Starting a home-based business can be a profitable, but formidable, undertaking. To be successful, you need a solid plan, the right space, and a team of people who can partner with you along the way. Ready to learn more? Here are some tips.
Get Your Business Started
There are a lot of decisions to make when starting a home-based business. To make the process more manageable, break it down into a series of steps:
- Choose your idea.
- Write a business plan.
- Pick your name and business entity.
- You may want to register as a DBA.
- Obtain a business license.
- Get funding.
- Set up your office.
- Take care of your taxes.
It is important to keep your business and personal finances separate. When choosing your business entity, you may want to consider forming an LLC. Registering as an LLC provides you with tax flexibility, protection for your personal assets, and other benefits.
It’s also best to set up a business bank account and create invoices that you know will directly correlate with that account. It’s easy to create a customized invoice using an online invoice generator. Many provide free templates that you can download and edit. Keep things professional, but make the invoice align with your business type and marketing products to create consistency.
Prepare Your Space
Not every home is an ideal environment for a home-based business. The Zebra notes you need to have enough space to set up your office, storage, and work areas, and if customers will visit your business, you also should have an area to greet them. You’ll also need fast and reliable internet and top-quality equipment like an ergonomic chair, a dependable laptop, and a comfortable desk, preferably one that is adjustable.
If your current home doesn’t meet your needs, consider purchasing one that better suits your aspirations. But before you put your home on the market, you’ll probably need to make some upgrades and repairs. Buyers expect functional appliances in their new home. So, if you have been putting up with a finicky dishwasher or a stove with only two working burners, now will be the time to get them fixed. Look online for appliance repair shops near you and search for one that handles the types of appliances you need fixing. It’s important to read enough reviews to ensure they are a legitimate and trustworthy company. Remember, sometimes businesses hire people to write positive reviews, so read several before calling to arrange an appraisal.
Determine How Much Home You Can Afford
Before you start the hunting process and applying for mortgages, determine how much you can afford to spend on a new home. According to financial experts, there are three rules to keep in mind when determining your budget:
- Monthly mortgage payment should be no more than 28% of your gross monthly income.
- Your total debt payments should not be greater than 36% of your gross monthly income.
With these rules in mind, you can estimate your budget. An easy way to do this is to use a mortgage calculator to determine your estimated monthly payment at different purchase prices and interest rates.
Get Pre-Approved for a Mortgage
Once you have determined your budget, it is time to get pre-approved for financing. With a pre-approval in hand, it assures sellers you are serious and ready to buy. This gives you an advantage if a lot of competition exists for the property you want. It can also make the purchase process faster and easier because you do not have to worry about making an offer only to get turned down for a loan and having to start all over.
Find a Real Estate Agent
While it may be possible to find and purchase a home on your own, working with trustworthy real estate experts will make the process much easier. A good place to start your search is by asking friends and family if they have any recommendations. Other resources to consider include local real estate associations, for-sale signs in the area you are looking to buy in, and local publications. When selecting a real estate agent, consider experience, customer satisfaction, and availability. Your real estate agent can do a lot of the legwork for you when it comes to searching for a home.
Starting with the right space can help get your home-based business off to a good start. Partnering with the right professionals can help demystify the process. Plus it takes the stress out of finding the right home for your family and your business.