Everyone wish to start a business, but most people don’t know how or where to start. As a result of COVID- 19 pandemic, you might be thinking of starting a business from your home. Maybe you have thought of what business you could start from home or perhaps you have no clue of what business to do, and you are really confused or you might be thinking that starting a business is one of those silly ideas of yours. Friend, I want you to relax. Whatever category you fall into, this article is written for you. You are about to learn how to start a successful business from home, and soon you will realize that you are a born entrepreneur.
A friend of mine quit her job and decided she was going to start a business from home just like me. Yeah, she wants to copy me because she knows I work from home (smiles). She did everything necessary and then launched her home-based business. First day at home, she didn’t know when she slept off while her computer was still on. The second day, she slept off again and couldn’t achieve her plan for the day. Third day, the same thing happened. It continued for 5 days, and she decided to give me a call.
My friend: Hello Ayobami, working from home isn’t working for me.
Me: Won’t you even ask how my day went?
My friend: Sorry, how was your day? Look, I am really concerned about this whole thing.
Me: What’s the issue?
My friend: Since I started working from home, I have been sleeping all day.
Me: Well, that’s what it means to work from home. Lol.
Hmm, is that really what it means to work from home?
Stick with me, and you will find out the truth. You will find out how I helped my friend to run a successful business from home like me.
I will be sharing the first-hand experience with you. In this article, I will teach you how to understand yourself better; know what you want, why you want to start a business, and determine if working from home suits you or not. If you realize that working from home suits you, then you will proceed to learn how to start your home-based business and run a successful business. Are you game for this? Let’s dive in.
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Why do you want to start a business from home?
It is very important to have a valid reason to start a business. Do you know why? This is because starting a successful business isn’t easy at all. That’s the bitter truth. However, when you have a valid reason to start a business, you will be able to manage and sustain that business as challenges arise. Business and challenges are like twins; no business doesn’t face challenges. Your valid reason to start a successful business is what will fuel your motivation and keep you going during tough times.
Don’t be deceived by those people that claim that just anyone can start a successful business. They would tell you to buy their book or enrol for a course on how to start a successful business. They would even share a success story with you and tell you that if you buy their book or enrol for their course, you will start making huge money as an entrepreneur. Do you want to know the truth? If starting a successful business is that easy, why would they insist on you buying their books or taking their courses? All this is a form of a marketing strategy for them. They are only using you to achieve their own business goals. Their target audience is an entrepreneur and if they get to convince many people to become an entrepreneur, then they will be able to increase their profitability. That’s it.
Don’t fall for their lies
These people will tell you how they made 60, 000 dollars in a month or how they helped their clients to make 500,000 dollars within 3 months. Hmm, they’ve gotten your attention already, and you are feeling so motivated to start your own business. So, you went ahead to start your business with the mindset that you will make a lot of money within the few months of launching your business, but when reality hits you, you lose all your motivations to manage that business.
You did everything possible to make money but got nothing. Then you start feeling like a failure because you have heard the success story of how others made it and you are wondering why your situation is different. After much struggles to successfully manage your business, you had no choice than to give up. You later realize that you were just a pawn for them, but it was too late.
Don’t get me wrong. I am not saying that you can’t start a successful business and make a lot of money within a few months of launching it. But, you deserve to know the real truth so that you know what you are signing up for when you decide to start a successful business. The success story they told you to lure you into starting your own business could actually be true. But what they didn’t tell you is that those success stories are like 0.1% of the entrepreneur community. This means that they didn’t tell you about the other 99.9% of entrepreneurs who didn’t have a success story to tell. They have decided to tell the success story of 1 in a million. And this act of hiding the truth from people (especially new entrepreneurs) is the reason why many businesses fail today.
What is the truth about starting a successful business?
Don’t enrol for any program or course, and don’t buy any book if they won’t be practical with you and tell you the whole truth. They should tell you the whole truth about starting a successful business so that you can know what you should expect. Well, you are here with me today, and I will be sincere with you. I am going to be practical with you and tell you what exactly you should expect when starting a business from home.
Entrepreneurs are quite aware that running a successful business is one of the toughest things to do. So, as I said earlier, you have to have a valid reason for starting a successful business. I want you to know that you can’t just start a business because you simply like the idea of being a boss of your own.
How to know if your reason for starting a business from home is valid
Why do you want to start a business from home? Think about it. You might be wondering; how will I know that my reason for starting a business is a valid reason? The truth is that there is no standard to measure what reason is valid or not for starting a successful business. However, what makes a reason valid for you is if that reason is a priority for you. So, if you are wondering if your reason for starting a business is a valid reason, then ask yourself this question; is this reason a priority for me?
For example, I started my life coaching business because I want to influence lives positively. Influencing lives is a top priority for me, so that makes it a valid reason. And anytime I feel like giving up, I would remember my reason for starting, and get back to work because I can’t imagine living a life without influence. I realize that anytime I influence someone positively, it gives me a sense of pride, and that keeps me going.
OK, let me give you 4 tips to help you think of a reason why you want to start a business from home.
- What is your motivation for starting the business?
- What are your priorities in life?
- Can you start a business from home?
- What is your self-evaluation outcome?
