While none of us would have wished at the start of 2020 for the world to go quite so topsy-turvy, it’s happened and there’s not much we can do about that.
One thing we should all be aware of is that, when the world is struck by an extreme circumstance, the “normal” that we go back to is often a “new normal”. After both World Wars, there was undeniable structural and societal change. After the Great Depression, FDR instigated the New Deal.
It seems improbable that the current crisis will not have a similar tectonic effect on the way the world works and, while these changes are often best analyzed by historians later on, it seems inevitable that part of the new normal will be more people working from home. Not just working from home either but, in many cases, running a business from their homes. For many of us, it has been impossible to do our jobs as normal, and we have been left looking for an alternative.
Switching to running a home business is not going to be easy, but it has to be considered as an option if you want to be insulated against other potential future crises. So it’s important to think carefully about what you need in order to launch your own home business. Below, we’ll go into the details of what you need to cover so that your business is ready to take on the world and offer you an exciting future.
You need an idea that you’re enthusiastic about
If you want to make a business work, you need to come at it from the angle of someone who can live and breathe what they do. While it is simple to look at the kinds of business that are typically successful, don’t get too hung up on replicating what has already worked. There are two reasons why this may not work for you.
- If someone else is already doing it successfully, then you’ve already got competition.
- You may find yourself having to learn about a new niche, which will slow you down.
If, on the other hand, you have an idea about which you’re already excited, you can “hit the ground running”. You will know why it is profitable, where you can source materials and products, and where to promote it. You can also be evangelical about your business and your niche, which is a huge advantage when it comes to “selling” yourself and your products or services. People are automatically uncomfortable with being “advertised” to, but they are more likely to listen to someone who speaks from the heart about something they love.
You need a budget you can trust
The idea of a business is that, if it is successful, it will make money for you. That, however, is going to take time and when you’re just starting out there is going to be a point where you’re not making any money, but need cash to both start and maintain the business. The amount you need may not be huge – you can bake and sell cookies from in front of your house using ingredients you already own, for example – but you’re still going to need to account for your time, utility costs and more.
You need to sit and plan out what you are going to do. If we go with the “cookies” idea, how many cookies do you plan to make within a period of time. How much can you sell them for? How many can you produce using the money and materials you have available? These are just a few of the questions you’ll need to ask yourself. Once you have answers to the relevant questions, you can design your budget, coming up with an amount that you’ll need in order to get your business moving, and keep that momentum going until it’s self-funding.
You need to let people know you’re there
Whatever the nature of your business, it is going to be important to attract attention from the kind of people who might be prepared to order from you, or use your service. In short, the whole process is not going to work if people don’t know where to find you and how to give you money. So you’ll need to consider publicity – where and how will you market yourself? Should you set up social media accounts for the business? (Spoiler alert: Yes, you should).
While it is possible in the early days to run a home business using only your existing internet connection, cell phone and even your own social media accounts, it’s not advisable. Your business will appear more professional and therefore more reliable if you keep it separate and give it the kind of public profile that differentiates it from some fly-by-night operation. Calling in the likes of Network Drops to establish a business communications network that is separate from your home comms is a worthwhile investment. Not least, it will allow you to have a “business face” and a “home face”, which will be important in the long run.
You should also consider how you brand your business and how you publicize that brand. Design a logo and use it – on your website, once it’s in place, but also in a number of other places. Consider using a wraparound ad on your car; even if you’re using the car to take your kids to school or just do some shopping, you can be literally driving publicity for your business. This doesn’t conflict with the separation between “business” you and “home” you, because this kind of publicity is entirely passive.
You need to be legally compliant
Some call it “red tape”, others call it “regulation”, and many if not most consider it to be a headache for business owners who are just trying to make an honest living. But here’s the deal: business-related legislation exists, and needs to be accommodated if you’re going to make a thing of your new home business. It may be food hygiene legislation as it relates to baking cookies in your own kitchen. It may be the case that if you live in rented accommodation, you’re not allowed to run a business from that location; or at least, that you need permission from the leaseholder.
Whatever you’re planning to do in your business, make sure that it is legally compliant from the get-go. Even if you don’t necessarily agree with the regulations, you need to abide by them. If for no other reason, consider that failure to comply can result in you facing fines, closure of your business and even, in some cases, a custodial sentence. Ignorance of the regulations is not considered to be a defense for breaking them, either, so it is on you to find out what they are and how you can work within them. A simple web search will reveal most of what you need to know, but if anything is unclear it is worth retaining a business lawyer to ensure you’re on the right track.
You need the correct insurance
Along with legal compliance, one of the most important aspects of business admin is making sure that you have the right insurance. For example, if you are a therapist who receives patients in your home, you are almost certain to require public liability insurance. If you have employees who work on site, you’ll need the right insurance for them, too. There may be other requirements too, depending on what kind of business you run and what kind of inventory you keep; check out what is expected of you before you launch the business, so you can be up to date immediately.
Having the right insurance isn’t just important from a legal standpoint (although it is relevant to your legal standing as a business). It is, literally, also cover for you. If an accident happens, if your stock is destroyed, if any incident occurs that causes a loss of earnings in the business, your insurance may well be essential for the purposes of making up any shortfall in takings, and ensuring the continuing operation of the business.
You need to know your tax status
Finally, meeting your obligations as they relate to tax will be a vital part of running a home business. Again, as with insurance, do not see this as merely a restraining force on your business; it can work in your favor. Items that you use in the process of operating the company may well be deductible when it comes to filing your tax return, and you may be in a better financial position than you thought. Naturally, you will of course need to be paying your share – businesses that evade tax can find that they are faced with a much higher liability once penalties are added.
Running your own business from home is complicated and takes a lot of preparation to get right. But if you put the effort in and get the essentials in place prior to launch, you might be surprised by the benefits that result.