Do you dream of running your own business from the comfort of your home? Are you aware of what it takes to make this venture successful? Do you think it will be difficult to separate your personal life from your work when you get set up and running? These are all valid questions and we’re about to help you out by shedding light on some of the most important things to consider before starting your own home business.
Personal Finances
You want to be sure your personal finances are in order before starting out in business. Take some time to explore your monthly income and expenses and determine where you stand financially. You can take out a personal loan to finance your next move in your personal life whether that be moving home, going on vacation, or sending your child off to college. But, when it comes to financing your business, it’s always best to keep things separate from your personal accounts.
Choose a Name for Your Company
Next, it’s time to choose a name for your company. Do you want to use your own name? Will the name you have in mind describe what service/product you’re offering? Or do you want something totally abstract? These are all things to think about. Once you have decided on something, check online registers to make sure another company hasn’t taken the name you have chosen.
Structure of your Company
The structure of your company will have a big impact on how it’s run. Explore your options and decide whether you want to create a private limited company, a public limited company, or do you want to go into a partnership? Perhaps you want to be a sole trader? These are all structures to consider so take some time to consider what each option will mean for you when it comes to paperwork, taxes and how much profit you can take out.
Target Market
You need to determine who is going to buy your product/use your service. First, choose specific demographics to target and consider the psychographics of that target market. What needs/wants do they have? What drives them to make a purchasing decision? How do they think? Analyze your product/service and make sure it aligns with the audience you are trying to reach. Scout out your competition and see what they’re doing to get attention and make sales. Do you have something better to offer? How can you stand out from the crowd? Make sure you answer these questions with your target audience in mind.
Decide on a Price
Now that you have a product/service and you know whom you’re selling to, it’s time to settle on a price. The cost you can charge will mostly depend on the market rate and the value that your target market places on the product/service you’re offering. Think about the quality of your product/service – is it premium and can you charge more than what your competitors are charging?
Workspace
One of the most important things to have when working from home is a separate space to work. Doing emails from the kitchen table among chaos is not going to be productive no matter how much you think you can do it. Investing in an office desk and chair is best and, if you have space, put them in a room in your home that isn’t in use for any other purpose. If you don’t have space, find a corner in a room that will be quiet during the day. Renting a desk from a co-working space is a great option for those that are very tight on space.
Tools & Equipment
Admin is a part of all businesses so, at the very least, you’re going to need to invest in a computer, a printer, and a phone. There will also be other essentials so think about what your business needs to operate efficiently and invest in the tools and equipment you need. Don’t forget to keep your receipts as you will be able to offset these expenses against your tax bill.
Open a Bank Account
As mentioned in the first point, it’s essential to keep your personal and business finances separate. Call your local bank and explore the options that are available for setting up a second account. If you plan to borrow money in the future, there are many incentives to set up a business bank account from the very beginning.
Hire an Accountant
Don’t make the mistake of trying to do your own bookkeeping, that’s unless you have some experience in accounting of course. Even if you do have some experience in filing taxes and keeping records, hiring limited company accountants might be the single best investment you make in your business. The right person will make sure your accounts are above board and legal. He/she will save you hours of frustration and ensure you are taking advantage of tax breaks etc.
Marketing
How are you going to reach your target audience? Will you be advertising online or do you need to invest in flyers, business cards, and other, more traditional, methods of advertising? You need to have a solid marketing plan in place and an advertising budget that will allow you to reach your goals. Working with a local marketing agency early on may be a good option if your budget allows it. Make sure you do your research on who to work with, as your chosen company/person needs to have experience in the marketing techniques that will make up your strategy.
Are You Passionate?
Being passionate about the journey you’re about to embark on is just as important as any of the points we’ve mentioned above. Running your own business from home can be a very rewarding and enjoyable experience but, as with everything in life, it won’t come without frustration and difficult times. Will the passion you have for your product/service get you through the late nights and long days? Sometimes passion is the deciding factor between failure and success so don’t start out unless you have the drive to weather the storm.