1. What is your motivation for starting the business?
Your motivation should be based on the type of business you wish to run:
- Fun or hobby-based business: this is a business established for pleasure or relaxation. Such business is focused on engaging your hobbies.
- Part-time lifestyle business: this is a business established as a side job. Though you still have your main job with a regular paycheck, you have decided to do this alongside your main job.
- Full-time startup: this is a business established as a full-time job. You are ready to dedicate your full time and efforts into managing this business. It means you are willing to work for your company full time.
You have to decide which type of business you are motivated to start. Whatever type of business you are motivated (drawn to) to start, you can always profit from it. For example, most YouTubers business is fun or hobby-based business. These YouTubers do what interests them (engage their hobby), and earn money from it (turning their hobby into paychecks).
2. What are your priorities in life?
Understanding your priority or priorities in life will help you to determine why you want to start a business from home. Define your top priorities in life and make it your valid reason to start a business.
Examples of priorities for most people:
- Work-life balance.
- Being independent.
- Finding happiness.
Therefore, any of these priorities can be a valid reason for you to start your successful business. Contrary to popular belief, money is a valid reason if it is your top priorities in life. You might say, but top entrepreneurs do say that starting a business for the sake of making money isn’t good. I don’t agree with them. The truth is that many of these top entrepreneurs are in it for money.
Starting a business for the sake of making money is also a valid reason to start a business, trust me. How does it make it a valid reason? You know you want to make money because it is your priority, therefore your desire to make money will be your motivation. You will stay motivated to keep going despite any challenges your business is facing because you know you are yet to achieve your goals (make money). However, what is not good about this is when you let ‘making money’ be the sole purpose of your business. If making money is the sole purpose for your business, you will easily get frustrated when you don’t make enough money as expected, and this could make you give up on your business too soon. Adding value should be the primary purpose of any successful business.
3. Can you start a successful business from home?
Remember the story of my friend I told you at the beginning of this article? When I told my friend who complained about sleeping that that’s what it means to work from home, I was actually being truthful. For me, working from home means sleeping as often as I want. It is part of the package of home-based business, and I adore it. However, no home-based business will be successful if what the owner does is to sleep and sleep. Therefore, I always plan my day and stick to it.
How do I manage my home-based business?
I already know I am more productive at night so I often sleep during the day, and work during the night, except when I have speaking engagements to do during the day. This management style and plan has helped me to successfully run my business from home for many years now. However, will my style and plan work for everyone? No. That’s why you must ask yourself if working from home is for you or not. Do you think if you start a business from home now, you can manage it successfully?
Why couldn’t my friend be productive working from home but ended up sleeping every time? It is either working from home isn’t her style or she’s not ready to commit fully and make it work. How do I mean? She started on the wrong note. In the first instance, she did not have a real motivation to start a home-based business; she just went ahead to start one because she saw that I was running my business from home.
How I helped my friend
The first thing I did to help my friend was to take her back to the foundation she skipped. I helped her to lay the foundation for her home-based business and encouraged her to evaluate her decision to start one. After building a solid foundation, we realized that her major challenge was with planning. So, I helped her to design a personalized plan based on her personality and which has nothing to do with the traditional working plan everyone is used to. I told her to test the plan for a week first to see if it works, and if it doesn’t, we can always adjust her plan to suit her. It worked, and my friend has been managing a successful home-based business for 15 months now.
Working from home requires a great deal of self-discipline, and if you are the type that loves to work under constant supervision, you might want to take a walk away from starting a home-based business. More so, working from home requires a lot of commitment, self-motivation, and determination. So, ask yourself; does my personality suit working from home? If the answer is yes, then ask yourself again; can I be disciplined, self-motivated and committed to my home-based business? If your answer is yes again; congratulations, you are welcome to start working from home.
4. What is your self-evaluation outcome?
I want to believe that by now, you have decided on your motivation for starting a home-based business and you have defined your top priority, so now let’s talk about self-evaluation. You need to know your current state and situation and see what you are capable of doing. Evaluating yourself will help you to know if you are ready to start a business or not. This will serve as the foundation for your entrepreneurship journey. Before deciding to start a business from home, I would advise you to download the file below and sincerely the questions.
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How to start a successful business from your home
If this is your first time starting a home-based business, don’t panic at all because I’m going to take you through the steps of starting a successful business. First thing first, entrepreneurs are not aliens or well-gifted people; they are just ordinary people who understand how to put their ideas into action. Therefore, anyone can be an entrepreneur. If you are ready to put your ideas into action, then you should prepare for your induction into the entrepreneurial life circle. To get you started as an entrepreneur, here are 10 steps to launch a successful business from home:
1. Find a business idea
Every successful business starts with a good business idea. You need to come up with a concept to offer a product or service for money. Your business idea is very important for your new business because it is the seed you are about to sow. If you sow bad seed, it doesn’t matter how well you take care of the seed; you will get nothing in return. A bad seed will result in a bad harvest or no harvest.
Building a successful business requires a huge time commitment, therefore you have to come up with a business idea that worth your time.
What can you do? That’s a go-to question to help you find a business idea. You have to figure out what you can do to add value to this world. Then, think of the existing problem, and how you can solve a problem doing what you know how to do best. Do you want to know how to develop a successful business idea? I have written an extensive article on how to develop genuine business ideas with ease.
