Many individuals are skeptic when it comes to starting a home based business.The number of home businesses started yearly is rapidly on the rise. According to Link Resource’s National Work at Home Survey, over 100 million home based businesses are in operation as at 2010; up from about 50 million in 1997. This is an indication that people who want more control over their lives are starting their own home businesses despite the risk involved. This trend is not only in the U.S but in Nigeria, Canada, India and all over the world.
21 Easy Steps to Starting a Home Based Business in 21 Days or Less
1. Decide what part of the house you will use for your home based business
The first step to successfully starting your own home based business is to select an area away from family activity. The perfect space is a separate room, the garage or perhaps the basement. But any area will do as long as it can hold all the business supplies and equipment; and also provide enough work space for desks, tables, or counters. Jeff Bezos, Steve Jobs and Henry Ford used the garage of their various homes while Robert Kiyosaki used the basement to kick start his business.
2. Determine how much time you can spend on your home based 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. Julie Aigner Clark created Baby Einstein while nursing her baby. Rosalind Gardner started her home based business part time as an affiliate marketer and went full time when her business income exceeded her salary. Steve Jobs, Henry Ford and Jeff Bezos on the other hand started full time.
Well, the best way to find success as a home business owner is to 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, only find out later by the time you’ve kick started the business that you don’t.
3. Decide on the type of home based business to engage in
Make a list of things you like to do, your work, passion, hobby, skill and volunteer experience; and items you own that can be used in a business. Look over this line-up, and using ideas from it; list possible businesses to start. You can also start a home business based on your passion as Rachael Ray did with cooking and J. K. Rowling did with writing. But be sure to eliminate any business that isn’t appealing or doesn’t fill a need.
Is your business going to be online or offline? Are you going to market your own products or someone else product? These are the questions you must answer before ever starting a home based business.
4. Choose a legal form or business entity for your home based business
The three basic legal forms or business entity are sole proprietorship, partnership and corporation. The most common is the sole proprietorship. As its name implies, a sole proprietorship is owned by one individual. It is the oldest form of business, the easiest to start, and the least complicated to dissolve. Here are some of the advantages of the sole proprietorship business form:
- You own all the profits.
- Your business is easy and cheap to organize. You don’t need any government approval, although you may be required to carry a city, state or county license. Your only obligation is to notify the Internal revenue Service (IRS) for the purposes of sales tax.
- You’re the boss.
- You enjoy certain tax savings. You must pay regular individual taxes on your income, property and payroll, but these are not levied as special taxes; as with a corporation. You will also have to pay sales tax which you have received from your customers.
- Greater personal incentive and satisfaction. Since you have your investment to lose if your business is not successful, you should be more willing to put time, thought, and energy into the business. And when your business is successful, you enjoy maximum sense of accomplishment since you know its success was dependent upon your decisions and your management ability alone.For more information about this and other forms of business, send for the U.S. Small Business Administration (SBA) Publication MP25; “Selecting the Legal Structure for Your Business.” It outlines the advantages and disadvantages of each legal type of structure. If after reading it you are still uncertain what form of the business should take, consult an attorney.
5. Determine how you will raise startup capital for your home based business
There are three ways to finance small business startup costs: one, use your own money. Two, obtain a small business bank loan and three; find equity investors. If possible; it is better and advisable to start small using your savings; so that you won’t have to worry about repaying a debt. Also bear in mind that you are a home based business owner and the chances of qualifying for a bank loan or finding investors for your home based business are slim until the success of your idea is proven.