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Blog Oct 22, 2021

How To Start a Business From Home

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According to Fundera,
there are around 15 million home-based businesses in the U.S.. This includes start-ups, small businesses, and other non-employer businesses. There are several advantages to starting a business from your home. Reduced overhead costs including rent, utilities, and supplies for a separate location is one of the top benefits. 24-hour access to your working space can be another bonus, as it can increase security and give you more flexibility in your working hours. Home-based businesses can also write off certain expenses on their taxes that other small businesses can’t. 

It should be noted that you’ll still need the proper permits and licensure to practice your services or sell your products, even when operating out of your home. For example, a home-based hair salon has some specific requirements to be licensed, including separation from all living spaces by a permanent wall. These requirements will vary by state, as well as your business type. This guide can help you put together the basics needed to start a business from your home. 

Expanding on Talents and Skills

The first step in starting any new business is identifying how you can fill a need with your talents or skills. For example, someone with talent in painting and drawing may want to start offering paint classes in their garage. While this is a salient idea, it isn’t as simple as buying a few extra easels and opening the door. To create a viable product or service, you need to hone your professional skills.

Let’s continue with our painter example — there may be a high demand for art classes in your area. However, if you only know how to draw landscapes, and those are the only classes you offer, you’re alienating potential clientele who may have different interests Expanding on your talents and skills as a home-based business is especially important because your client-base is more often than not going to be locally based. This means you’ll need to offer a wider range of services or products that offer unique value, rather than relying on offering the same value to a wide range of customers. 

There are several ways that you can expand your talents and skills as a new business owner, including:

  • Classes;
  • Workshops;
  • Online training; 
  • Tutoring;
  • Apprenticeship. 

How you go about honing your craft will depend on the skill you’re looking to expand, as well as the opportunities in your area. You may also choose to pursue business-oriented classes, such as bookkeeping or marketing, to hone your overall skills as a business owner. This can have pay-offs in the long run. 

A Winning Business Plan

Crafting a winning business plan is one of the most important aspects of starting a business. You don’t have to be a business professional to create a well-crafted, successful business plan. The most important part of any business plan is that it’s clear and purposeful. The purpose your business is serving should be initially apparent, as well as the resources you have at your disposal, and the goals you hope to achieve. 

The basics of all business plans include:

  • An executive summary and company description; 
  • Market analysis to illustrate need;
  • Company management structure;
  • Funding sources or budget projections for costs;
  • A marketing plan. 

Fulfilling these basic requirements of the business plan will help you pin down exactly how your business is going to get started. This can help you acquire funding, as well as licensure or permits. 

A Well-Thought-Out Budget

Even though home-based businesses tend to have reduced costs for things like rent, lighting, and other overhead, that doesn’t mean that you don’t need a budget. Like any business, there are fixed and variable costs, profits and losses, and emergency preparations that all need to factor into your budget. 

You can make your own budget for your business, or consult with a professional if you’re just starting. Things that need to be included in your home-based businesses budget include:

  • Any utilities that will be used to power machinery or help provide services;
  • Marketing costs, such as paid ads, flyers, and branded materials;
  • Website hosting costs;
  • Raw material costs;
  • Insurance premiums and licensing costs;
  • Cleaning and office supplies. 


As a home-based business owner, you may also choose to factor in things like your rent, into your budget, but this is up to personal discretion. A benefit of being a home-based business is that you can do things to actively save money on utilities and other costs. For example, using energy-efficient light-bulbs can help you save on energy for your business. This is both better for the environment, and cheaper for your bottom line.  

Safety Measures

Your home-based business still needs to be protected, like any other business. This could include physical protections, including installing cameras, locks, or motion-detection lights. As a home-based business, a break-in could jeopardize more than your safety, but your ability to make a living. This is why you should create an emergency preparedness plan for your home-based business. Not only will having an emergency plan protect your home-based business, but it can also protect your family, yourself, and your pets as well. 

Your emergency plan should be tailored based on where you live, as well as your type of business. For example, if you live somewhere prone to flooding, you can take precautions that can minimize both property damage and personal injury. Disaster insurance is another way you can help protect your home-based business. 

Cybersecurity Measures 

The physical assets of your business aren’t the only thing that needs to be protected. Your digital assets also need to be secured. In 2020, 47% of all small businesses experienced a cyber attack. This could be because hackers assume small businesses will have less, or easier to exploit protections in place. As a home-based business, a cyberattack could not only jeopardize your business but your personal information as well. This is why you should take certain measures to secure your digital business assets. Tools you can use include: 

  • Encryption Software: Encryption software can help hide proprietary data from unauthorized accounts. Unless you’ve authorized someone to look at a document, email, or other digital files, it will appear scrambled, hiding your data from prying eyes. 
  • Two-factor Authentication: This is a great way to keep your accounts secure, especially if you use one computer for both work and personal use. Two-factor authentication uses a password, as well as another measure of security, before allowing access. This could be a pin, pattern, or even biometrics. Some require another device to receive a code. So even if your password is compromised, hackers will still not receive automatic access to your account. 
  • Mobile Hotspots: Unsecured networks, often offered by hotels, coffee shops, airports, and other public places can allow hackers heightened access to your device while you’re connected to the network. Having auto-connect on your wi-fi could further increase your risk, as you could be connecting to a network and giving hackers access to your device without your knowledge. By having your own portable network, you can travel freely without worrying about compromising your internet activity. 

Many devices come with security detection software built-in, which can also be a great tool. By running this software routinely, you can increase your likelihood of finding anything out of the ordinary on your device, before it has a chance to cause damage. 

Starting a home-based business requires as much care and planning as starting any business — however, your timeline may be moved up because you don’t have to wait for a physical place to be inspected, cleaned, decorated, and so on. This is just one of the many reasons why people are opting for this business model.

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