Your Guide to Starting Your own Work-from-Home Business
The flexibility, freedom and satisfaction of a home business are well known; with low overheads, no commute and less risk, it is a viable option for many aspiring entrepreneurs.
Whether you want to start baking up a storm from your kitchen, dream of dog walking, pet sitting, or becoming a freelance writer, there are many options for a home-based business.
However, there are many things to consider, including legal implications, permissions and insurances. Not to mention personal obligations to acknowledge before jumping head first into your new business venture.
THINGS TO CONSIDER AND RESEARCH
As the business owner, you are assuming all the risk along with the reward and you are in charge of making sure the business is a success. Are you suited for a home-based working lifestyle? Depending on your reasons for starting a home-based business, you should make sure you can actually get the work done and live the lifestyle you want. Are you organised enough to keep the day-to-day going, or will you need to hire someone to take care of certain aspects of the business for you? Are you aware this can impact your taxes? Do you have the skills to promote your services? Make sure you are aware of all the pros and cons in the area of business you want to enter into.
Draw up a list of goals for your company, including financial projections and to make sure they are realistic; a profitable business takes time and patience to build. A wise idea is to ask those who have their own companies, read blogs and research what the day-to-day can be like. It’s easy to look at a new venture through rose-tinted glasses, so look to see where other businesses have failed and make sure you are prepared for every eventuality.
On this subject it is wise to do a bit of market research for your business idea. Look around at others offering the same service. What is their pricing like? Can you compete with them? Is there a customer base for you to tap into? Do you have the patience and willingness to put everything into place? The best place to start is small business forums, look at what problems others have encountered and try to plan for ways to minimise your risk using their experiences.
It is a good idea to look at the costs you will have to put forward to start up as well. Baking businesses will need proper equipment to handle orders, childminders will need childproofed areas and dog walkers will need the right shoes and transport. You will need a budget for in case anything breaks that impacts the productivity of your company.
Whilst there are many things to consider, there are also many benefits. No commute offers you much more flexibility and time, which is known to increase productivity & happiness. Without those hours spent weekly crammed on trains, buses and cars, you suddenly have more time to yourself.
Working from home under your own management gives you much more flexible hours. This does require you to be strict with yourself to make sure the work is done, but the positive is that it can be done on your timescale. Setting yourself free from long work nights in the office with its unpredictable shifts means you take back your own time.
Unlike many new businesses that open on separate premises, a home-based business has low overheads. With no office rent and none of the separate utility bills that come with it, you will start to profit quicker from your start-up.
MAKE A PLAN, LEARN THE RULES AND REGULATIONS
Now you’ve done your research, it’s time to write up a business plan. If you have no idea where to start there are many good templates are here. You will need to make sure it’s costed, realistic and covers the pros and cons discussed in the previous paragraphs. You’ll also need to decide on your business structure.
The options are:
It’s simpler to register your business as a sole trader, but you’ll be personally liable for any of your company’s debts.
A limited company’s finances are separate from your personal finances, most of these companies hire accountants.
The best option for two or more people to manage a business together. You will share equal responsibility for any company debts.
Now you’ve decided your structure, it’s time to consider the rules and regulations that run alongside all businesses. You can’t escape them, even when working from home.
You may need to ask permission from your mortgage provider or landlord to run a business from your property, so check on this. Also, check in with any local authority if you need to make any amendments to your home. Depending on your sector, you will need specific types of insurance that may not be covered by your home insurance. For instance, public liability insurance is a must. Make sure you research what you will need; Find these on the BIBA website or on the Money advice service website, here.
You will also have to notify the HRMC that you have started your business. Tax can be quite a lot more complicated as a business owner than as an employee.
Understand exactly what counts as a deductible and what you can claim as such. Make sure you are aware of the various types of tax, such as Income Tax, National Insurance, Corporation Tax, VAT and Business Rates. Remember that by running your business from home, you usually won’t be required to pay rates alongside your council tax. There are cases where that isn’t so: such as if you live above your pub, employ staff who come and work in your home, sell goods to visitors who come to your home, or if you have converted a part of your property for commercial use. It is wise to ask questions if you are unsure, and check local council and government websites for up to date information.
Another thing to consider is health and safety. You must carry out a risk assessment and check if you will require any safety equipment, also check to see which health and safety laws you will need to comply with – for instance any businesses dealing with food will require a food hygiene certificate.
Another vital (and slightly more entertaining) part of your plan is creating an identity for your company.
You will need a business name, and make sure to check that your company name idea isn’t taken or trademarked. Creating a logo and deciding on company colours are another part of your business that feel small, but can generate a real sense of personality that helps you stand apart from competition.
TAKE INTO ACCOUNT ALL START UP COSTS
Once you’ve done the planning for the running of your company, you’ll need to consider the initial costs of your home-business. Any equipment, furniture, advertisements, printing costs and such will need to be factored in.
You will need to dedicate an area in your home to office space, no matter what sector your business runs in. This area will be somewhere to run off invoices, receipts and stock. All businesses need to keep track of orders and clients as well as keep an organised business diary. Keeping your business as separate from your home life is essential to the smooth running of your company.
In the haze of starting a new company, it can be easy to forget about small cogs in the machine that are easy to take for granted. Places such as stationery suppliers are a vital to keeping your home-office stocked and stop you from missing small things you didn’t realise you needed until you were without it. Consider purchasing a small desk and separate computer (always have at least two backups for your data.) Keep a good stock a paper, envelopes, pens and any other items you might not have thought of. It’s good to keep a keen eye out for bargains and only bulk buy items that you have the space to store them in.
Make sure to network in your local community, promote yourself on social media and make sure you have business cards, leaflets and a professional, easy-to-use website.
Finally, after all your research and planning – make sure you tap into many of the resources offered to small businesses. There are many locally based groups and helpful websites out there.
Setting up a business is demanding work, but managing it and keeping it running provides its own set of challenges. A lot of trial and error has gone into successful home-based businesses, so it’s good to remember that every mistake is a chance to learn what works for your company and overcome any obstacles you may face.