Tips and Advice for Starting a Home Business in 2022

By Lesley Hensell, Co-Founder, Riverbend Consulting

We’re in a very unique time where work-from-home has become mainstream, accelerated by the COVID-19 pandemic that began almost two years ago. As we begin the new year, many people are evaluating their lives and their livelihoods, and home businesses are a much more viable option.

If you’re considering this route—or have already begun the process—following are the top 10 tips and advice you need to get started.

#1. Do it right from the start.

No matter what kind of business you plan to launch, get the paperwork done correctly from the beginning. Start by setting up an LLC for your company. Depending upon your jurisdiction, you might also need a business license. If you plan to purchase products for resale, you will need a state business reseller certificate that allows you to purchase products wholesale, without paying state and local sales taxes.

#2. Set a realistic budget.

Every business requires startup funds. It’s easy to spend too much or too aggressively before the prospect of any real revenue arises. Decide up front how much money you can reasonably and comfortably spend to launch your business. Open a bank account specifically for your business account and make a deposit. Then decide where your funds should go. By doing this, you’ll avoid spending on tempting, but unnecessary, expenses that could prevent future success.

#3. Set up your accounting software.

While this may seem premature, it’s important to know how you will book revenue and expenses. Choose an inexpensive accounting package (there are many online options) and load up a mileage and expenses tracking app on your phone. Remember to account for all business-related driving, meals and other costs, so you can take them as expenses and lower your future tax liability.

#4. Track your time.

Later, you’ll want to know if your business is really making money. This means knowing how much time you’ve spent developing your company and performing its money-making operations. Create a timesheet or use an app to record your hours. Also, whenever possible, sign family members up as employees. You can deduct their pay as a business expense. Just be sure to document the time they spend working for you.

#5. Set aside a dedicated workspace.

While a laptop and an internet connection enable you to work anywhere, at any time, being a nomad can reduce your productivity—even in your own home. Creating a special area just for your home-based business accomplishes a few goals. First, it helps create a work-focused mindset. You know that when you sit at your dedicated workstation, it’s time to move the needle in your business. Secondly, it trains the other people who live in your household to respect your work space and time. They understand that this is your work sanctuary, and you should not be disturbed when you’re trying to focus on your business.

#6. Do your research.

No matter what business you have in mind, it will not be operating in a vacuum. Whether you’re offering a local service or selling products online, there will be competition—and a lot of it. Take time to survey other businesses that will compete with you. Understand their features, pricing, delivery options, etc. so you have a better idea of how to compete and differentiate yourself.

#7. Identify your unique selling proposition (USP).

Every business needs a USP—even a small home-based business. What makes your product or service special? What will make you stand out from the crowd? Think about the competitors you’ve already identified and analyzed. How can you present a better value to customers? Your USP will mature and morph over time and should be refined as you learn more about the marketplace.

#8. Get to work.

While this step sounds simple, it is where the rubber truly meets the road. Most entrepreneurs start their home-based business as a side-hustle. They may be tired, pressed for time, or have conflicting responsibilities with their full-time job or family. Consider setting a weekly schedule to work on your business. Decide on your hours ahead of time. Then truly focus during those hours—no interruptions, no electronic devices, no conflicts. Truly focused time will move your business ahead.

#9. Outsource the drudgery.

As you begin to make money and turn a profit, you may see that your business has great potential. But how can you make it grow and prosper when you’re continually pressed for time? Once it financially makes sense, consider outsourcing time-consuming tasks that don’t add value to your business or life. These can be either business or personal. Either way, the goal is to enable you to spend more hours on truly value-add activities.

#10. Always keep planning.

A budget. A marketing plan. An operations plan. No matter where you are in the growth process, you need to keep planning for the future at all times. Set appointments with yourself on a monthly, quarterly and annual basis to plot the future and set priorities.

In the end, don’t forget to celebrate your successes and milestones along the way. Too often, entrepreneurs spend their time and energy to grow, grow and grow some more. They may not even notice reaching important milestones such as a revenue threshold, hiring an employee, creating a certain level of profit, or serving the 100th customer. Each of these is cause for celebration with your team, friends or family.