How to start a business at home: A step-by-step guide


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Starting a business at home certainly isn’t a new concept, but it is skyrocketing in popularity, thanks in part to the economic effects of the COVID-19 pandemic.


The result was a surge of home-based, online businesses. Here we will discuss how important it is to explore your options on starting a home-based business and how it can help you reach your professional and financial goals.


When you’re ready to take the home-based business leap, there are a few things to think about before you get started:


  1. Weigh the pros and cons
  2. Research different home business examples
  3. Nailing down your business plan
  4. Doing your research
  5. Thinking about funding
  6. Securing a marketing plan

1. Weigh the pros and cons

According to a 2020 QuickBooks survey, 28% of those who already planned to start a business say COVID-19 accelerated their plans. Another 42% of those who started a new business or planned to start a business said they were finally taking their side gig full time.


But here’s the best part: These new business owners feel overwhelmingly optimistic about their future prospects. Over 70% of new business owners are optimistic about their success in 2021 and beyond.


Starting your own business from home comes with lots of perks:


  • Low overhead costs: This means you can get your business off the ground for less. You can avoid overhead costs like rent for commercial office space, phone systems, and other services by making use of the space and services you already have.
  • Being your own boss: This means you make your own hours. You can put in the work when you feel most motivated and inspired.
  • Eliminating a commute: Working from home allows you to trade the time you would normally be stuck in traffic for more productive minutes.
  • Home office tax deductions: Taking advantage of this perk saves you money and maximizes your tax returns. These deductions are only available to businesses that operate from home.


There are some disadvantages to working from home you may also want to consider:


  • The line between “work” and “life” can become blurry over time: When you live and work in the same space, it can be difficult to draw boundaries between the two.
  • Neighbors might not appreciate your entrepreneurial spirit: If clients will be coming to your house or you’re going to operate loud machinery, it may cause a rift in the neighborhood.
  • Your home might not be the ideal space to operate your business: You’re limited to the space you have, and working from the garage can get old quickly.

2. Research different home business examples

Home-based businesses have become prominent and even successful options for business owners who are just getting the ball rolling. Here are some great examples of home-based businesses you can start now:

Virtual assistant

A virtual assistant, commonly known as a VA, helps with management and organization tasks of all kinds. For example, some VAs assist with travel arrangements, calendar organization, admin tasks, and customer service.

Freelance writer

Freelance writers create blogs, articles, short stories, and even novels either for themselves or for clients for an agreed-upon price. Jobs like this take some hunting on LinkedIn and job boards, or might even require cold pitching online. However, if you’re good at pitching yourself and have a portfolio of work to back up your knowledge, there will always be a need in this area.

Digital marketer

Another great home-based job in high demand is digital marketing. Digital marketers are responsible for encouraging buyers to purchase goods and services via marketing tactics. With much of our buying being done online now, digital marketing experts are in high demand.

Creative designer

Creative design is easy to start from home due to efficient products like print on demand and drop-shipping, where you don’t have to actually have products on hand to start. Creative design can include:


  • Crochet
  • Sewing
  • Painting
  • Crafts

There’s a never-ending supply to what can fulfill customer needs through creative design.

Teacher or tutor

There are few jobs that can impact others so drastically, arguably none more than a teacher. Teaching from home through virtual learning centers has now become a popular option for classroom-style teaching. Signing up for these programs is fast, simple, and free, which makes them great work-from-home options for those with a passion for teaching.

Additional home business ideas

Of course, there are many other home businesses out there, including:


  • Data entry
  • College consulting
  • Transcribing
  • Travel planning
  • Medical coding
  • Customer service

3. Nail down your business plan

If you’re reading this article, you probably already have a home-based business idea. You took a look at your passions, your hobbies, and your unique skill set, and you said, “I can sell this.” You’re off to a great start. But when it comes to starting a successful business, you need more than just an idea. Here are some things to consider:


  • Nearly 70% of seasoned business owners recommend writing a business plan before you start a business—and home-based businesses are no exception.
  • A business plan clearly communicates what you’re going to do and how you’re going to do it.
  • It answers the question, “Can this business realistically be conducted from home?”

