If you’ve been dreaming of starting a business from home but think you’re not qualified, there’s probably less holding you back than you think. There are many small business ideas that will allow you to make a reasonable income from home.
There’s no need to take classes, become an accountant, or hire a manager. You don’t even have to spend months filling out complicated paperwork or cutting through legal red tape.
You can probably do everything you need to start a successful home business in the course of one afternoon. Starting a business won’t ensure success or even secure a sale, but to begin a journey, you must take the first steps.
All too often, we are our own biggest stumbling block by allowing fear of the unknown stand in the way of success. Taking these steps can give you the confidence you need to take action and turn your goals into reality as I did.
I spent a year reading and listening to podcasts about buying a rental property but I was scared to take that first step to make my dream a reality. I still had a mortgage on my house and very little money in the bank, I didn’t know how I could get my business started.
But I just kept taking small steps toward my goal and eventually, one rental house turned into six, but the hardest part was taking that first step.
Step 1. Postpone Branding
You may feel doubtful when your first step is to avoid something that’s been plastered on every business article you’ve ever read. However, if you’re spending months or years dreaming up the perfect company name, you’re not making money.
Even worse, you’re not launching your business idea out into the world. Branding your business before you begin not only puts your priorities out of order, it gives you limits you don’t need as a beginner.
Branding only works when it mirrors the company’s actions and ideas. As you get your company off the ground, your brand will emerge.
It’s perfectly fine for your home-based business to operate under something other than your company name. Besides, a company name is something you can easily change in the future.
Step 2. Get Your Employer Identification Number
An employer identification number (EIN) is a tax number used to identify your business. It’s legally required if you intend to hire employees or form a corporation, LLC, or partnership.
Even if you expect to be a one-person show, getting an EIN is smart for business and security reasons. Skipping this step requires you to use your social security number to identify your business, making you vulnerable to identity theft.
The easiest way to get your EIN is to apply online. If you want some more good news … It’s free.
Step 3. Register Your Trade Name Before Starting A Business From Home
Unless you plan on using your legal name for your home business, you might be required to register a trade name. Generally, state law mandates whether you need a trade name.
These laws can vary from state to state, but if your name isn’t a part of your company’s name you should check your local requirements.
Registering your trade name is a simple process that will require you to fill out a form with your contact information and a few details about your business. If you’re working with partners, all names involved with the business will likely be needed on this form.
Step 4. Get Your Business License
You will be required by your city or county to purchase a license to start your business from home. If you don’t know the requirements in your area, the Small Business Administration provides a handy guide to help you understand the combination of licenses you need to legally run your business.
A business license is simply a means of holding you accountable for the services you provide and the necessary taxes. While it might seem unnecessary if you’re only using your home business for extra income, you could face potential legal issues without it.
You may be able to get your license online. Otherwise, a visit to your city or county office will likely do the trick. You will need to fill out a form with the details of your business.
Use your Employer Identification Number on this form instead of your social security number to increase privacy. You might be required to pay a small fee to get your business license.
Once you’ve taken this step, you have officially started a business from home.
Step 5. Starting A Business From Home Might Require A Business Plan
“A goal without a plan is just a wish.” This brilliant phrase was first uttered by French aviator and writer Antoine de Saint-Exupery (author of “The Little Prince” written in 1943) over half a century ago.
It is a fitting description of how so many people face their hopes for the future. Whether your goal is to complete your education, get a better paying job, or to thrive instead of just survive; wishing won’t get you there.
If your goal is starting a business from home, it will take more than a plan. You’ll have to take action.
If you need financing to start your business, you will need to know how to set up a business plan. But, even if you already have the money you need to get started, a business plan will help you figure out how much money you need and what direction your business needs to go.
Your business plan is a map—a way to list the necessary steps you need to take to achieve your goals. A business plan is a tool that you’ll use to manage your business and stay on track.
In fact, your home business doesn’t need a formal business plan; it can simply be a list of milestones you want to reach and financial goals you hope to achieve.
If you don’t have to present to investors, don’t think of this as a formal document, but instead an overview of your business, the problems your business will solve, and your target audience.
Creating a plan will help you uncover any areas of the business that you may not have thought through. If you need detailed information on writing a business plan, there are plenty of online resources available.
Step 6. Open a Business Bank Account For Your Home Business
To truly calculate the financial success of any business, you need a separate bank account. Even if you are the only person involved with the business, your personal finances can quickly get in the way of the clarity you need to run your business.
As your business grows, the importance of keeping your company a separate entity from your personal life only becomes more important. Opening a business bank account can protect you from unexpected problems and provide the necessary convenience for smooth transactions.
I have my business account at a local credit union. There are so many options available when it comes to banking, so be sure to take your time and compare fees and benefits before making a decision.
Reasons a Business Account Is Vital
- Legal protection – If for any reason, your customers aren’t satisfied with your exemplary service and decide to sue the business, your personal finances cannot be dragged into the lawsuit.
- Convenience – Distinguishing between personal and business expenses is difficult without a business credit card. Additionally, a business credit card may have more to offer than a personal account.
- Tax Purposes – No matter what kind of business you own, business taxes don’t mingle with personal taxes. You will need to file your business expenses and income separately from your personal taxes to get the proper allowances and deductions.
- Accounting clarity – You might not need to take a professional accounting course to run your business, but you do need to properly keep up with the cash-flow entering and leaving your business. A separate account will allow you to make business size deposits and deductions without a hassle.
Everyone deserves financial freedom, and the right information can get you on the path to reaching yours. If you don’t feel comfortable starting a business from home, then maybe this list of stay at home mom jobs is more suitable for you.