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Starting a new home business can be a great way to balance your lifestyle and family commitments with your work. It can give you a lot of independence. Plus, it allows you to grow at your own pace. However, there are some fundamental steps you must take in order to give your new home business a good chance at success.
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We offer here 10 crucial elements for setting up a new home business to succeed.
1. A Name for Your New Home Business
You will need a name and identity for your new home business that is separate from yourself. Before you settle on a name, however, make sure it is legally available.
2. Company Structure
When it comes to starting a new home business, you need to decide on a structure that will work best for you. For example, you could choose to be a sole trader or you could go into partnership with someone. Your choice will greatly affect such responsibilities as paperwork, taxes, and the sharing of profits.
3. Zoning Laws
Be sure to check the zoning ordinances in your area. That’s because some residential zoning laws don’t allow home-based businesses.
4. Your Home Office
You’ll need a designated space for your office. You’ll probably need to allow enough room for a desk, a computer, a fax machine, and a telephone. Ideally, you want your office in a quiet area with some level of privacy.
Alternatively, you could install an additional building in your backyard or next to your house. A Quonset hut from Steel Master would be a good choice. That’s because they are easy to install, practical, and spacious.
5. Home Business Insurance
Unfortunately, your new home business can expose your home and family to a number of risks. Furthermore, how will you deal with these risks? The short answer: Purchase business insurance.
● Health Insurance
Find the health care that works best for you and your family.
● Additional Home Coverage for Business
Your regular homeowners insurance might not cover risks that are related to your new home business. Consequently, you’ll need to read through your policy and contact your insurance provider for information.
● Liability Insurance
If someone gets hurt while they are in your office, are you covered?
● Business Auto Insurance
You will need this if you use your car in your business.
6. Risk Assessment
When you’re working from home you might not feel there are any health and safety risks. After all, you are familiar with the environment. You know your way around the premises.
However, that doesn’t mean your home is free from risks. As a matter of fact, more accidents happen in the home than anywhere else. Therefore, risk assessments are a legal requirement for business owners. Follow the safety guidelines in this template to ensure you are practicing good health and safety at all times.
7. Start-Up Costs
You can start a new home business on a budget. However, you can expect to incur some expense. Therefore, you should estimate your start-up costs.
For example, be sure to include:
- Office furniture and equipment
- Supplies and materials for your product or service
- Business licenses
- Business cards and other marketing materials
- Construction costs for your new home office (if needed)
8. Setting up a Business Account
Keep your business finances separate from your personal finances. That’s because doing so will help you to keep things organized. However, you should shop around for the best bank and choose one that suits your structure.
9. Obtaining an Employee Identification Number (EIN)
An EIN is a federal tax number. It will be used to identify your business. You will need one if you have employees or a partner. Further, you’ll need one if you plan to form corporation. However, an EIN is free to obtain, and the process takes only a couple of minutes.
10. Advertising Your Business
Setting up a new home business by yourself means it’s likely that nobody knows who you are. On the other hand, you can’t afford to wait for customers to come to you. You need to go out and find them. Therefore, advertise. Be willing to spend money to market your new home business effectively.