How To Start a Business at Home
June 22, 2021
Starting a Business at Home
In this guide, we break down the 12 main components of setting up your home business; with helpful blogs, software suggestions at a low cost, and a free business plan template from Sage.
A guide to starting a small business at home:
5. Vision and mission
7. Business plan
12. Mental health and boundaries
First things first, you will need to register as a home business, either with Companies House or as a Sole Trader, depending on your business model. Check out the chapter below about outsourcing help, as many Accountants will provide help and guidance on this, and will even manage all communications for you – that’s one less thing to worry about!
If you want to go ahead with this process yourself, check out Simply Business’s guide between a sole trader and a limited company with its advantages and disadvantages to get the ball rolling, and then visit the gov.uk website to get registered!
Whether you tweak your standard home insurance or obtain a brand new policy, home business insurance is a must for the protection and safety of your company.
- Public Liability – if you are customer facing or risk damage to your property
- Product Liability – if you are manufacturing goods
- Professional Indemnity – if you make a mistake that could cost a client money
- Employer’s Liability – if you are hiring
- Contents Insurance – if you’re using equipment (computers, laptops, mobile phones etc.)
Simply Business also has a business insurance comparison platform where you can input all of your company details and they will pull the best possible policies and offers for you to get insured in minutes.
3. Utilise freebies.
Most software subscriptions will offer free trials, monthly payments instead of an annual lump sum and lower fees for smaller businesses. To make the most of free trials, remember to set a reminder in your calendar in time to cancel! There are also a number of tools that are completely free and remain so, here’s a few of our favourites to get you started:
- Canva: create your marketing materials and imagery
- Zoom: host video calls and meetings
- Trello: project management and organisation
- Calendly: book out time in your diary with customers
- Surveymonkey: get feedback from your new customers
4. Entrepreneurial mindset.
During the creation of your business plan, take some time to really assess which aspects of the business you’re most passionate about. Do you get your kicks from analysing facts and figures? Or would you rather be picking up the phone talking to customers? How about creating beautiful imagery for advertisements? You’re becoming an entrepreneur because you’re motivated, ambitious and passionate, and it’s so easy to become all-consumed with the aspects of the business that pique your interest.
However, you are no longer an employee working in a team and you need to be knowledgeable across all components of your business. Put your time and energy into acknowledging and working on your weaknesses so that when your business is up and running, you’re not dreading your annual tax return or ignoring the pile of admin that is creeping across your desk.
“Stop thinking like an employee”
It’s likely that you’ll be working long past the standard 9 – 5 as you’re nurturing and growing your business; but as your own boss, you also have free reign over your time. We all have 24 hours in a day, but assess which of those hours you’re most productive and adapt your time and tasks accordingly. Are you an early bird? Get the meaty reports that require a lot of brain power out of the way by 10am, and save the social media management until the afternoon.
We’d recommend following StartUp Mindset on Twitter for regular blogs and informative tips to reach your full potential as an entrepreneur.
5. Vision and Mission.
What inspired you to start your business? What values are most important to you? Think long and hard about your Mission Statement, it explains why your company exists and what value it will bring to the world. In layman’s terms, it’s your company “bio” and sets the tone for your goals, values and brand image.
Although it seems so simple, they can be quite tricky to put together; so here’s some great examples of inspiring mission statements.
As above, we’re not just talking about your shiny new logo here (although a free tool like Canva can help you with that!) but the brand image you want to put across to your potential new customers. With a new business, first impressions are vital as there’s no point of reference for your customers, you will have little to no reviews online and as word of mouth is the most effective form of marketing and advertising, it’s essential you take your brand image very seriously from day dot. Keep a clear picture at the forefront of your mind of how you want to be received, and what your future customers will associate with your brand when they think of you.
Tone of voice, platforms of communication and your target audience will come into play here, too. Check out more in the marketing plan chapter below.
7. Business plan.
Starting a venture without a business plan is the equivalent of going out in a thunderstorm with wellington boots but no umbrella – ultimately destined to fail.
Luckily, there are plenty of resources online to make this daunting task more manageable.
Sage’s downloadable business plan and template covers the following and includes informative overviews and hints to help you along the way:
- Executive Summary: Description of your business and objectives, your products or services and their pricing, customers and competitors, key financial figures
- The Business: How your customers will benefit from your products and/or services, what makes you different or stand out.
- Goals: Covering the short (current year), medium (following 1-2 years) and long term (3+ years) of your business. Some must be financial, but not all.
- Audience and Market: As much relevant, quantified information as possible – especially relating to the size of the target audience and their potential to spend money with your business.
- The Market: The size of the existing market – this might tie in closely with details of the audience in the above section. Any gaps in the market that you plan to take advantage of. Is the market growing, stable or shrinking?
- Competitors: Detail both the strengths of your competition and their weaknesses. Be explicit about your opportunities to beat your competitors.
- Products / Services: Highlight the product and/or service’s most compelling characteristics. Detail pricing and a comparison with your competitors.
- Marketing: Outline our USP (Unique Selling Point). Create a separate marketing plan and link to this section of your business plan.
- People: This may not be necessary just yet, but be sure to include this as your business grows and you hire employees.
- Financials: Sales figures, projections and revenue. If you hire an Accountant, they will help you with this report and the remaining items below.
- Sales Forecast: How much you plan to sell over the next 2 years. Include the cost of sales and margins, especially if you are looking for investment.
- Costs: Outline all business outgoings and expenses.
- Cash Flow: Outline when money will be coming into your business and when it will be leaving it.
- Profit and Loss: Income – Costs = Profit. Make sure that everything matches with the data you are providing in other areas of the finance section.
