How to Start a Small Home Business

Set up a home office. Find a space that you can work from. Yes, it's wonderful to be able to work from home, but you need to treat this business like a job. Your home office should be a space that can be entirely your own. You will need a phone and Internet connection as well as a work / desk area. Office equipment such as a computer, printer and filing cabinet, as well as office supplies, will need to be purchased and stocked. Will you need additional storage space for your product or supplies? Is a room enough space or should you explore taking over the basement or garage? What space can you use to start up the business and then later expand into? Measure your space. The square footage dedicated to your home business can be deducted from your taxes. If you are setting aside an entire room (such as a spare bedroom, basement or garage area), consider paying "rent" to the house from your business, also a business tax-deductible expense. Remember, at least 8 hours per day will be spent working to make your business grow and prosper. Making your office a reasonably comfortable and organized space is important to keep your new business growing.

Know your financial situation. Study your finances and ask yourself some tough questions. How much are you willing to invest in your business? How much can you AFFORD to invest? Set this money aside to be used ONLY for the business. Promise yourself that once that money is gone, the business should be self-sustaining. Putting more money in when the demand for your work isn't there will not help you get ahead. Draw up a business plan. Include marketing strategies and an operating budget for the business per month. Contact your local Small Business Administration office--it has volunteer businesspeople who are willing to assist with this aspect of your home business. Local technical colleges often offer the services of their students to help design brochures, flyers and logos at little or no cost.

Hire an accountant and a lawyer. Make sure you are compliant with all laws and restrictions in your area. Apply for permits that may be needed. Talk to the accountant regarding tax incentives for home-based businesses and small businesses. Are there any grants that you might qualify for? Contact your bank to see if it has a credit card program that you can use only for your business. Sign up for PayPal or a similar service and use it for credit card purchases online. Will you be shipping items? Arrange an account with US Postal Service, UPS or FedEx for delivery options. The US Postal Service provides free shipping boxes and labels that will help to cut some of your expenses, and postage can be paid for and printed out on your own printer, saving a trip to the Post Office.

Do your research. Is there any other item like yours on the market in your area? What kind of prices is the competition charging? Can you afford to undercut them or match their charges? All of this must be considered before you even open your doors. The more you plan, the better run your business will be. Consider any and all drawbacks, options and possibilities you can think of and plan for them. Better to plan ahead than to panic later and make the wrong decisions.

Prepare to "open" your business. Have your stationery, business cards, product stock, etc., all in place. Begin advertising early so that when you open your "doors" you will have business waiting for you. Have a good customer-service policy in place. Set written guidelines for returns and refunds to limit any confusion.

Confer with your family. Make sure they understand that even though you are home more, you are still working. You need to be able to conduct your business professionally, whether in person or on the phone. Screaming babies in the background of a telephone meeting will not impress any potential client. Include your family in your business. If you are handing out flyers or mailers, make it into a game for the kids. They will feel important because they helped you and will understand that when you say you are working... you mean it.