Intro: How to Start a Home Business


The American dream is filled with aspirations of being able to shed your boring desk job in favor of something more exciting.

The ultimate fantasy includes being able to work from home at your own convenience, which explains the increased interest in home-based business ideas. According to the United States Small Business Administration, over half of all the businesses in the country are based out of an individual’s home.

They point out that well-known brands such as Apple and Mary Kay were once nothing more than home-based business ideas that skyrocketed to successful platforms. Consumers who are interested in taking their own ideas for a home business to the next level need to start considering the logistics of how to start a home business.

While it isn’t rocket science to get your fledgling home business opportunities off the ground, starting a home business does require you to take certain steps. You’ll need to think through how you will make space for your home business, what your at-home business will focus on, and how you can make the most income.

AdvisoryHQ wants to set your home-based business ideas up for success, so we developed this comprehensive guide to starting a home business. Whether you need ideas for the different outlets you can pursue or just need logical next steps, you’ll find everything you’re looking for to figure out how to start a home business. 

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Selecting Home-Based Business Ideas

Before you can move forward on starting a home-based business, you have to first evaluate what you can contribute toward a new business.

There are a few considerations that every individual needs to think through prior to putting out their welcome mat for potential customers. Home-based business opportunities abound, but you have to know what you are capable of handling.

First, you need to evaluate your personal strengths, talents, and skills. Is there a particular area that you tend to excel in and are passionate about doing full-time? In order to have your home-based business ideas succeed, there should be some area of your life that allows those two categories to overlap.

If you’ve been considering what the home-based business opportunities are for any period of time, you may have already come across some of the top options. Here are a few ideas of home-based business ideas to get your creative juices flowing:

  • Vendor for arts and crafts through online marketplaces, your own website, or local merchants
  • Fitness instructor wh0 focuses on personal training sessions or offers unique group classes in public locations
  • Cleaning services to keep homes and businesses spic and span
  • Photographer for weddings, family portraits, or scenery and artistic prints
  • Website designer or app developer
  • Personal chef to help create healthy meal plans
  • Direct sales for a larger company such as Mary Kay, Tupperware, and others


There is an infinite supply of home-based business ideas that can get you started on the path to finding a career that you can be successful in and filled with passion for.

However, you need to consider what you are willing to invest into your home business prior to moving forward in any of the steps to starting a home business. Make sure that you have the appropriate qualifications, education, and materials to make that business work before you get started.

If you need to purchase equipment or attend a class to begin any of these home-based businesses, you will then need to evaluate if you have the money to pay for this initial cost to starting a home business. Some funding options do exist through loans and grants if you don’t have access to the financial resources to fund it on your own.

Ensure that any of the home-based business ideas you select will work well for your current setting. If you need everything to occur within the walls of your home, you’ll need the space and ability for potential clients to meet with you. Those who need some type of space outside of the home or need to set up appointments elsewhere will need to take this into consideration when selecting home-based business ideas.

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Write a Business Plan

If you want to know more details on how to start a home business, the first step to take would be to write a business plan.

This step may seem unnecessary if you have all of the thoughts in your head already, but putting your ideas onto paper can help you to make more thorough sketches of what your home-based businesses will look like.

Home Business

Image Source: Small Business Administration

A good business plan should give you an overview of how your company will run, how the profits will look as you are starting a home-based business, and your overall vision for the future. Consider adding all of these different aspects into your business plan to flesh out any home-based business ideas:

  • Summary and company vision
  • Detailed research regarding your competitors and the market for your product or service
  • Information regarding your product such as the major benefits and how often customers will be able to repeat purchases
  • Information regarding your services such as why they would need it, who would be searching for it, and whether they would require your services on a regular basis.
  • Marketing strategies
  • Financial projections including anticipated sales
  • Plans for funding your business if necessary


If creating all of the information for your business plan seems overwhelming as you consider starting a home business, there are resources to help.

The United States Small Business Administration offers a tool that allows you to use their website to build a profile and craft a business plan for the upcoming three to five years. With this free tool, you can set milestones and make projections for revenue to see how your vision will line up with reality.



Financial Fitness

The length of time you can spend working on starting a home business directly correlates to the amount of income you are able to generate with your home-based business ideas. This is such a critical portion of your business plan that we felt it should be addressed in a separate section of our guide on how to start a home business.