For example, selling digital art online can easily be done from a home office, but a catering business can quickly outgrow your home kitchen. A business plan serves as your road map for growth. If you’re not sure where to start, a business plan template can take you through it, step by step.

4. Do your research

No matter what you’re selling, you’re likely going to have some competition. Identifying and analyzing your competitors gives you valuable industry insight and helps you build better business strategies. You should know what they’re selling, how they’re selling it, and who they’re selling it to. The “who” part is important: They’re your target market.


Understanding your target market helps you build effective marketing strategies and attract more customers. Social media is a good place to start your analysis. Check out what your competitors are posting and how their customer base reacts to it. Conducting this research early on will help you build your business plan.

5. Think about funding

It’s possible to start a business with no money, but almost every new business begins with some amount of startup costs for things like:


  • Registering your new business
  • Applying for business permits
  • Purchasing equipment
  • Purchasing software

These all come at a cost. It’s a good idea to calculate your startup costs before you start and consider how you might fund them. If your costs are low, you might be able to pay out of pocket.

If you need additional funding to get your business up and running, there are a few options to think about:


These are all common ways to secure funding. If you’re not ready to take the financial leap, working part-time or focusing on your new business during evenings and weekends can bring in some income while you get on your feet.

Setting up for success

You’ve written your business plan, conducted a competitive analysis, identified your target market, and calculated your startup costs. Now it’s time to hit the ground running. Here are a few additional steps you can take to build a successful home-based business:


  1. Secure a marketing plan
  2. Dedicate space for work
  3. Get a business bank account
  4. Put financial systems in place
  5. Set up social media channels

 6. Secure a marketing plan

Marketing is the pathway of getting paying customers to your product or service. It’s not only a good idea but required for any business to be successful. It also comes in many shapes and sizes with different companies using various tactics to market to their target audience, including:


  • Social media marketing: Utilizing social media platforms to drive customers to your product
  • Print marketing: Utilizing print advertising in magazines or newspapers to drive business
  • Online ad placement: Utilizing online outlets such as email or website ads to drive traffic back to your product or service offering.

7. Dedicate space for work

Your kitchen table works as a desk for a short time, but if you’re serious about your business and want to maximize productivity (and save your lower back), you’ll need a more permanent space to work. Plus, separating your workspace from your living space can keep the line between work and life clearer.


For some, that might mean your home office ends up in the garage or the basement. If that’s the case, you’re in good company. Remember, Jeff Bezos and Bill Gates both started their multibillion-dollar businesses in garages.

8. Get a business bank account

Good financial recordkeeping is key to starting a successful business. Opening a business bank account is an easy way to track and record business expenses. Keeping expenses separate from personal finances protects your personal assets.


It can also help you take full advantage of tax deductions and credits available to small business owners. Keep in mind that if you decide to register your business as an LLC or corporation, you’re required to have a separate bank account for your business.

9. Put financial systems in place

More than 60% of experienced business owners say the first thing you should get help with when starting a new business is setting up your financial systems correctly.


According to the QuickBooks survey, these business owners wish they’d invested in things like expense tracking and invoicing sooner. Learn from their mistakes. Now is the time to invest in financial bookkeeping or accounting software for your business or recruit the help of an expert (like a bookkeeper or accountant).

10. Set up social media channels

One of the best ways to create a splash in today’s world is through social media. So get to tweeting, chatting, and posting. This is a great way to create a buzz in the online realm. Be active and consistent when posting and follow others in your space to keep abreast of what’s trending. Utilize channels like:


Make your business official

Now that you’ve made space for your business in your home and opened your bank account, it’s time to officially bring your business to life.


