrepreneurship comes with some considerations many people often don’t realize. From compliance issues to business structure and more, it’s important to understand these things before launching a home-based business of your own.
1. Space and Storage Limitations
Depending on the type of business you’re starting, you’ll likely need room to work and plenty of storage space for products. You’ll need to consider how this space requirement will affect your personal life and the needs of anyone with whom you cohabit.
For example, if you plan to sell products, you may want to think about working with an eCommerce fulfillment company that can handle the storage and shipment of your orders. That way, you won’t have to worry about turning your home into a warehouse, and your family or housemates won’t have to worry about tripping over boxes of stock in the garage or hallway.
2. Compliance Issues
Every state, city, county, and country has regulations for running a business. Your home-based business venture is no different than a store downtown. So, you’ll need to understand these regulations and make sure your business is compliant.
Home business requirements often include registration, licensing, and adherence to operational and safety guidelines. The laws that apply to you will depend on the type of business you run. For example, a home food business is likely to have stricter regulations since it provides consumables that could potentially make people sick. Before starting your home business, check with your local and state economic departments for the specific laws that apply to you.
3. Scope, Strategy, and Growth
Every new business needs a plan. Without a plan, you’ll flounder and probably fail. Creating a plan that includes the scope of work, how you’ll reach your goals in a timely manner, and what needs to be done to grow your business gives you a clear path and a point of focus.
As you’re considering the scope of your work, keep in mind that the more unique your offerings are, the more successful you’re likely to be. For instance, if you’re a baker, you may specialize in gluten-free desserts to set your business apart from the competition. If you’re a café, you may wish to offer a range of specialty coffee beans.
4. Financing Options
Working from home may save you money on renting a commercial space, but there are plenty of other financial considerations to think about. Licensing fees, start-up costs, acquiring inventory and/or supplies, insurance, and fees for necessary professionals such as accountants and attorneys are but a few of the expenses you may incur with your small business.
Calculating at least 6-12 months’ worth of expenses (including the initial cost of equipment) will help you ensure you have enough money to successfully launch your business. While you’re at it, separate your business finances from your personal finances. Make sure to have separatestartup credit cardfor your business needs and a separate credit card for your personal needs.
5. Marketing a Home-based Business
Because you don’t have a traditional storefront that attracts customers, you’ll need to get creative with your marketing campaign. Identify your target audience and then engage them where they shop. Online marketing is relatively cheap and easy because social media provides such a broad reach, and most consumers look there first for the things they need. Many people are choosing to work from home these days. If you’re one of these adventurous entrepreneurs, be sure you understand the considerations listed above before starting your home-based business.