2. Do your research
I believe you have already identified a business idea you want to launch, so what you are to do now is to measure the reality and practicality of your business idea. You have to get the fiction out of the way of your business idea and get real. Whatever your business idea is, you should research about it to see how profitable, realistic, and stable the business idea is. Having a great idea is not enough for your business; you have to know if people will be willing to accept your offer or not. If there are no customers/ clients, then starting such a business is pointless.
The main reason why you need to do market research is that you need to know if there is an audience (customers) for your idea. For example, if you have a pool cleaning idea, you need to know how many swimming pools are in your community and how many swimming pool owners are willing to hire your service. You need to research your business idea by analyzing your existing market and your target audience before you begin wasting resources, investing in your business.
Determine your audience
It will be foolishness to spend your money and time working on a business idea when there is no audience (customers) for it. And if there is an audience for your business idea, you need to know the number of audiences, how the audience changes with time and the market (current and evolving market). For example, if you find out that there are just 100 swimming pools in that community, then you have to ask yourself: is it worth it to spend your money and time on developing that business idea? You need to calculate the amount you will spend on the business and the possible amount you can earn for profit from the business. You know that for a business to be successful, profit must be higher than expenses. So, you have to do the calculations yourself before starting that entrepreneurial life cycle for your idea.
Many newbie entrepreneurs make the mistake of not researching before starting their business. Don’t ever take market research lightly because it will serve as a guide to determine your success or failure in business. You need customers/clients to sell to, and we all know that without customers, there are no sales, and without sales, the business fails.
Before you begin making any steps in business, you need to make sure that there’s an audience, in need of your service or product.
Know if people are interested in what you are about to offer
It is better to know earlier if people are interested in your product or service before spending your resources on that idea. And if no one is interested in the service or product you are offering, you will need to rethink the direction of your business. How? Let me still use the pool cleaning service idea to explain this.
Let’s assume you find out that there are 100 swimming pools in your community, and only 5 swimming pool owners are interested in hiring a pool cleaning service. Or let’s say none of the swimming pool owners is interested in hiring a pool cleaning service because they clean it themselves. Now, you know you have to rethink your business idea. Do you think you should still go ahead with your business idea? If yes, then you have to think of things you can do to create more audience for your business.
You can become a game-changer
If you find out that you have no audience for your business or the audience for your business is very low, you can think of ways to create more audience for your business (become a game-changer). Back to the pool example: to increase your audience, you can think of ways to convince pool owners why they need the service of a professional pool cleaner instead of cleaning the pool themselves.
Also, you can think of what to do to encourage the people in your community to construct more swimming pools. You can think of partnering with a real estate firm, and run a promo that whoever buys a house from that real estate firm will have a swimming pool constructed for them for free or at a discounted price. To become a game-changer, you will have to think of ways to change the current status quo of the market so that your business can have a huge audience (large customer base).
Now that you know that for you to be a game-changer, there are many things to consider. And one of them is to consider how much it will cost you to change the current status quo. Can you afford the expenses? And will you be able to cover up for the cost in the long-run when your business becomes profitable? If you can’t afford the cost of changing the status quo, then you should consider another business idea.
Market research is very crucial
Conducting in-depth market research before starting a business is very crucial. You know you are not to research for just research sake; you have to let the research outcome inform you of your course of action. If there is a promising audience for your product or service, then you have to make the right decisions regarding where, how, and when to sell to your audience (customers). Market research is not just for you to know your target audience because there are other important things you need to know. You need to conduct research on your potential competitors too and think of what value you can add to give your business a competitive edge, allowing you to thrive in new environments.
Reasons for market research:
- Know if you have an audience.
- Know when and how to sell to your audience.
- Locate where your audience could be.
- Know your industry and how it evolves.
- Know your competitors.
- Identify your window of opportunity to enter the market.
- Know what you can do differently.
- Know who can be of help.
How to conduct market research:
- Survey and questionnaire.
- One-on-one interview.
- Site visitation.
- Focus group sessions.
- Public data.
3. Make a plan
The reason for conducting market research is to help you to plan your business. If you want to achieve success in business, it is important for you to have a good business plan. Having a plan will help to direct you on the path you should follow in your entrepreneurship journey.
Every good thing needs a plan. You can’t just build a house suddenly, except you want it to collapse. You know you have to draw a plan for your house. To build a house, you have to lay out a foundation and design how you want the house to be like before you even start building it. Starting a business isn’t different from building a house; you need a solid plan to make your business successful.
A business plan is like the foundation of the business, upon which all other things required for the success of your business, are built upon.
Making a plan for your business is not just some kind of procedure to follow; it is a necessary thing to do if you are really serious about running a successful business. Although there are formats for writing a business plan, you are not under any pressure to follow formats because it is your business and you call the shots. There is no right or wrong way to write your business plan as long as you have your business figured out.
Your business plan should focus on strategies and actions to take to run your business. It should feature the resources required for achieving your business goals, your revenue model and timeline of anticipated results.
Why is it important to write a business plan?
A business plan is like a roadmap for how to structure, manage and grow your business. A good business plan can help you get funding or partnership. When writing your business plan, make sure you take your time to think through the key elements of your business. Ensure that your business plan meets your needs by providing you insights into your business. If you don’t know how to write a business plan or maybe you have an idea of how to write a business plan but you don’t know where to start, then I would advise that you visit liveplan. Many entrepreneurs find it helpful in drafting their business plan.
