Two out of every three UK employees want to start a business for themselves. And one of the best ways to do this is to create a business that can be run from your existing home.
But while setting up is arguably easier than ever, it’s still a big commitment. So what are the key steps you need to take to make your bright shiny home business idea a reality?
Planing your home business
Not everyone needs a written-up ‘business plan’, but it helps, especially if you’re starting up in a new field. It doesn’t have to be comprehensive, but it should include your core idea, details of who your customers will be and the growth and financial milestones you’re looking to hit.
You should also map out the essential activities needed to make a success of your home business – this could be anything from registering for a virtual business mailing address to setting up a website.
Getting your house in order
While some home businesses can be run from your sofa with nothing more than a laptop, others might need you to move some things around.
You may want:
A dedicated, professional-looking office or studio for meeting clients and customers.
Storage space so that your inventory doesn’t sprawl into the rest of your home.
To let your neighbours know what you’re doing, so that their lives aren’t disrupted by excessive noise or by delivery trucks showing up outside.
Planning your finances
Budgeting is crucial, but it doesn’t need to be complex. You know how much money you’re hoping to make, so the next thing is to consider what your outgoings will be. Do you need to buy any one-off items, like a new laptop, specialist tools, or a comfy office chair? Are there other ongoing fees involved, such as software subscriptions, advertising costs or equipment leasing? There will always be surprises as you go, so you might want to set aside a small ‘contingency budget’ too.
Many business owners prefer to keep their business finances separate. Signing up for a business bank account makes everything easier to track and follow, especially if there is a lot of money flowing in and out of the business.
Get on top of the admin
Unfortunately, some aspects of starting a home business aren’t all that exciting. But they're still very important!
You’ll need to check if you have to pay business rates, as well as examining various other tax implications. And you have to register with HMRC when you’re starting a business, which means deciding which business structure is suitable for you – sole-trader or limited company. If it’s the latter, you’ll have to register your business with Companies House.
Oh, and businesses that turn over £85,000 or more need to register for VAT, as soon as they reach the threshold.
In fact, you might consider hiring an accountant to complete your tax returns each year and provide a handy source of impartial advice as you go. A good accountant will usually know about all of the above and – trust us – they’ll enjoy telling you about it!
Planning the fun stuff
Setting up a home business is supposed to be something you enjoy. So if you’re starting out solo to pursue a particular passion, think where this could take you. Are there professional organisations you can join, extra qualifications you can work towards, or similarly-minded local professionals with whom you can team up?
On the other hand, if you’re starting a business from home to claw back your work/life balance or spend more time with your family, you’ll enjoy planning out how many hours or days you’ll work and how you’ll structure your time. Why not think about the perks you can introduce that were never possible in your old job?
If you’re well-prepared with a business idea that suits you, you’ll soon find that running a home business isn’t just an excellent way to earn a living – it’s a way to take control of your life and spend more of your time doing things you love.