There are numerous advantages to launching a home-based business. Starting from home is one of the safest entries into business ownership.
Fundera says that 69% of startups are home-based businesses. Entrepreneurs are drawn to home businesses for a variety of reasons, including the opportunity to save money on expenses and taxes.
According to Digital, 32% of Americans quitting their jobs are starting businesses, and 60% of new entrepreneurs used the pandemic lockdown to learn about starting and running a business. If you’re thinking about starting a business of your own, a home business might be a cost-effective option.
Launching from home allows a new entrepreneur to get started and test the waters before investing in a commercial facility (if that’s the ultimate goal).
Weigh the Challenges and Benefits
Having a business idea and even a basic business plan is a good beginning, but still not enough.
The Arkansas Small Business and Technology Development Center can assist you through the process of establishing a home-based business. First, let’s consider some of the challenges and benefits of starting a business in your home.
Potential Challenges
- Separating work and home life and limiting personal disruptions.
- Having adequate space for things like inventory storage and order processing.
- Staying motivated to do work in a home setting.
- Working too many hours, because there is no clear divide between personal and professional life.
- Living in an area with restrictions on the type of business you may conduct.
Main Benefits
- Minimizing financial risk. Because less startup capital is necessary, you are taking a smaller risk with your new business.
- Getting to be your own boss.
- Reaping the tax advantages of a home-based business.
- No longer needing to commute.
- Enjoying more personal and professional freedom.
Can You Have a Business Where You Live?
If you decide that a home-based business is the appropriate option for you, review local zoning requirements. Check to see if you can start and run a business from your home.
If you live in an area where there is a homeowner’s association, make sure that you are allowed to have a home-based business there. Research whether your neighborhood or subdivision has any restrictive covenants about operating a business.
Also, look into any other city, town, or county ordinances that may apply to operating a business from your home.
Give Your Business a Professional Address While Protecting Your Personal Information
Lastly, pay attention to security and professional appearance when doing business from home.
Consider getting a mail receiving service (or virtual office address) or a post office box. These are good practices if you live in an apartment or if you don’t want your home address to appear on your business materials.
Running a home-based business can be just as difficult as running any other type of business. Don’t give up! With some modifications, many types of businesses can be conducted from home.
Be sure to do your homework and utilize all the resources available to you.