Types of business plans:
- Strategic plans.
- Operational plans.
- Internal plans.
- Growth plans.
- Lean Startup plans.
- Traditional plans.
4. Plan your finance
No business will strive without finance. Before starting your startup, it is in your interest to know how much your startup will cost and your initial investment. You don’t want to invest in your business and then get stuck half-way into it. Imagine saving money to buy a car because commuting is difficult due to rush hours and limited bus service. Eventually, you used all your savings to get the car, but two months after, you are finding it difficult to fuel the car. What happens eventually? Your car will be parked at home because you couldn’t afford to fuel it and then the purpose of you buying the car in the first place will be forfeited as you will be forced to go back to the hard way of commuting, standing in the bus stops for hours before you can get a bus.
Put together data that estimates the one-time startup costs for your business. This one-time startup cost is going to be your fixed costs. Calculate how much it will cost to start your business (e.g business registration, equipment, licenses and permits, market research, insurance, inventory, property leases, branding, etc.).
Then put together a spreadsheet that estimates your variable costs. Calculate what you anticipate you will need to keep your business running for at least one year (utilities, travel expenses, salaries, production, rent, marketing and advertising, supplies, customer service, etc.). Make financial preparation for the one-time cost to start your business and for the cost to keep your business running for at least twelve (12) months.
Start what you can finish
One thing you should keep in mind is that you shouldn’t start something you can’t complete. Starting a business has a price, and you need to know how you will cover those costs before you can think of launching it. A friend of mine was laid off due to office politics. He told me he is just going to start his own business, using all his savings. I told him that it is not a good idea to spend all his savings on starting a business.
More so, he is going into a business at a time when he will be dependent on it and will be so eager to quickly turn in a profit because of his current financial status. And the truth is that business is not ‘eat and poo.’ It takes time before a business starts turning a profit. And the reason why many businesses fail is that they run out of money to run the business, even before the business starts making a profit.
Some businesses take months while some take years before earning profit. And if all your life now depends on the outcome from your business, you will become frustrated, impatient, depressed and lost. From experience, I have noticed that business thrives when you don’t put all your life on it because you are not so desperate for it to succeed however you are consistently giving it your best to make it work.
Don’t get me wrong
Ayobami, are you saying that I should not start a business if I get laid off from work or that I shouldn’t plan to leave my current job to focus on my business? No, what I am saying is that you should not use all your savings to pursue your business dream because that dream of yours still needs money to sustain it until it becomes independent (able to run on it profit). I am saying that you need to have money put away to support yourself and business until your business makes a profit.
Don’t be like the person who brought a car, but has no money to fuel the car. You have to put aside money for the continuous running of your business, pending the time your business becomes self-sufficient. So, if you spend all your savings just to start the business, how will you have money to run it?
It is advisable not to ever use more than 60% of your savings for your business. If all your savings is $70,000, it means that your available fund for your business is from $1- $42,000. This means that for any business idea you want to launch, that business shouldn’t cost you more than $42, 000. And if it does exceed it, and you are still very willing to launch that business idea because you so much believe in it, then you should think of alternative ways to get funds for that business. Don’t even think of touching $1 from the remaining $28,000 you have left as savings.
Ways to fund your business
Aside from self-financing your startup, there are other ways to fund your business:
- Get business loans.
- Apply for business grants.
- Pitch to angel investors.
- Do Crowdfunding.
- Raise money from family and friends.
- Partner financing.
However, keep in mind that one of the best financing options for your business is personal savings and/or financing from family and friends. It is easy to access and it keeps you in charge of absolutely every decision about your business.
A break-even analysis:
When planning your finance, it is never a bad idea to determine at which stage your business will be profitable. Of course, you should have an idea of how long it will take for you to recover the expenses (investment) spent on your business. Doing a break-even analysis will help you know how much revenue you need to cover all your expenses, and you will also know which product or services generate profit and which one is offered at a loss.
There is a formula to help you with your break-even analysis.
Fixed Costs / (Average Price – Variable Cost) = Break-Even Point
Common, don’t look away. Yeah, I know you don’t really like math. Perhaps, you are not good at it. But trust me, the formula might look complex however, it is very simple to calculate.
Let’s do a live example for break-even analysis.
Let’s say your home-based business is a carpet cleaning service. To set up your carpet cleaning business, it costs you $50,000. To clean a carpet, you will charge $50 from your customer. You agree to pay your worker $15 per carpet as direct labour costs (even if you are your only employee- solopreneur). And you spend $10 on utility per carpet (e.g electricity, water, phone services etc).
So, how can you do break-even analysis for your small home-based business? Let’s use the formula above. If it cost you $50, 000 to start your carpet cleaning business, it means your fixed costs is $50,000. Your service charge for a carpet is $50, so your average price is $50. And for your variable costs, you have $25. Oh, you don’t know how we got $25 for variable costs? Variable costs here is the sum of direct labor costs and utility costs i.e. ($15 + $10) = $25.
So, let’s do the calculation.
$50,000/ ($50 – $25) = 2,000.
This means that for your business to recoup its costs, it must clean 2,000 carpets, and for your business to begin earning a profit, it must clean 2,001 carpets. (> 2,000).
