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Avoiding the Pitfalls of Home-Based Businesses
Remote work is here to stay. But it’s not just big business that’s going all-in on telecommuting — Americans are also increasingly interested in starting businesses from home.
Home-based businesses are inexpensive to start, making them an attractive option for entrepreneurs who face difficulty accessing startup capital. Home-based ventures also offer greater freedom and flexibility than brick-and-mortar businesses. However, home businesses aren’t without pitfalls. Use these resources to avoid the most common mistakes of home business ownership, presented by Just Ask Talk Show.
The Basics of Starting a Home Business
The biggest mistake of home-based entrepreneurs is failing to treat their business like a business. A professional approach is a must, regardless of a business’s headquarters.
- First, be sure that your business is really a business and not a hobby. The IRS uses nine factors to determine whether a venture is a business or a hobby.
- To limit personal risk, entrepreneurs need to structure a business as a separate legal entity. While businesses default to either a sole proprietorship or partnership, these entities offer few protections to business owners.
- Speaking of risk: Insurance is a must for any business. Homeowners insurance isn’t designed to cover business activities or assets like business equipment, inventory, or data. At a minimum, home business owners need professional liability coverage but consider a more robust policy that protects against a variety of business risks.
- Funding their business idea is where many entrepreneurs hit a barrier. Know your funding options, including what it really takes to get a small business loan, before building out a business plan.
Essential Infrastructure for Home Businesses
Among the most appealing aspects of home businesses are the ability to get started with minimal infrastructure. But while it’s possible to start a business with as little as a laptop and a home internet connection, is it wise?
- Makeshift workspaces are fine for short-term telecommuting but hamper professionalism and productivity in the long run. A dedicated, ergonomic home office preserves both professionalism and well-being.
- Infrastructure goes beyond the physical. In order for home-based businesses to reach customers, they need to invest heavily in digital marketing, starting with a small business website. WordPress development experts can get a business website online quickly using the widely popular content management system.
- With a digital presence comes digital risks. Cybersecurity is a critical part of any modern business’s infrastructure, yet many small businesses overlook it, buying consumer-grade hardware and using the same devices for personal and business activities. However, practicing good data security is just as important for a small home business as a multinational corporation. If this is something you’d rather learn more about than outsource to someone else, you could always take courses to strengthen your skillset.
Helpful Resources for Small Business Owners
Do you need to go back to the drawing board with your small business idea? There’s no need to trudge through business planning alone. These are the best resources to support new business owners, including resources for military veterans, women, and minority business owners.
- A variety of free resources exist to support small business owners, including small business development centers, SCORE, and local chambers of commerce. You can even find tools like logo creator online apps that allow you to create eye-catching branding for your business..
- Looking for a new career after military service? Locate business assistance for veterans through the Small Business Administration’s Veteran-Owned Businesses guide. Here you’ll find information on training programs, funding for veteran-owned businesses, and veteran contracting.
- Women business owners benefit from connecting with training and networking organizations for women, such as the Women’s Business Development Center and the National Association of Women Business Owners.
- Similarly, the Minority Business Development Agency, along with a variety of private organizations and agencies, exists to serve the interests of black and minority-owned businesses.
While there’s much to praise about home business ownership, its low barrier to entry becomes problematic when home business owners don’t take the necessary steps to protect their interests. From failing to project a professional image to failing to protect your data, there’s a lot that can go wrong when running a business. Let Jobecca take one thing off your plate with managed IT services that let you focus on building your business, not troubleshooting technology.