There are a few things you need to do to comply with legal requirements and tax laws. It’s a good idea to enlist the help of an expert as you prepare to tackle these steps. Business consulting from the Small Business Administration (SBA) and SCORE network is always free.

11. Check local zoning laws

In some residential areas, local zoning laws prohibit all types of businesses. Residential zoning laws often allow small home-based businesses to operate as long as the home is primarily a residence and business activities won’t negatively impact neighbors. It’s a good idea to check your local ordinances before you launch, just in case.


If you live in a neighborhood with a homeowners association, you’ll want to make sure they don’t impose restrictions on home businesses. And if you’re renting, you’ll want to read your lease agreement. (Your landlord might not support your pet sitting business.)

12. Check local business permits

Additionally, your business may need permits to operate. Some cities and counties require a home occupation permit to operate a business from your home. Others require a sign permit if you choose to display a sign in your yard or in your house. If you plan on renovating your home to accommodate your business, you might need a building permit.


Depending on the type of business you open, you may need additional permits. For example, if you’re planning to open an in-home daycare, you might need a health permit or a permit from the local fire department.

13. Register your business

If you’re planning to operate as self-employed, you’re not required to register your business. But you run the risk of missing out on tax benefits and personal liability protection if you don’t. If you decide to register as self-employed (or as a sole proprietorship), you’ll report your business income on your personal Form 1040.


Sole proprietors enjoy some of the lowest tax rates but, because you and your business are the same entity, you can be held personally liable for business debts. As with most things, there are pros and cons for every business registration. Choosing how to register your business can be tricky, but your local SBA can help you choose the right business structure and register correctly.

14. Register for business licenses

Outside of registering your business, you might also need to apply for a business license. A business license gives you permission to conduct business in your city or state.


If you’re operating as a sole proprietor, you might not need a business license, but it’s always a good idea to double-check. If you’re going to collect sales tax, you may need a sales tax permit. Get more information from your secretary of state’s office, your local Department of Revenue, or your county clerk.


Finally, you’ll want to apply for an Employer Identification Number (EIN). This number is assigned by the IRS to identify your business. Applying for an EIN is fast and free, and it protects your personal Social Security number. If you choose not to register your business, applying for an EIN is still a worthwhile step.

15. Invest in business insurance

It’s a good idea for any small business to think about general liability insurance. This type of business insurance policy protects you if someone makes a claim against your business for injury or property damage. It also protects you if you accidentally damage someone else’s property. For example, if you start a housecleaning business and accidentally break something, you’re covered.


You might need to reassess your homeowner’s insurance as well. Your policy might not cover the costs related to operating a home-based business. If something happens to your home, you’ll want to make sure you can recover the losses from your business as well.

Keep your books up to date from the start

Remote work was on the up and up long before the pandemic hit, but 2020 saw a rapid shift. Businesses we thought could only operate in person found new ways to thrive in a virtual landscape.


To avoid problems later along your business journey, it’s important to keep your books up to date from the very beginning. Utilizing software can make a big difference.

Stay open to growth opportunities

Today, starting a business at home goes far beyond dog walking. E-commerce sites like Etsy, eBay, and Amazon make it easy for any business to sell products online without building a separate website. And innovative apps like Asana and services make it possible to manage growing teams from afar.


There may come a time when it makes sense for you and your business to expand into a physical location or commercial workspace. But for now, starting a business at home is a smart way to test the waters, maximize your productivity, and chase your passion.



This article originally appeared on the Quickbooks Resource Center and was syndicated by


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5 tips for organic business growth


It’s no secret that startups have a prodigious failure rate. In fact, according to a recent study, the four-year survival rate for a startup is just 49%.

With demoralizing stats like this in mind, entrepreneurs may be tempted to grow their profits through any means necessary, including inorganic strategies like acquisitions or mergers. However, the truth is that business owners can achieve impressive growth through organic strategies as well, allowing them to retain control of the companies they built from the ground up.