How to use your break-even analysis to set your marketing goals
With your break-even analysis result, you now have an idea of how many carpets you have to clean to start earning a profit. So, you are to make a marketing plan based on this so that you can reach your target of 2000+ carpets. You can break down your marketing target to daily goals.
For example, your daily target can be to clean 8 carpets per day. It means in a month, you would have cleaned 192 carpets (providing your cleaning service is opened from Monday-Saturday). Let’s calculate your number of working days for a month as 24. So,
8 x 24= 192 carpets per month.
If you keep up with your daily target, within a year (12 months), you would have cleaned 2,304 carpets.
8 x 24 x 12= 2304 carpets per year.
Since you already calculated your break-even analysis to be 2000 carpets, it means that within a year, your business would make a profit because 2304 > 2000. At the end of the year, you would make a profit of $7,600 (304 carpets x $25).
To be precise with your calculation, let’s decide how long it will take for your carpet cleaning business to earn a profit. For you to get 2000 carpets, it will take you 250 days (10 months, and 10 days) to cover your business expenses. Remember, we assume that your number of working days for a month is 24. 10 months equal to 240 days.
8 x 250= 2000 carpets.
This means that on 251th day, you will earn your first profit.
If you increase your daily target from 8 to 10, the time it will take your business to start earning a profit will reduce. Depending on your plan, you can start earning profit within a few months or after a year.
Be prudent in your spending:
One mistake many newbies entrepreneur make is that they always spend money on things that are not necessary. They want to become as big as their competitors, without putting into account that they are new in the industry and are supposed to grow in business. Many startup owners don’t know how to start small and are constantly comparing themselves to their competitors. Seeking a competitive edge doesn’t mean that you have to go big as your competitors; it is all about the value you offer.
Why would you spend a huge amount on office space that would fit 30 people when you are just 3 in your company? Oh, you are comparing your office to that of your competitor. Your competitor office is big because they have larger staff strengths and they have been in the business for quite some years now. Your competitors are spending wisely, but you are not. Don’t overspend when starting a new business. You should always keep in mind your business purpose and don’t go for fancy things. For example, don’t buy industrial printer when you can make use of a desktop printer, after all, you are not printing up to tens of thousands per day. Learn how to minimize costs for your business.
Prudent spending applies to home-based businesses too. Don’t spend too much on business cards, marketing materials, signwriting, inventory, etc. Whatever you are spending money on, let it be for the purpose it serves and not for luxury. Spend as little as possible when you start your business and only on the things that are essential for your business to grow. When your business becomes well-established and successful, you can consider luxuries.
Tips to help plan your finance:
- Start small.
- Don’t spend money on unnecessary things.
- Estimate your startup cost.
- Calculate what it will take and how long to start getting profit.
- Plan your financing options.
5. Set up your business
Now, it is time to set up your business. You have to put things in place so that you can give life to your business idea and transform it into a successful business. Here, we are going to talk about 6 simple things to do to set up your business.
a. Choose a business structure:
You are to decide your business formation. What type of business structure do you want to have? Your business structure will impact many things about your business; your business name, your liability, taxes, etc. Don’t stress yourself too much about your business structure. You can always change your structure as your business grows.
Types of business formations:
- Sole proprietorship.
- Limited Liability Company (LLC).
Read about the various business structures and decide which one you want to start with. You should spend some time getting to know the pros and cons of each business structure. If you are still not sure of which one to choose, you can use the help of a corporate structure advisor. S/he will guide you on how to select a legal structure for your startup.
A limited liability company (LLC) is believed to be the best business structure for most small businesses. This is because they offer the flexibility that small operation needs while also protecting their assets. The entrepreneur can reinvest profit back into the business and not pay taxes on those expenses because LLCs are taxed as pass-through entities.
b. Pick and register your business name:
Do you have a name for your business? Yes, you need to name your business because that’s your baby. Choosing a name for your business is pretty easy. Choose a name that your customers/clients can relate to and speak volumes about your product or service.
Choosing a perfect business name:
Here are quick tips to help you choose a perfect name for your business.
- Avoid hard-to-spell names.
- Don’t choose a name that is too vague or too meaningful.
- Let your name speak volumes of your product/service (be descriptive).
- Keep it really simple.
- Don’t copy your competitors (be unique).
- Creatively use related words.
- Make sure you have a related domain.
- Choose a scalable name.
c. Register your business:
It is time to make it real. Registering your business gives you the confidence and assurance that you are indeed running a business (legit business). A registered business is a real business. Several advantages come with registering your business, one of the advantages is that you will get legitimacy and brand awareness and this will raise the confidence of your clients/customers to do business with you and even investors to invest in your business.
Registering your business can position you to enjoy operational business benefits, and get funds. If you want to take your business to the next level, you need to make your business a legal entity.
Read the requirement for registration in your country because these requirements vary by country. The process of registering a business is different depending on location, operation, and size. Registering your business requires paperwork and fees.
d. Get licenses and permits:
Research what licenses and permits apply to your business and get them so that you can do business in peace without fear of sanction. One of the most common mistakes new entrepreneurs make is that they fail to research the licenses and permits their business need for smooth operation. Then it gets complicated and sometimes frustrating for them to run their business because they didn’t do the right thing from the beginning.
