It's essential to take the right steps to lay the foundation for small business success in the digital marketplace.
- Choose a company name
- Write a business plan
- Learn the legal requirements
- Arrange for technical support
You can improve your odds of home-based entrepreneurial success by taking the time to consider a few key points about your proposed enterprise. What's more ideal than owning your own business? The answer is owning a company that you run from the comfort of your home.
A growing number of entrepreneurs are starting home-based online businesses. However, it's essential to take the right steps to lay the foundation for success.
The fun part: Choosing a name
Business is about conducting transactions with people. You should think about that when choosing your name. Effective and professional communication can make or break your business, so you want to choose a name that projects the right image.
Your business name is one of the most important parts of shaping the image of your brand. Of course, your tastes will influence the business name that you choose, but you should also think about how you want customers to view your enterprise.
You must choose a name that’s creative and unique. You want a business name that makes sense for your service or good. Also, you don’t want to choose a name that customers may confuse with another business. Nor do you want one that may compel an existing proprietor to sue you.
However, it's essential not to overthink your choice. In the beginning, you don’t need to pick the perfect business name. You can change it at any time between now and when you launch your business. You do, however, need to solidify your decision by the time you’re ready to start registering your business. Before you open your doors, you need to register with the appropriate municipal and government agencies.
It’s also a good idea to register a website for your business, even if you don’t plan to use it right away. Registering your website name will protect your business name from domain squatters, who look for companies without websites hoping that, one day, the owner will pay a handsome fee for the right to use the domain name.
Also, choose a name that evokes a positive image. A surefire way to minimize sales is to choose a name that offense customers. In addition, you’ll want to choose a name that will compel customers to take your enterprise seriously, but not so professional that it includes jargon that your ideal customer won’t understand.
Finally, keep it short and sweet. Google is the first place most consumers look to find out information about businesses. You want to make sure that your business name is short and easy to remember so that customers can find you.
Write a business plan
Nearly any consultant will recommend that you write a business plan – although some entrepreneurs may disagree. A business plan is not a guarantee of success. However, it is a practical exercise in figuring out all the things that you need to do to improve your chances of success.
Every business plan is different, but most have common elements, for example, the:
- Executive summary
- Business description
- Market analysis
- Product or service description
- Sales and marketing strategy
- Financial plan
Some business plans also include an optional appendix for information that's too cumbersome for the central part of the document.
Together, this is a lot of information to consider. When you present your plan to stakeholders – for instance, investors or lenders – limit it to two or three pages. There's no point in submitting a 20-page business plan that someone will never read.
The business environment is fiercely competitive. Resultantly, you’ll need every advantage at your disposal. Therefore, you should also consider anything that you can leverage to your advantage when creating your business plan.
For instance, veterans have unique opportunities in the form of small business loans, credit and other funding explicitly intended for the nation's former soldiers.
As an example, the Small Business Administration sponsors the SBA Express Loan Program, which serves veteran-owned small businesses. Veterans can go through the program to apply for small business loans of up to $350,000. Also, the SBA’s Veterans Advantage Program offers business loans with better terms compared to current market rates.
Learn the legal requirements
Even though you're launching a home-based business, you may still have to comply with some legal requirements. For instance, your municipality may require you to apply for tax registration or an occupational license. Depending on your field or industry, you may also have to file your business with state or federal agencies.
For some aspiring entrepreneurs, the cost of hiring a lawyer to sort out legal issues may prove burdensome. If a lawyer isn’t feasible for your budget, visit your local Small Business Administration. They have branches across the United States, and they’ll also connect you with SCORE. The nonprofit organization is staffed by experienced executives who will volunteer their time and provide you with their expertise to help you launch your business. If you're a senior citizen, you may also want to visit AARP's small business center.
It's also essential to protect your home-based business dream so that a small mishap doesn't end your enterprise before it even gets started. Accordingly, it’s a good idea to purchase additional business insurance – whether you own or rent your property.
A typical homeowner's or renter's insurance policy does not cover business activities. Depending on your business, you may pay an extra $100 annually for about $2,500 of additional coverage. The actual cost will vary based on your type of business, the kind of work you will perform and the amount of inventory that you’ll need to protect from damage or theft.
Find the right technical support
Nearly any business can benefit from technology. Accordingly, it makes sense to add tech skills to your executive toolkit.
As a home-based small business owner, you most likely won’t have the budget to hire a tech support person to fix things every time that something goes wrong. Fortunately, you can get up to speed quickly by taking a computer class at your local community college. If you use Apple products, such as a MacBook, you can take lessons at an Apple retail store.
If you need to conduct presentations, teleconferences or videoconferences, you'll also want to brush up on a few digital presentation tools. Some presentation tech vendors are:
Each provider offers a user guide that will walk you through their product. [Interested in a business phone system? Check out our reviews and best picks.]
You’ll also need to consider the primary technology that you can use to run your business. For instance, it may surprise you to know that, today, many small businesses with a limited budget can afford to take advantage of data analytics tools. Every business is different, but most enterprises can benefit from a few common tech resources, such as:
- Accounting and auditing software
- Cloud storage and backup systems
- Communication tools
- Customer relationship management (CRM) software
- Inventory and supply chain management software
- Point-of-sale systems (POS) for retail sales
- Productivity software
- Project management software
You also need to consider whether you or your employees will need hardware specifically for your enterprise – such as computers, laptops or mobile devices.
It takes a lot of work to start a business. However, nothing good comes easy. By taking the time to consider the possibilities for your home-based business, you can increase the likelihood of success and long-term sustainability.