Are you considering starting a small business from home? Well, you are in the right place! With its flexibility, running a business from the comfort of your own space can be exciting. Firstly, small businesses, as per the U.S. Small Business Association (SBA), tend to be small in size, with around 250 employees. Quite the contrary, these small businesses are the bows that tie the American economy together, contributing 99.9% to the total firms in the United States, standing at 33.2 million.

Starting your own business at home has several benefits. You will have great freedom in pursuing your desires and beliefs in the comfort of your home. For instance, fixed expenses such as rent and utility bills can be relatively lower than in conventional stores. Only with a suitable strategy and strong work ethic can a home-owned business be an amazing journey, both privately and professionally.

In this article, we will examine the bare essentials of how to start a small business at home. We will share some practical advice and insights that will help you stay in control of the process. This guide is for aspiring entrepreneurs and others who might want to take a different path. It is meant to help you start your entrepreneurial journey regardless of location. 

Importance of Small Business in the US

Small businesses keep the American economy going. They provide jobs, spur technological advancement, and enhance the country’s economy. Around 47.1% of private sector workers are employed by small businesses in the US, 99.7% of all businesses in the country.

If you are wondering how to start a small business at home, you must know the importance of it. Here are the major importance of small business in the US market:

1. Small Businesses Create Jobs.

Small businesses create two out of three new US jobs. These industries make up roughly 50% of all private-sector jobs and are a significant workforce segment. Small businesses also reflect a wider diversity, with more veterans, minorities, and women employed than large companies.

2. Small Businesses Provide the Driving Force to an Economy.

Small firms are the backbone of economic development in the US. They create over half of new jobs and contribute more than half of all private sector revenues. Due to the availability of advanced technologies, small businesses are the biggest contributors to innovation and economic growth.

3. Small Businesses have an Important Role in Both Innovation and Diversification.

Small business owners are naturally more innovative than large businesses. They also can respond quickly to emerging technologies and new trends. Small businesses are mostly placed in urban areas, thereby driving economic growth and development.

4. Small Businesses give a Community a Specific Tone and Character.

Small enterprises play a key role in the US economy. These civic spaces allow people to get together, interact, and have each other’s backs. They contribute to the local economy and are also a social and civic identification source. Small enterprises would probably provide more personalized services to customers and listen to customers’ feedback than large enterprises.

How to Start a Small Business at Home?

Here are the steps you need to follow if you are wondering how to start a small business at home:

Step 1: Prepare a Business Plan.

Developing a small business at home begins with crafting a business idea that will be feasible and profitable. After you have identified an idea that excites you most and which you are prepared to pursue, the next stage is writing a business plan. A business plan is a guide that gives you a chance to plan and move forward in your business. A plan becomes more and more valuable if you are planning to raise capital or get a business loan. It describes precisely what you are planning and how you expect to achieve your goals.

Business plans typically fall into two categories, as per Small Business Administration (SBA): traditional and lean startup. 

• Traditional plans are detailed, including summaries, product details, and finances.
• Lean startup plans offer a concise overview, which is suitable if you don't seek external funding.

To start a home-based small business, you should develop a detailed business plan that addresses all your concerns. Here are some important things that a business plan should include: 

1. Executive Summary (describe your business pitch),
2. Overview of the Business (explain in detail about your business),
3. Market Analysis, 
4. Key Services/Product Description, 
5. Operational, Marketing, and Sales Plan,
6. Proposed Budget and Financial Plan.

Step 2: Choose a Business Structure.

The second step of the How to Start a Small Business at Home guide is selecting the most suitable business structure. It is important because this can affect different areas, such as taxation and liability. Here are some important types of business structures:

1. Sole Proprietorship

A sole proprietorship is the simplest form of business enterprise, where an individual runs and owns the business. The business owner is personally liable for all business debts and obligations. 

2. Partnership

A partnership is one in which at least two owners are involved and share the profits and losses of the company. Both partners are liable for business debts and tax filing.

3. Corporation

A corporation is a legal entity with separate ownership and belongs to shareholders. Corporations allow the shareholder to enjoy a limited liability status.

