The idea of starting your own home business may seem like a great way to make some extra money. However, it can be very difficult if you don’t know what you need to do in order to get started. That’s why I’m going to give 5 tips on how to start a small business at home.
Table of Contents
Decide what you’re going to sell
This may seem obvious, but it’s important that the items you sell are high-demand and low-competition. Before you can review sales data for a product, you need to have a product to review! For this reason, some drop shippers will build inventory ahead of time before even going live with their store.
I’ve chosen to use a dropshipping model for all of my eCommerce stores, but there are other profitable business models that don’t require this.
In order to find products to sell, here is a process I recommend:
- 1. Find a product you want to sell
- 2. Review the market demand. You can use Google Keyword Planner, Merchant Words or even Amazon’s Best Sellers Page
- 3. Find wholesale suppliers for that product through Alibaba or other marketplaces
- 4. Look for dropshipping companies online who stock the items you want to sell and do all of the fulfillment for you (i.e. purchase orders, shipping)
- 5. If you’re interested in wholesale-only (no dropshipping), find suppliers on your own directly through Google or Alibaba and use a product sourcing tool like Oberlo to manage all of the products you want to import.
Write a business plan
A business plan is a written document that describes the nature and objectives of your business as well as how you intend to achieve those goals. It can be quite detailed or it can be somewhat vague but essentially, a business plan will outline what you hope to accomplish with the money raised from investors, and what resources you need to do so.
Your business plan is basically your roadmap to success or failure. It is important that it be realistic, thorough, and well written. Most plans are compiled with the assistance of professional consultants who can help you decide what needs to be covered in your business plan so that there are no gaps, what’s most important to cover first, etc. A business plan template will give you ideas on how to structure your business plan, while not limiting you in terms of creativity.
When writing a business plan for the first time, it is usually helpful to use a business plan template until you get comfortable with creating your own. Once you have created your own template, make sure that you keep it up to date by revising it periodically and adding new information as needed.
As far as how long your business plan should be, there is no simple answer to this question. Generally speaking, a business plan of 20 pages or less will suffice for most small businesses while larger companies may require more detail and lengthier plans. You can use our free business plan template to easily create a business plan that covers all the necessary information in an organized fashion. Once completed, you can save your business plan and print or email it to investors when needed.
Decide on your business’s legal structure before you start a business
Single-member LLCs are the simplest, least expensive legal structure for starting a business. By keeping your ownership interest to one person, you limit the number of decisions that have to be made. The bylaws can be as simple or complex as you want, although this is an area where simplicity makes your life much easier should you ever need to terminate your LLC.
Sponsorships vary from $475-$850 and include formation filing, up to 5 members, business name search, the Articles of Organization and operating agreement, tax id number assignment, and registered agent service for one year.
Apply for your EIN today! Your business needs one.
This number is your company’s identification within the US Treasury Department’s IRS system. An EIN, or Employer Identification Number, is especially helpful for sole proprietors or businesses with no employees. It helps you file taxes correctly and simplifies financial transactions.
A new website has been launched to make it easier for companies to get an EIN. More than a million new businesses are started in the US each year, so it’s a popular service.
The site is hosted on a different domain from the parent company, so you can trust its security and privacy features. A guarantee ensures your satisfaction, offering a refund if there are any issues with your order or service.
The process for getting an EIN is simple and takes less than 5 minutes to complete. A helpful FAQ section also makes it straightforward to find answers when you need them.
Set up a business bank account
Insert the location of your home address and country. If you do not have a business or work address we recommend using a P.O box so the bank knows where to send tax forms and other official documentation.
Click next, and select “business” as type. Enter your name as the owner (with or without dashes). Do not select “individual”.
The bank may require some additional information before they can open your account. Once you have answered all questions to their satisfaction, they will usually ask for documentation of your identity and details about the company. You do not need to own a registered business or any assets in order to open a business bank account.
Set up a home office to run your own business
The article is about how to set up a home office that allows you to work from home. For most people, this is the dream of having an office at home, where they can do everything they need without commuting or even going into the office.
It’s just one big problem: many people who want to make it work at home don’t know where to start. They have a designated room for an office, but they soon find out that having a designated room doesn’t do anything if you don’t actually make use of it.
So the article talks about how to set up a home office and explains some tips on what people can do in order to make their home office more effective at allowing them to work.
Work with an accountant
In most cases, you should have a good understanding of how money works. Always ask yourself if you can afford something before purchasing it, and stay on top of your monthly earnings and expenses. However, there are things money can’t buy – especially when it comes to submitting taxes. In order to claim all the deductions that you’re entitled to, it’s strongly recommended to work with an accountant.
While you can submit your tax returns yourself, chances are high that you might miss a deduction or two. Most accountants have a good understanding of the deductions included in a tax return and will often recommend other deductions to make as well. Accountants also know the best time to file your taxes, which increases the chances of receiving a tax refund.
Conclusion
If you’ve been thinking about starting your own business, or are already in the process of doing so but need help getting started, this blog post has a lot of great information to get you going.
We hope that this article answered any questions you had and gave some valuable tips on how to start a small business at home. For additional resources on how to start a small business from an accountant’s perspective, check out our video below!