There are a number of categories that you should consider financially before your business begins. Some of them will require you to consider what assets are already available to you while others require thinking through more long-term plans. Consider some of these situations when it comes to learning how to start a home business with your finances:

  • Start-up costs:  What will you need to spend in order to get your at-home business off the ground?Understanding and budgeting for the resources you already have and still need to obtain can give you a better idea of what types of funding you will need.  
  • Financial assistance: If you don’t have enough money to make your home-based business opportunities flourish, then you will need to investigate the possibility of receiving financial assistance through loans and grants.You can usually obtain financing through equity built up in your company or through incurring a small (or large) amount of debt. Many financial institutions and lenders will offer small business loans to assist in starting a home business that demonstrates creditworthiness and a solid business plan.
  • Cash flow: Do you know how money will flow in and out as you’re learning how to start a home business? You should know how much money you need to maintain your operation each month, as well as a determination of when you will be able to break even.Knowing when your initial investments will begin to be offset by profits can help make your home-based business ideas feel significantly more achievable.
  • Marketing costs: In addition to developing a solid marketing plan to attract customers to your new home business, it will be imperative to know how much that marketing will cost you.The price of a billboard, direct mailing campaign, or social media advertisement will vary according to location, service, and timing. Get an estimate on how much you intend to spend on marketing and what the payoff from that could be.


Understanding the way the money flows through your new home business will lend you improved functionality.

You can make a plan in advance of opening the doors or starting a home business to be better prepared for the eventual cost and revenue that your business incurs.

For those who find themselves challenged by all of these tasks, you may want to consider enlisting the help of an accountant or bookkeeper until you can get the hang of it.

This is another step to consider before you get too far into learning how to start a home business. You will need to learn how to add professionals onto your team as necessary to give you the assistance you need.

Home-Based Businesses

Image Source: FreeImages.com

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Determine Your Legal Structure

Once you have a clearer idea of the intricacies involved with starting a home business, you can begin to think through how your company will be structured. There are only a handful of available categories, but it’s important to choose the one that will most accurately represent your company:

  • Sole proprietorship: You own the business all on your own.
  • Partnership: You and at least one other person own the business together.
  • Corporation: Shareholders must share money or property in exchange for stock. The corporation may assume responsibility for income, losses, and deductions or pass it on to their shareholders.
  • Limited Liability Corporation: Qualifications for this structure will vary depending on the state.

Once you have decided how to start a home business with one of the above structures, it’s time for you to begin filing all of the appropriate paperwork. You will need to check with both the federal and state standards for which business licenses and permits you will need to conduct business in your area. Starting a home business cannot happen without the appropriate documentation required by the government at the federal and state level.

This is where it comes in handy to know exactly what products and services your at-home business will offer. Starting a home business requires plenty of paperwork, and filing for the correct permits. You can view which permits are required by the federal government and your state through the Small Business Administration.

If you are registering your business under a different name than what you will use to sell your product or service, you will also need to register a DBA with your state government. DBA stands for “doing business as” and can often be seen in relation to sole proprietorships.

For example, you may register your sole proprietorship under your full name but operate under the name “Steve’s Super Slogans” for a copywriting business.

Unlike the business licenses and permits filed with the federal and state government, filing for a DBA is not a requirement for starting a home business. You can learn how to start a home business and bypass this step entirely if it does not apply to your home-based business ideas.

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More Paperwork for Home-Based Businesses

Learning how to start a home business is often an adventure in discovering which types of paperwork need to be completed at the appropriate times. Now that you’ve handled the paperwork that allows you to begin the process of starting a home business, it’s time to look at the more routine paperwork involved in bringing your home business opportunities to pass.

Learning how to start a home business means going through a lot of checklists to determine which pieces will apply to your business structure. In some circumstances, starting a home business will require you to register for an employer identification number through the IRS.

This is only necessary in a handful of circumstances and has exceptions in each category. You can see the full guidelines through the IRS website to determine if any of them apply to you as you’re starting a home business.

The other significant part of the paperwork involved with starting a home business is registering to file your taxes. You will need to file your taxes on a regular basis to make sure that you are paying the sales tax to the appropriate places. In some cases, this can actually be filed electronically through your state’s website.

You’ll need to see what forms are required for your specific tax obligations for the federal government and the state and county you operate in. When you file your paperwork (located here), you’ll have to determine whether you also need to pay the additional taxes associated with employment to cover:

  • Worker’s compensation insurance
  • Unemployment insurance
  • Temporary disability insurance

The necessity of filing these papers when starting a home business depends on your state standards. For example, temporary disability insurance is only required in the states of California, Hawaii, New Jersey, New York, and Rhode Island. Make sure you check into what you need to file in advance.



Conclusion: Being Prepared for Starting a Home Business

Starting a home-based business can seem like a dream come true at first, but it’s easy to get swept away in the finer details. If selecting the appropriate home-based business ideas isn’t challenging enough, figuring out what paperwork is required for your home-based business opportunities can be overwhelming.

Fortunately, there are only a few major steps to filing the paperwork required by the federal and state governments:

  • Appropriate business licenses and permits
  • Filing for a DBA, if necessary
  • Filing for an employer identification number, if necessary
  • Registering for federal and state taxes

Once you can knock those things off of your punch list, you will be several steps closer to having a successful home business. While your home business opportunities may feel slightly distant right now, you can bring them that much closer by focusing in on what you need to do next. With all of these details about the best ways for how to start a home business, you should be on the right path to making your home business flourish.

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