How to Start a Small Business at Home: 5 Tips for Success

Starting a business from your home is nothing new. In fact, 69% of new entrepreneurs in the US start their businesses at home. Opening and running a business is an exciting venture but when it comes to starting it from your home, it demands foresight, proper due diligence, and planning.

This type of endeavor isn’t for everyone. You must take a realistic look at the type of person you are and assess whether a home-based business is something you’ll thrive at. Since there are so many distractions in this type of environment, you must have a high level of discipline and motivation to stick to your goals.

If you’ve been thinking about starting a small business out of your home, below we share some tips for success before mixing your personal and professional space.

Find a niche

The most important thing of all is to have a profitable business idea, or in other words, to find your niche.

Do you want to work on developing a new product or improve an existing one? Maybe you want to offer a service you think is missing or just start your webshop? Think about what you can offer that will make other people’s lives easier or better.

Some people have an obvious business idea right from the start, while others have several. Remember, it’s never good to have too many balls in the air, especially if you plan to run the business on your own at first.

Remember to be critical and realistic. So don’t just go by what your family and friends say because they can often tell you want you to hear to avoid hurting your feelings.

A little further along in the process, it may be a good idea to do a market survey to find out what the customers themselves think of your idea. You can do this, for example, through interviews, digital surveys, or focus groups.

Write a business plan

A business plan is important for many reasons. If you fail to plan, your home-based business might not make it. If you’re unsure of how to write a good business plan, look for a comprehensive business plan template that will help you get started right.

A business plan serves as a tool to specify your goals and how you will go about achieving them. It also entices you to examine the market and your main competitors, making it easier to discern your business’s key strengths and weaknesses.

The business plan can also be an important document if you plan to apply for financing during the start-up phase. The same applies if you are interested in pitching your ideas to lenders and investors.

Decide on your business’s legal structure

Choosing the right legal structure is an important aspect of running a home-based business. A sole proprietorship might be right for you if you want to get started quickly and without any hassle. This type of business model doesn’t require you to have a partner or executive board to answer to and you are in charge of making all the decisions. However, remember that in case of any debts or lawsuits, you will be the one responsible.

A limited liability company, on the other hand, provides more flexibility but there is more paperwork to fill out and you must register your business with the state.

Learn tax laws for your home-based business

The way your small business is taxed depends on its business structure. However, operating a home-based business entitles you to additional tax deductions, such as for direct business expenses, operating costs, and vehicle expenses.

Conduct your research on the tax laws so you don’t get caught off guard once tax season comes. Also, consult a professional, like your accountant, who will tell you what tax deductions are available for your home-based business.


A good network is important for all entrepreneurs, especially for those who work from home. By joining a business network and making new contacts, you can create better conditions for your business. You also become part of a community while you get the opportunity to make your business visible.

As a beginner, it can also be good to find a mentor who has gone through the same journey as you. Starting your own business at home can often feel quite lonely, especially if you don’t get support from those around you. A mentor can give you valuable advice and motivate you to continue the journey, even when it feels hard.

The great part of running your small business from home is being your own boss and the flexibility in planning your daily routine and tasks. By following these tips, your small business at home will thrive in no time.

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