You cannot start a business in isolation. Business owners consider many factors before setting up a business. Some of these factors are known, and most are unknown or uncertain.
However, lately, there are more opportunities to start a new business. Technological advancement and globalisation allow individuals to convert ideas into reality much quicker. Business owners have the liberty to initiate on a smaller scale followed by rapid growth.
You can start a business online or from your home without facing any hurdles. Most successful businesses started from a home garage. A common form of starting your own business is from your home—for example, a craft business, an online blog and home bakery, landscaping business, and so on.
The article will help you gain insight into:
- What is a small business?
- Type of small home-based businesses
- How to start a small home-based business?
- Other requirements for a home-based business
- How to make a home-based business successful?
- Wrap up
What is a small business?
Small businesses form an essential part of the economy as they support local and national economies. The UK has 47% of small & medium enterprises that help boost the country’s economy at a large scale.
It also helps to make the market more competitive and dynamic. The most significant advantage of a small business is that it adds to local economic development at a large scale.
Types of small home-based businesses
In today’s globalised world, home-based businesses are of different forms. In some, you need room to be converted into a spare warehouse, while others are online businesses.
You can use your existing space to start these businesses.
There are many ideas to start a business from home; the following are some opportunities to explore and establish a successful home business:
- Bulk buying of products
A simple concept of importing products and selling them for profit works out quite well for homemade businesses.
You can purchase products available in limited supply but have a solid demand and sell at a profit.
- Selling homemade products
Hand-made products can be the next best option. You can have the market to sell cost-effective, qualitative products like candles, food, apparel and cosmetics. You can use a range of precious metals, stones and antiques to convert your passion into a viable mode of earning.
- Selling your service
Services are even easier to start up at home. There are opportunities to share your creative expertise with big companies. Designers & marketers generally freelance or provide consultation to multiple clients. The home-based services are:
- Buying an existing e-commerce business
An established e-commerce business can be a good source of investment income. Do due diligence before buying one. A variety of factors like revenue, profit, assets will work as a deciding factor.
Before you go on purchasing one, make sure you have funding in place. Check our guide on how to Financing Your Business During COVID-19.
- E-book publishing/ writing
Publishing can be managed initially in sync with a full-time job. E-books are pretty popular to start initially. Promoting your book requires maximum effort.
You can also start writing books by deciding what premise to write, editing and publishing on different platforms.
Blogging space is a significant area that has evolved as a home-based business opportunity. There are 5 million blogs published every day on WordPress. The majority of these are by people who are amateurs. It would help if you understand search engine marketing, writing, editing, and digital marketing mechanisms.
- YouTube Vlogging
YouTubers make a good amount of money by simply putting up their life on the internet. More than 37 million youtube channels mainly belong to individual creators who create a set-up and offer engaging content to the public. After having a subscriber base, you start getting brand offers for promoting products/ services, which will help you make an extra amount.
It is an arrangement where you upload a supplier’s products on your website and allow customers to place orders. Once the order is placed, you purchase the product and deliver it.
Essentially, you are in a system where you sell products without holding inventory.
It offers flexibility as your cash is not tied up. The profit margins can be tight. The decision rests on the choice of picking the right products with the right margins.
The list is unending, and it demands prominently only two things:
1. Action plan
Plan of action as in how are you going to proceed ahead with a passion. How are you going to measure results?
The later part of the article will help you know the methodology for setting up a small business at home.
Check out our guide on What is a business model & how do I build one?
How to start a small home-based business?
The idea of setting business is complex, but you can simplify it by following the specific steps mentioned below:
- Listing business ideas
What you are planning to pursue as a business should be crystal clear. Solid market research is required concerning your products & services. The study will help you gain insight into what is the exact market position. Is there any possibility of gaining experience and learning from other’s advice?
- Putting together your business plan
Business plans help you to stay focused and achieve the milestones decided. The business plan should underline details about competitors, customers and financial projections.