Home-based business owners also need to get some licenses and permits, depending on the nature of their business. For example, you might need a business license aside registering your business, so you will need to register with state or local government as well. You might need sign permit, air and water pollution control permit, sales tax license, fire department permit etc.
e. Choose your accounting system:
Your accounting system is very important for the smooth running of your home-based business. You can’t afford to lose track of your business’s finances, therefore you have to pay attention to your business accounting system. You need to have a strong accounting system to create and manage your budget, set your prices and rates, file your taxes and conduct business with partners/suppliers. Start by choosing the right bank for your business. Your choice of bank should depend on the needs of your business.
Regardless of if you are the only employee of your business or not, you should be using accounting software to help organize expenses and bill clients. Even though you are running a small business, you should be well-organized. How organized your company is will determine your business success. You can use accounting software for invoicing, inventory, tracking, quote, receipt scanning, payroll (if you have staffs) etc. Always ensure to properly manage your business accounting. I advise you to use accounting software to manage your accounting. You don’t have to worry about the cost of accounting software because it is affordable and some even have a free plan for users.
Best accounting software you should be using for your business.
- Zoho Books
- Sage Business Cloud Accounting
Focus on your customer relationship management (CRM) too. Your customers are vital to your business success. With proper CRM, you will be able to manage your current and potential customers. Managing your customer data will help improve your business relationships, help you stay connected to your customers; processes, streamline, and improve profitability. CRM helps you to focus on customer retention and ultimately drive sales growth. With CRM software, you can manage sales, get actionable insights, and facilitate communication.
Best CRM software you should be using for your business:
- Salesforce Sales Cloud
- Zoho CRM
- Sales Creatio
- Agile CRM
f. Set up your business location:
To overcome the hassle of getting an office and employing workers, you can just start your business from home. A home-based business is as effective as a business with an office. In fact, as a result of the global pandemic, home-based businesses are even thriving more than the traditional business. So, don’t think you are at a disadvantage by setting a home-based business.
However, I want you to know that even though you are about to operate a home-based business, you need to think about your home location, equipment, and overall setup. Make sure that your home location works for the type of business you will be doing. Research shows that service-based business works best as a home-based business e.g sectors like Information technology, media, education, events, entertainment, accounting, consulting etc.
6. Develop your product/service
Yeah, your business is all set up, now it is time to enter the market. The main reason for starting your business is to offer a product or service to those in need of it; therefore it is necessary you make that product or service available. At this stage, It is time to develop your service or product.
Plan your product or service
When developing your product or service, make sure that it provides value to customers/clients. If customers don’t see the reason to buy your product or hire your service, then your business will most likely fail because customers won’t have a reason to trade their money for your service or product. However, if you develop a product or service that has tremendous value, then customers will not hesitate to trade their money. The important question you should ask yourself when developing your product or service is; will a customer be willing to pay money for this service or product?
Setting up your business means nothing if you don’t have any product or service to offer. Launch your business as soon as your product or service is ready to enter the market. Please note, having just any product or service to offer will not drive success to your business. Let your product or service be of great quality and this will help increase your reputation and improve profitability.
Determine your pricing
If you want to quickly drive sales, you can start with a slightly lower price from that of your competitors to attract their customers to yourself. And as your business gets more established and recognized, you will bring your price to equate to that of your competitors. Now, customers won’t want to leave you since they are enjoying your service and well, even though you have increased the price, it is not as if it is now expensive than others so they will still stick with you. If you want to build a brand with value and luxury, you can raise your prices to be higher than that of your competitor and your customers will stay because they see tremendous value in what you offer.
And if you want, you can start your pricing higher than that of your competitors. Although, this will take time for you to start getting customers as your brand is relatively new in the market and people aren’t convinced yet as to why they should pay higher for your service or product. However with this approach, even though your customer base is small, your revenue will be higher. How? Imagine you charge $200 for a service whereas your competitor charges $50. If your competitor revenue is $2000, it means your competitor has 40 customers, whereas if you have just 10 customers, you will have the same revenue. And if you have the same customer base, you will have higher revenue.
You could also offer free trials to new customers, and gradually convert them to paying customers. Whatever approach you choose for pricing is your choice. I will advise that you should put a lot of things into consideration; most especially your target audience, location and market trend.
Tips to help you develop your product or service:
- Know your market.
- Describe your product or service.
- Protect your intellectual property (IP).
- Assess your skills.
- Identify your commercialization pathway.
- Test the market.
7. Get your team ready
Remember you are starting a successful business from home, and your staffs won’t be working with you in the same room or building. This means that you will be engaging in outsourcing or visual assistance. Since your employees will be working remotely from where ever they are; therefore there is a need to employ people that are self-motivated, disciplined and result-driven. You need to hire a great team because you need capable hands to join you to get your company off the ground and help to achieve the business goal. You can’t do it alone, so you need others that share your goal to help.
When hiring your team, don’t be in a hurry at all. Make sure you take the time to outline the positions you need to fill. Make the job responsibilities very clearly and communicate what you are you looking for in your potential employee. One important thing you should know if you are planning on starting a home-based business is delegation. Learn how to delegate duties and assign tasks to employees based on their strengths and not their weaknesses. As the business owner, you should define roles and responsibilities, and let there be a clear division of labour, and give sincere feedback so that your staffs working remotely can be productive. You have nothing to fear about your employees working remotely because you can monitor their productivity and efficiency with simple software so that your employees can remain productive remotely.