Also known as “true growth,” organic growth refers to the process of growing a business by reducing costs and increasing sales, either by finding more customers or enhancing output to current clients. On the other hand, inorganic growth occurs when a company merges with or is acquired by a second business. Entrepreneurs should take the time to familiarize themselves with the advantages of organic and inorganic growth, as well as some of the top strategies for execution, so they can decide which is the best choice for their business.

As a new business owner, you’ll likely want to increase profits as quickly as possible. By employing inorganic strategies like mergers and acquisitions, startups can grow their businesses more quickly while taking advantage of resources such as stronger credit lines and expanded market resources. Additionally, joining with another company lets you take advantage of its expertise and experience in the industry to develop your own brand.


By merging with another business, you agree to hand over some of your control and equity to another company. Not only can your initial vision become diluted, but you may also be forced to take on new business and managerial challenges before you’re truly ready. In some cases, you may have to rush to grow your staff and production capabilities to keep up with demand.

On the other hand, organic growth techniques allow you to grow your business on your own timeline. Because you aren’t sharing control with another company, you can hire employees and expand sales at your own pace. Additionally, entrepreneurs who maintain their autonomy now can sell for a larger profit later when the company is fully developed.

While retaining control of your company offers many advantages over the long haul, it can make business growth challenging in the short term. Some entrepreneurs struggle to grow beyond their current marketplace, while others find themselves cut down by the competition. Additionally, new businesses must often fight to make ends meet from month to month. Fortunately, strategies exist to help startups grow their profits without handing over control to partners or investors.

Here are just a few of those strategies to help you grow your business organically:


Want to grow a business that will feed your family and employees for years to come? The first step on the road to entrepreneurial success is starting the right kind of company.

With home-based and e-commerce businesses, you can avoid expenses like rent and commuting during the early, lean years of your company. As an added bonus, working out of the home lets you write off parts of your mortgage and electric bill. You can then invest these savings back into the business to help you grow in the long term.


A common conundrum for new business owners is whether to take your full cut of the profits or invest the money back into your company. While you may be tempted to keep some of those hard-earned dollars for yourself, you should aim to reinvest gross profits whenever possible to help your business grow. Investing your own money shows prospective clients and lenders that you are confident in your company’s long-term potential.

Not sure where to put profits? When in doubt, invest in marketing, SEO and other tactics likely to generate more business for your startup. If your income permits it, you may also want to invest in employee training and technological improvements, as these can yield large profits down the line for your company.


No matter how happy your current clients are with your offerings, you will have trouble growing your business organically if you don’t put effort into finding new sales channels. If you don’t currently sell your goods online, you should definitely consider starting a website to expand your reach to other regions. Additionally, you can introduce new products, cross-market services to your existing clients and expand to different markets. For example, a company that specializes in SEO may want to expand its services to include social media and search engine marketing.

Finally, business owners should employ market segmentation to customize their strategies according to the specific channels they are leveraging and the specific markets they are trying to reach. This way, you can create unique campaigns based on customer location and demographics and watch your sales rates skyrocket.


As a new business owner, you may feel the urge to micromanage everything that happens at your company. However, the truth is that macro-management is a far more effective way of enabling organic growth for your startup.

To keep your company moving forward, you should train top employees to take over some of your daily responsibilities. While you may be tempted to keep costs down by hiring employees who will work for less, in the long run these staff members could end up costing you more if their efforts aren’t up to par. Find people you can trust to get the job done—even when you’re not around—so you can focus on growing and developing your business in the years to come.


From minimizing spending, to reinvesting profits back into the business, organic growth strategies help ensure that you will retain control of the company you worked so hard to build. Do your research, and consider all the growth strategies available in order to give your business the best shot at success.

Do you know how sales taxes are impacting your bottom line? Check out our sales tax calculator.

This article originally appeared in the QuickBooks Resource Center and was syndicated by


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