- Deciding the legal structure
There are few ways you can operate a business in the UK. For example, a sole trader, limited liability company, partnership, CIC and so on. Limited companies and sole traders are by far the most popular ones.
Each of these has distinct advantages. Check our guide on Sole Trader vs Limited Company.
- Make the home business ready
For some businesses, certain essential factors to be kept in mind are home contents insurance, health & safety and establishing a permanent address.
- Applying for home business insurance
Setting up a home business without proper insurance can be risky. Vulnerabilities can expose your stock or inventory to higher risks.
- Registering business
Every UK business needs to register with HMRC. If it is a limited company, then it requires a registered office.
- Set up a website
A small business needs a website that will help the owner connect with the customers initially.
The internet is filled up with a plethora of websites, but you need to make sure that your website contains the following :
- A clear view of who you are
- Simple web address- domain name
- Easy contact details
- Quality content
- Customer testimonials
- Regular blog posts
- SEO optimised
The website should be designed in a friendly manner to make it attractive for readers and visitors.
- Set up business email accounts
The next important step is to set up a formal business email account that will help fulfil various obligations of looking professional, marketing your brand and establishing trust with key players in the market.
It is a signal of business credibility.
- Set up social media accounts
You need to manage social media in sync with your financial accounts because it directly impacts the sales of the business.
A majority of customers relationships are built through social media channels. It helps to increase brand awareness and customer engagement.
- Open a business bank account
Make a clear distinction between personal and business finance. Setting up a bank account with your local bank is easy.
It serves as an effective mode to monitor and manage your business expenses and income.
Other requirements for a home-based business
Home-based businesses are registered to your home address irrespective of whether you are running an online shop or you are going out & meeting clients.
There are specific requirements & tax responsibilities according to the nature of the business, which is as follows:
Starting a business on a rented or financed property would require permission from the landlord, mortgage provider in addition to the consent of the local council.
If the home is not undergoing any significant changes, planning permission is not needed. Businesses in residential areas have to comply with this permission.
- Business rates
Business rates are taxes on property used for business purposes. There are no business rates if a small part of your home functions as an office.
In some cases, you need to pay if:
- The property is split into domestic & business parts
- You are selling things to people who visit the property
- You employ people at home
- You have made significant changes to run the business.
- Proper safety certificates
If it is working on a laptop, no safety checks are needed. But if it’s a homemade food/ bakery delivery business, health & safety is a priority.
Ensure that safety & health certificates are up to date as they can largely hamper your business processes.
How to make a home-based business successful?
All big success stories start from small ideas. Amazon & Apple are the perfect examples. It’s not important where you work from; the essential part is how to manage that successfully.
A home-based business will be successful if you give proper consideration to the following things:
|Validate business idea||· Check the idea thoroughly. |
Investing time, money & energy on something not fruitful will lead you nowhere.
|A positive work environment||· A positive work environment is a prerequisite. |
Instead of finding the right furniture & equipment, focus on the suitable space & time.
|Dedicated team||· Realise that you are not a master of all jacks. |
A key to a successful business is to have an excellent team.
Key members of the team should be legal, finance, operational and sales/marketing.
|Can-do attitude||· The entrepreneurial journey is usually not well defined and is full of uncertainties. |
So you will need a can-do attitude to get tasks done.
|Low costs||· Always try to keep your costs down. |
The overheads like utilities, insurance, marketing expenses require efficient management.
|Understand finances & taxes||· Create business identity & understand taxes.|
|Consistency||· Evolving business at a consistent pace.|
|Cash||· Never lose sight of cash- Remember, Cash is King!|
The United Kingdom alone is home to 5.94 million small businesses that are either home-based or running remotely.
They contribute a lot to nation-building as they help to generate revenue at an enormous pace.
Setting up a business is an easy process, but all you need is a clear-cut goal, a dedicated action plan and an excellent team.