Top employee monitoring software:
- Time Doctor
- Work Examiner
Even if you are planning to be your only employee, you still need help. You should outsource some tasks so as not to feel overwhelmed and burn out. More so, you need motivation or advice or reassurance from people around you (family, friends, mentor, entrepreneurs, business coach etc.). Therefore, you have to be mindful of the people in your circle because directly or indirectly, they are your team.
Tips for building a great team:
- Explain your business vision.
- Define roles clearly.
- Understand the strengths of each individual.
- Get your employees involved.
- Consider team-building exercises.
- Recognize the value of diversity.
- Extend your team beyond your business.
- Let your team know that you value them.
- Don’t hire based on familiarity.
8. Brand your business
Another thing you have to do with your home-based business is to brand that business. Branding is very essential for business success. When you have a strong brand, it will give you a competitive edge in the market. It will help you to build customer recognition and loyalty and will enhance credibility and ease of purchase.
A good brand will increase your reputation and the value of your company, hence makes acquiring new customers easier. You should build up your brand before you start selling your product or service. This is because your brand will help you get a following of people ready to enter when you open doors for your business.
When you make people know your brand even before seeing your product or engaging your service, you can rest assured that when you eventually launch it, people will immediately patronize you. If not for anything, curiosity will make them patronize you. And if they later find out that your product or service is good, then you will be able to retain them as your loyal customers.
Maximize the use of technology for your business
Make sure you have a website, create a logo, and use social media to establish your brand online. Develop a successful slogan to improve your business. Make your slogan easy to remember e.g. Nike- just do it; Apple– think different. Also ensure that you keep all digital assets up to date with relevant, interesting and informative content about your business or industry at large. It is not good to have a website that contains out-dated information about your business or offer. Therefore, as you run your business from home, whenever you make any changes, always update your info online to ensure credibility and value.
Simplicity runs the world, so use simplicity as a weapon to drive your uniqueness. You don’t have to do something complex with your branding, just go for something simple, easy to identify and easy to remember. Take a look at big companies’ logo e.g. Google, Facebook, Amazon, Apple etc. Their logo is very simple and easy to identify. Be consistent with your design and use it across all of your platforms. As you build your brand, you can have opt-in-forms on your website or social media, and ask your potential customers to sign up. Make sure you ask for permission to communicate with them so that when you do email marketing, your email will not be tagged as spam.
When doing branding, you should keep in mind this question at all times; will people easily be able to find me? Let it be a guide to help you with your home-based business branding. Whatever branding style or design or method you choose to use, make sure that the end goal is to make your business easy to find.
Tips for branding:
- Get a great logo.
- Write down your brand messaging for your intro.
- Integrate your brand to your entire platform.
- Be unique and don’t copy others.
- Develop a creative tagline.
- Give ‘life’ to your company with the art of branding.
- Let’s all your resources and materials reflects your brand.
- Uphold your brand.
9. Promote your business
Once your home-based business is up and running, you need to put your business out there so that it can start attracting clients and customers. And the only way to bring attention to your business is through promotion and advertisement.
Promotion and advertisement build your reputation with customers. Your visibility through promotion medium makes customers believe that your company is well established, and has a good reputation. Hence, they are willing to trade their money for your product or service, and that in return will result in increases in business success. Don’t think that because you now have a business, customers will come willingly to you. You should remember that there are competitions, which means that customers have options so for you to get those customers to trade with you; you have to do the hard work of convincing them that what you offer is better than that of your competitor.
When I was younger, I use to ask myself why big brands always do advertisement and promotions even though they are already well-known. Anytime I see a coca-cola advert, I would smile to myself and think that they are just wasting lots of money in adverts and promotions since virtually everyone on earth knows their brand already. But when I grew older, and I became an entrepreneur, I understand better. In business, you have to always stay relevant. You remember the saying, out of sight is out of mind. Take your business promotion seriously if you want to run a successful business from home. Don’t joke with adverts and promotions, because they are the engines of your business, driving it to success.
Benefit of promotion
Promotion is a key element and plays a major role in the success of your business. Promotion helps in increasing customer traffic, and the more customers you have, the higher your profit. It is interesting to know that promotion can be done anywhere, from the comfort of your home. Common, we are in the technology age. Use technology to promote your business so that you can get customers as you work from home.
The fact is that the more you promote your brand, the more will customers know about your business and the more willing they will be to buy a product from you or hire your service. If you spend money on adverts and you are focusing on the right people for your ads, no doubt your sales volume will increase.
To get the best out of business promotion, you should design marketing and promotional strategies to ensure long-term success and profitability for your business. Write a unique selling proposition (USP) to put across the benefits of your service or product to customers and convince them to switch brands. Also, create a marketing plan to help you reach your target and achieve your business goal.
If you don’t know how to write a marketing plan, use any of these free tools below:
- Vital Design
- Marketing Donut
- Smart sheet
- Marketing Plan Now
- The Balance Small Business
Main tools of promotion:
- Direct Marketing.
- Sales Promotion.
- Public Relations.
