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How to Start a Small Business at Home?

Updated on :  

08 min read.

Home-based businesses or starting a business from home has gained popularity in recent years as they provide flexibility with less cost. A home-based business is a business managed and controlled by the business owner’s residence. The business office address of such a business is the same as the owner’s home address. The home or place of the owner acts as the business headquarters rather than an external headquarters.

Who Can Start a Business at Home?

Anyone can become an entrepreneur by launching a business at home. Due to the advent of the internet, anyone can start a home business and sell products or provide services through e-commerce platforms or start their own business website.

Moreover, individuals can benefit from their skills, such as photography, painting, or dancing, by starting a home-based business. Thus, individuals who wish to start a business can do so from their homes and supplement their income through such endeavours.

Advantages of Starting a Business From Home

  • Home-based businesses provide flexible work and life balance, especially for stay-at-home parents or retirees.
  • Home-based business owners can sell products or provide services locally and internationally through e-commerce platforms.
  • Working from home requires less investment than carrying out the business from a separate office location.
  • Home-based businesses get several tax benefits and deductions.
  • There is more time to concentrate on the business and revenue-generating activities since a home-based business saves commuting time to the office and provides flexibility.
  • Entrepreneurs can venture into a new business without investing a lot of money. 
  • Entrepreneurs can assess the feasibility of the business before spending a significant sum of money.
  • Working from home reduces overhead costs. Thus, entrepreneurs can be more flexible in their pricing choices than competitors with overhead costs.

Profitable Small Business Ideas to Start From Home

  • Catering

Any individual can start a small catering business from home. They can cater food to parties for 25-50 persons. All events such as birthdays, celebrations, charity events, family get-togethers, etc., require a caterer, be it small-sized or large. Thus, home catering services have significant demand in the market. Initially, the business can be started to cater to a small audience and then expand to cater for a large audience.

  • Content writing

Content writing is a good business idea among college students. Freelance writing allows any individual with a flair for language to make money. This business requires low capital investment since it requires only a stable internet and a laptop. Individuals can slowly grow this business by offering vlogging, blogging, content creation for social media channels and other development services.

  • Photography

An individual passionate about photography or videography can start this business from home. An excellent visual presence on social media platforms helps to grow this business. Every event, such as birthdays, functions, celebrations, parties, etc., needs a photographer. If an individual does not wish to travel to capture photographs of events, they can even work as a freelance video or photo editor online.

  • Tiffin services

Many people live away from home for education or work. Many working people also do not find time to cook at home. Such people prefer tiffin services where they prefer home-cooked lunch or dinner. An entrepreneur who can cook can start tiffin services and deliver fresh, homemade food daily to people in their area. The model of a tiffin service business is highly lucrative. Business owners send fresh home-cooked food to their customers on the selected days based on their preferences.

  • Computer repairs

An individual having knowledge and experience of computer hardware or software can start a computer repair business. Home-based computer repair services have a demand since they visit their customers’ places, maintain computer equipment through their expert knowledge, and give personal attention to them.

  • Yoga classes

An individual having yoga knowledge can start yoga classes at home. It is one of the best businesses to start since people are becoming health-conscious and prefer doing yoga to maintain their health. It is a high profit and low investment home-based business. An individual can be a yoga teacher or instructor and even offer online or offline yoga courses as it is presently in demand.

  • Boutique

A clothing boutique is usually smaller than a regular clothing retailer. An individual can start a boutique from home and attract customers looking for specific kinds and styles of clothing. Since many customers have their own styles, customers are bound to return when the boutique offers clothes that fit their style and are given personal attention.

  • Event management

An individual having a disciplined approach and an innate skill in managing people can start an event management business at home. Many people require the help of an event manager to organise an event such as a birthday party, corporate event, farewell, or weddings. It requires low capital investment, as it requires only the right contacts and resourcefulness to organise things within a budget.

Process Involved in Starting a Small Business at Home

  • Make a business plan

Entrepreneurs must first decide on the business they want to venture into before starting a home-based business. After deciding on the business, they need to develop a budget for the overall business strategy. The business plan must contain the business strategy, start-up costs, taxes and daily expenditures. It is a blueprint of every business.

