How to Start a Home-Based Business

As the formal job market changes, more people are using the opportunity to express their creative and entrepreneurial skills. Stats from the U.S. Small Business Administration show that as much as 50 percent of businesses are located in private homes. 

With this level of home-based work, many people want to know how this group has achieved sustainability. Here’s how you can find out whether or not you’re a good fit for a home startup business.

Are your skills suited to a home-based business?

Cover your basics with a few simple questions before diving into the home-based office. Are your skills or business idea appropriate for working from home? Will you be able to manage your family and business from the same location? 

If you’ve answered both these questions in the affirmative, then you’re probably suited to a home-based startup. 

Educate yourself 

If you’re already experienced in a certain line of work but haven’t yet taken the step toward being your own boss, educate yourself first. Resources are available at, where you can read up about business startups, financial management for small businesses, and just about any other topic related to your line of work, and managing a home office. 

Entrepreneurship and self-improvement eBooks are conveniently available online to help improve your skills and prepare you for a successful home-based business.

Observe legal regulatory requirements

Setting up a formal office from home may sound exciting, but before you go ahead with changes, check official regulation requirements. A medical doctor or funeral director will need special licenses to operate from home, for example. 

Freelance web developers or content writers aren’t faced with such strict regulatory frameworks. As long as you register a business (if you choose to do so), you’ll probably be fine with paying personal taxes.

Legal and financial considerations

Legal business structures encompass anything from sole proprietorships to partnerships or corporations. Tax numbers or EINs will be needed from the relevant government departments. 

Startups will need to determine special licensing requirements and zone laws. Get insurance cover if you employ help for your office equipment, vehicles and other assets. 

Most of these requirements will depend on whether your intended home-based business is going to be a sole proprietorship or other structure. Once you’ve established these details, you will have direction in terms of the other requirements.

Disciplined record management

Part of running a successful business from home is learning how to keep accurate records. You’ll want to maintain records of outgoing expenses and incoming payments as a foundation. Cost-effective software can aid with bookkeeping, or a part-time assistant can be employed if you don’t have the time for this yourself. 

Use of your private car and home office space is tax-deductible, for instance. Startups businesses should leverage every financial advantage available to them when working with a shoestring budget.


Unless you have an established client base, you’ll probably need to invest in some marketing to inform potential customers of your existence. A website and a call to a digital marketing company will go a long way toward setting you up with some basic advertising campaigns to get your name out there.

If you don’t have extra funds to spend on marketing, you’ll probably need to learn to find productive ways to advertise your home-based business. Use the power of social media to help in this regard, but grow your knowledge for best outcomes.

A home-based business is not for the faint-hearted. There are many considerations and decisions to make, and the risks are great. Fortunately, so are the rewards worth your while if you approach your startup with sensible expectations. 


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