10. Manage your business
Once you have completed all these steps to starting a business, the next thing is to manage your business well and consistently work on your business. Success is a process, and the process is achieved by hard work, patience, and consistency. Doing the activities we have discussed thus far will officially make you an entrepreneur. The great thing about being an entrepreneur is that you get to be in-charge, and decide what you want to do, how you want to do it, and when and where you want to grow your business.
Owning your own business gives you independence and flexibility and it comes with personal fulfilment, pride, power, money and happiness. When I started my entrepreneurial journey, I felt so proud of myself. The single fact that I own my business makes me happy and that happiness is a constant source of motivation for me to rise above any challenges I might encounter in business.
By now, you know that starting a business isn’t a big deal but running the business for a long-term is the real big deal. Many businesses failed due to their inability to effectively manage the business. You don’t want that to be your case; therefore you have to pay attention to properly manage your business. Use the business plan you have created to consistently work on and in your business so that your business can become successful. How you manage your business is a key determinator of your success as a business owner.
When managing your business, expect to make a mistake and expect to face some challenges and failures. However, you should always be willing to learn from your mistakes and failed attempts. Doing so will increase your chances to drive business success.
How to stay in business for a long time
Starting a business should not be your main focus, but how to manage it and stay in business for a long time. To stay in business for a long time, it means you have to make a profit and stay afloat. Therefore, you have to constantly seek to grow your business. As a business owner, you should always think ahead and plan your next step by considering every possible scenario. Also, invest in yourself because you are the decision-maker for your business and your level of exposure, intelligence and knowledge will determine how well you will manage your business.
Make sure you are learning daily. More importantly, don’t have the ‘I know it all’ attitude because it will hinder your progress in life. Yes, I know you are the boss, but please keep your ego in check and listen to others too. Listen to what they have to say and try to see from their point of view and evaluate their inputs.
Tap the power of collaboration
Of course, you know no man is an island of knowledge so we all need each other to progress and succeed. Always tap the power of collaboration to drive your business to success. One sure way to achieve business growth is to collaborate with more established brands in your industry. Reach out to other companies and strike a deal with them to favour both sides. You can also reach out to influential bloggers and ask them for promotion in exchange for a free product or service.
Do everything you can to grow your business, and don’t give up on your business during tough times, because tough times exist to help you realize your potentials and empower you for the success ahead. The best way to stay grounded and secure as your business evolves is by removing the unwanted emotional, physical and mental clutter in your life and business. Shunning negativity and focusing on positivity will lead you to become a better and more confident decision-maker in business and life.
There are 3 parameters that you should really pay attention to when managing your business;
Make sure your product or service is of great value to your customers. If your product or service isn’t great, no matter how much you spend on the advertisement to bring in customers, they will not trade their money for your product or service. And if they do, it will be just a one-time off, and they will tell others that your product or service is bad hence will discourage your potential customers from patronizing you. That’s why you must continue to upgrade and develop your product or service to better suits your customer needs.
Sales is the heartbeat of a successful business. Don’t stop working on your marketing and promotion strategies because you have to continuously increase your business sales in order to make your business a profitable one. You should favour creativity and use it to promote your business. Always take advantage of new trends in the community so that your business can stay relevant to your customers.
One thing you don’t want to joke with is your customer service. You have to prioritize customer service and ensure that you provide a good customer experience to your customers. Customers’ perceptions of your business can make or break your business. If you deliver great customer experience and give them quality products/service, oh God, they will sing your praises to their friends, family and on social media. There are some products I purchased just because of how much people sing their praises. Of course, you know you have done the same as well. We all do this consciously or unconsciously.
Now imagine, they got worse customer experience, and on top of that, your product or service is horrible. God help you; they will tell the world how terrible your business is, and that will automatically affect your sales. And you know, negative news spread faster, so the wise thing to do is to pay attention to your customers and build a great reputation for your business.
Here are quick 30 tips to help you manage your home-based business.
- Invest in your personal growth.
- Plan ahead.
- Don’t burn out- learn to delegate.
- Empower your employee.
- Let go of control over things beyond your control.
- Don’t lose sight of the bigger picture.
- Focus on making a big impact.
- Learn from your mistakes.
- Automate to free up your time.
- Prioritize customer experience.
- Evaluate the big wins and big failures.
- Leverage your company data.
- Stick to processes.
- Stick to a budget.
- Promote transparency.
- Collaborate with established brands.
- Minimize costs.
- Keep your ego in check.
- Separate business bank account from personal accounts.
- Always re-evaluate decisions and policies.
- Stay organized.
- Focus on positivity.
- Set goals and stick to them.
- Consider renting instead of buying.
- Take advantage of technology.
- Measure your progress.
- Stay disciplined.
- Pay yourself.
- Don’t let legal fees get out of hand.
- Be consistent.
Starting a successful business from home requires a huge commitment, discipline, determination, and perseverance. Entrepreneurship has never been known to be easy however, it is not impossible to achieve great success as an entrepreneur. Before starting your business, be sure of your motivation for starting that business, and make sure you keep your motivation alive regardless of the challenges you might face in business. Be practical about your business idea and your resources because business is all about practicality. Now is the right time to start your own business, so go for it, and don’t let anything hold you back because you are destined to be successful in life.
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Copyright by Ayobami Abiodun