  • Finalise funding options

Entrepreneurs will require investments to start the business. Some can start the business through their savings, while some need funds. The funding necessary for a business will depend on the type of business. An entrepreneur can take a small business loan from banks to start the business. They may even take loans from cooperative societies or government schemes for Micro, Small and Medium Enterprises (MSMEs). They can even raise capital from crowdfunding and venture capitalists.

  • Create a working environment

Home-based business owners need to set aside a specific area in their homes for business purposes. They need to set working hours and dedicate that time to the business. It is essential to write down strict rules to prevent personal activities from interfering with business operations. Many people fail to have an effective home-based business as they allow their personal lives to interfere with the business activities or operations.

  • Obtain required registrations

Various licences and registrations are required to start a business from home in India. Even though the business is being operated from home, there are many mandatory licences that the business owner must obtain to run the business from home. Additionally, a business owner must have a Permanent Account Number (PAN) and Taxpayers Identification Number (TIN) as it helps when paying taxes to the government. The various licences required for a home-based business are discussed in detail below.

  • Open bank account

After obtaining the required licences and registrations, a business owner must open a current bank account in the business name. All the business transactions must be done through the business account and not the personal account of the business owner. The business account helps to keep the business and personal transactions separate.

  • Develop website

It is better to have a website for the business even when it is carried out physically from home. A website helps to reach a larger audience and gain more customers. The goods sold or services provided by the business can be showcased on the business website along with the contact details. Business owners can also promote their business by creating their business page on social media platforms like Facebook, Instagram or Youtube. They can also open an online store or sell products through an e-commerce platform like Amazon, Flipkart, etc., and reach a broader customer base.

  • Create a trademark

Branding is critical for a business. An easy to remember brand name and logo are the brand ambassadors for a business. All successful businesses have a logo with vibrant graphics or a memorable name. Printing the logo or brand on the official stationery, including payment vouchers, envelopes, letterheads and other documents, helps the customers remember the brand and grow the business.

  • Market the business

A business owner must market the business due to intense competition. They can market the business without spending much by posting videos and pictures of the products and services on Youtube channels, websites and Instagram. They can also use traditional ways to promote the business, like advertising on local radio and newspapers, distributing pamphlets, etc.

Registrations Required to Start Business at Home

  • Business registration 

The first step to establishing a home business is to obtain registration for that business. A home-based business should be set up as a recognised legal entity such as a sole proprietorship, partnership firm, Limited Liability Partnership (LLP), One Person Company (OPC) or a limited liability company. The business owners can register the business as an LLP, OPC or a private limited company by applying to the Registrar of Companies. They can register as a partnership firm by applying with the Registrar of Firms. They can also establish a sole proprietorship firm.

  • Business license 

The home-based business must mandatorily obtain a Non-Objection Certificate (NOC) from the local authority of the area where the business owner’s home is situated since it is the official business address. The local authority may be the municipal council or municipal corporation.

  • Shop and establishment registration

A home-based business must obtain registration under the Shops and Establishment Act. The shops and establishment act regulates shops and commercial businesses, even when they are carried out from homes. Business owners can get this registration by applying to the respective state authority.

  • MSME registration

MSME registration is not compulsory, but it is recommended for small businesses carried out from homes. The government provides several benefits to small businesses having an MSME registration, such as tax benefits, easy access to capital, low-interest rates on loans, schemes for technology upgradation, etc.

  • Trademark registration

The trademark registration is not mandatory, but it is recommended to protect the business trademark. The unique name or logo is the business trademark through which the customers identify and remember the business. It helps to gain loyal customers and acquire goodwill for the business. It also ensures that any other person does not use the business logo and grants protection in such cases.

  • Other registrations

The business owners are required to obtain certain other specific registrations, depending on the nature of the business. A manufacturing business requires a trade licence, a business involved in food requires an FSSAI licence, etc. Businesses carried out through e-commerce platforms require GST registration.

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.

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