The concept of home business is as old as the notion of business itself. For a very long time we’ve been using our homes as places other than just somewhere to live, and we’ve been prospering because of it! So maybe it’s your turn right now? A home business could be a great way to ring in the new year, especially if you’ve been thinking about starting one for months now.
But maybe you’re holding back, because you’re worried about your chances of success? Well, we’re still early into 2022 right now, but there’s already been plenty of predictions for how business will fare this year. And as someone who wants to set up their own home business and/or startup, you’ve got a chance to capitalise on these numbers early.
So, whether you’ve already made room in your home for an office or you’re still planning out how you’re going to work, these are the considerations you should keep in mind. A home business is a worthy cause, but make sure you’re setting off on the right foot.
What Will You Sell?
This is the first thing to think about, of course. What kind of business do you want to run, and what are you going to sell? You’ve got an idea in your head already, yes, but you need to spin that into reality, and that takes a lot of foresight. So, maybe you’ve got a passion for knitwear, or you make your own t-shirts and mugs – whatever it is, it’s time to do your market research.
Why? Because first, you need to know there’s an audience who could find you and buy from you. Aside from that, you also need to know the kind of stock load you should work with. How much inventory are you going to need? How much excess stock could you handle? How much material will you need to keep aside for breakages and/or products that have been lost in the post?
There’s also the option of investing in supplier credit here, but be careful. This credit works like any other, and if you can’t make a sale, you’re not going to be able to pay back what you owe. Buy low at first, discover what kind of demand you’re working with, and then go from there.
Talking to an Accountant and Lawyer
How versed are you in dealing with the numbers? What about the law? Do you think you could take either institution on by yourself? Because without the right knowhow for balancing the books and paying your taxes, and without knowing what laws you’re operating under, or if you need insurance, your home business could tank within its first year.
And you definitely don’t want that! So you’re going to need to work with an accountant and a lawyer for at least the first few months of your operations. If you’re planning to start small and very slowly work your way up, there’s a good chance you only need to invest in a consultation or two.
However, if you want to get big and grow big, you’ll need to fork out around £350 at the very least for a lawyer, and at least £50 for an accountant per month. Unless you learn how to manage these sides of the business yourself, you can already count these as necessary, ongoing costs.
Once you know the kind of stock you’re going to need, and you know what it’s going to cost for each ordering cycle, it’s time to think about where you’re going to keep it all. Your home might do fine for the first few months, but if business picks up, you’ll need to move your stockroom elsewhere.
And you have a lot of factors to consider here, aside from just the price. Indeed, for a company that works in a dedicated niche, you’re likely to need specialised storage to keep your products cool and safe. Say if you’re currently working with a Chemical Manufacturer, you’ll also need to look into renting a warehouse or storage unit capable of handling such delicate and/or potentially volatile materials.
All this goes to say that you’ll need to cross examine and do price comparisons on any storage centres you come across. The location, size, and length of your storage stay will be the three main driving factors, but you’ll also have to pay extra for things like temperature controlled units. At a minimum, per the average 50 square feet, you’ll be looking at around £25 a week.
Getting the Word Out
Finally, we come to the marketing side of things. You need to get the word out about what you offer, and that rarely comes for free. Unless you can release a viral social media post from your company’s inception, there’s a good chance you’ll have to invest in quite a bit of outbound marketing for the time being. Any inbound marketing techniques traditionally come later on.
From using Google Adwords to buying Facebook banners and Instagram sponsored posts, you’ll be looking at paying for cost per click, and for all three of the above, that’s around £1 per click on average in the UK. You’ll have your own budget to dictate this, but make sure you do some lengthy research into how this works across the major sites before you invest in anything. After all, that average may look very different to you!
The Takeaway for Your Home Business Idea
All in all, a home business can be quite expensive to start, but if you’re working solely from home, you won’t have to bundle premises payments into the price point. Similarly, if you’re only working online, there’s a good chance you won’t have to pay for any labour costs, as a website usually only needs one person to take charge. Cutting out these two big costs can go a long way to saving your budget and ensuring a good growth rate for next year and beyond!