- Source of Funds: Where any existing funds have come from, how they will be used, how long you expect them to last, plus how and when they will be repaid.
If you’re selling a product or service but it’s not advertised or marketed correctly, how will anyone know to buy?
“If a tree falls in a forest and no one is around to hear it, does it make a sound?”
Marketing strategy & plan
As mentioned above, we’d highly recommend creating a separate marketing plan.
Take the time to understand your target audience and create your marketing strategy with them in mind. Pew Research Center has reported that more than nine-in-ten Millennials (93% of those who turn ages 23 to 38 this year) own smartphones, compared to 68% of Baby Boomers (ages 55 to 73). Ofcom also reported that Gen Z spend 1 hour 20 minutes each day on social media, while The Baby Boomers registered 29 minutes on average. Would the majority of your customers be Millennials? Focus solely on social media advertising. Whereas if your target audience is the older generation, try mixing it up a little bit with alternative forms of advertising. But remember – the most effective form of marketing is always word of mouth.
Check out our blog on How to Attract Millennials HERE.
Evaluating and understanding your competition is key. Within your sales and marketing plan you must collate your unique selling points and why customers should spend their money on you over a competitor. Getting to know your competitors can be done in many ways; start by gathering information about their products, service, quality, pricing, and advertising campaigns.
Once you have the information on your competitors, gaining tangible and usable information like; what does your competition do that works well? What are their weaknesses? How can I create a marketing plan that highlights the advantages we offer?
Building a brand
Now, start sculpting and building your brand. Your brand is what people say about your business when you’re not there. How customers perceive your brand and business can make a significant impact on sales. Repeat after me, the most effective form of marketing is always word of mouth. Your marketing plan and strategy should consistently reinforce, maintain and build on your brand. Even before you start marketing your business, think about how you want your marketing to reflect on you, your business and your products and services.
Marketing is the first interaction with you and your products that customers will experience, it is worth spending time to make sure it reflects your vision, mission and brand. First impressions are invaluable.
Don’t market features, market solutions. What specific pains and problems do you solve? What benefits do your products and services deliver? Your sales and marketing plan should clearly identify customer pains and the solutions customers will receive. Don’t focus on what you provide, focus on what your customer will be getting. Be it peace of mind, more time with their family, getting healthier or making memories.
“Ensure you understand and market your differentiation. Your brand, services and products have to stand out in the marketplace. If you don’t know why you beat the competition, you can’t expect your customers to.” Sam Johnston, CMO at BookingLive
9. Getting online.
As a crucial part of your brand image, website creation may be something you’d like to invest in and outsource. However, there are certain website creators like GoDaddy, Wix and Boxmode that cost very little or can even be free. It is almost certain that potential customers will search through your website before picking up the phone, so your online presence is a huge part of your brand image and first impression.
Social media marketing is absolutely free and platforms such as Instagram and Facebook have dedicated business pages that also provide invaluable information and insights on what’s trending, how to be more engaging, inspiring imagery and how using these platforms will really elevate your business.
If you’re selling products, consider joining an online marketplace such as Etsy, which will enable potential buyers to discover your brand just from typing in a few generic keywords.
There are lots of different grants and business loans available online, and although the idea may seem intimidating, a lot of the time they are much more affordable than a business overdraft or credit card. Funding will enable you to own 100% of the business you’re working so hard for.
Take your time with this process, shop around and utilise the helplines and speak with the experts to understand the different types of loans, the repayments rates and which setup is right for you. A lot of the time there will be different perks such as fixed repayments rates, flat fees and flexible repayment dates. Check out Funding Circle and Clear Co to get started with your comparison.
11. Knowing when to outsource help.
For some business components such as your website, legalities or accounting, you may want to consider outsourcing – especially if managing a business is completely new to you. Some things can be extremely laborious and tricky to correct so having experts take care of you right from the start will enable business growth that is smooth, stable and successful.
UK based firm LYA (South West) Ltd offers a package specifically built for start ups, with a monthly cost that will not only cover VAT returns and payroll but they’ll also take care of all correspondence with HMRC and Companies House. Check them out HERE.
“How we work is determined by our proactive approach, allowing us a more strategic view providing higher value to our clients. We are passionate about building strong relationships with our clients, creating an Azure family ecosystem.” John Barrow, Managing Director at LYA (South West) Ltd.
12. Mental health and boundaries.
Enlisting the help of a company like AllDayPA will help you set boundaries and introduce a little work-life balance, and you can rest assured that your customers are always being greeted when they pick up the phone.
If you don’t have the space at home for a dedicated office space and you’re working from your kitchen table, try to physically tidy your equipment away at the end of each day if possible. One of the main pitfalls of a home business, is it’s so much harder to switch off. On this note, if you are working from your kitchen table or a makeshift desk, remember to keep your physical health a priority, too. A simple laptop stand that raises the top of your laptop screen to eye level, and raises the keyboard so slightly, you can get them for as little as £15 and they will help prevent slouching and repetitive strain injury in your wrists.
Check out 16 Essential Items for your Home Office HERE.
Embarking on a new venture as a solo entrepreneur is time consuming, exhausting, but a home business can be especially isolating. We’d highly recommend joining an online community of business owners to share insight, attend local events and also to vent about the trials and tribulations of entrepreneurship, socialise and make connections with like-minded people.
As an aspiring entrepreneur, you know what gets you out of bed in the morning, you don’t need our input there. But, with these tools and tips, hopefully we can help to make the first few steps of your start up as straightforward as possible, reduce unnecessary spends and maintain your mental health so you can create something that lasts, something you’re truly proud of.
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