4. Limited Liability Company (LLC)

LLC offers similar limited liability protection as corporations but with more control over the organizational and tax structures.

To start a home business, you can start with a sole proprietorship or partnership structure. Let’s look at the tax implications and liability associated with different types of business ownership:

Step 3: Generate Your Business Name and Complete the Essential Registration Requirements.

After deciding on the business structure, it is time to develop a suitable name for your business. It might be the fun part of starting a small business at home, but it can also be overwhelming. It is because your business name will represent your entire business and the idea behind it. So, it is essential to come up with a creative name to stand out from the competitors and simply enough to be remembered by your customers. 

You can utilize business name generators to get inspiration, and once you find a name for your business, register it and trademark it. The procedure may vary depending upon the business structure, but small businesses can register it by submitting a form to your state or local government. 

You will be required to get business licenses as well. The type of business licenses may vary per the industry norms, business type, and state, county, and municipality requirements. It is best to talk to a business lawyer to learn the relevant codes and regulations and get a business license accordingly. You might need the following types of licenses: 

1. Industry License 
2. Zoning Permit 
3. Seller’s Permit 
4. Federal License 
5. General Business Operating License 

Step 4: Open a Bank Account.

After determining the best business structure, the most important action is setting up a separate bank account for your home-based business. This process isolates personal expenses from business finances, which helps with filing taxes and managing finances. First of all, the EIN (Employer Identification Number) is necessary, so you must obtain one before proceeding. 

An EIN or Employer Identification Number is a federal tax ID that must be obtained to open a business bank account. On the other hand, getting your EIN is not a difficult process; you can do it for free on the IRS website. Your EIN will mostly be issued within minutes. By establishing a business bank account and an EIN, you build a secure financial ground and abide by financial compliances. Thus, your home-based business will be running smoothly.

Step 5: Work With an Accountant.

The fourth step in registering a small business at home is consulting an accountant. Getting an accountant’s expertise is imperative for entrepreneurs, as taxation can become challenging and overwhelming for numerous small business owners. They simplify the complexities of taxation and guide you in the right direction that will ultimately yield the most benefits. 

If your expected liability exceeds $1,000, following IRS regulation rules means you should pay estimated quarterly taxes. Quarterly taxes are a complicated process. Your accountant will take care of that. All he needs to do is calculate your obligations and then send you an invoice.

Also, an accountant is the key figure in managing the expenses; they maintain the records and provide for deductible expenses. Whether it is office supplies or home office deductions, their professionalism guarantees your tax returns are optimized and maximized by having you get rid of every possible deduction. Working together with a certified accountant is not only relieving, as managing tax affairs will become easier, but also encourages you to become more financially wise. All these things are essential for developing a successful small business enterprise.

Step 6: Start Selling your Products or Services.

After you have prepared a business plan and a set of legal documents, the last step, which is essential for your business success, is launching your product or service. Fundamental to business success is profitability; therefore, you need to be very sure that there is a demand for what we offer.

Now, the question that arises after starting a small business at home is how to make your small business successful. What tools and resources can you use to make your small business a hit? Let’s discuss it!

Resources to Start a Small Business at Home

The right resources, such as email marketing, website creation, and newsletters, can be important to any home-based small business. Email marketing platforms become a channel of direct communication between a company and customers, while user-friendly website creation allows any company to own a professional online presence. Let's discuss all the essential tools that will help to boost your small business: 

1. Social Media Management Platform

An all-inclusive social media management platform, a social branding tool, can considerably help people develop their online presence. These tools feature functions like scheduling posts, tracking engagement, and analyzing audience demographics. One could take a calculated approach in choosing the content and maintaining a consistent tone of voice when communicating across multiple social media platforms.

Moreover, these tools give the ability to gather and analyze the audience’s preferences and tendencies and accordingly make rational decisions for a successful online persona and good reputation. Therefore, the social media management tool will undoubtedly be a must-have for those who want to build a powerful and relevant personal brand in the digital age.

2. Email Marketing Platforms

An email marketing platform is an essential tool for business owners aimed at making interaction with an audience easy and good. It provides capabilities that cover email campaign building, subscriber list management, and performance monitoring. Through user-friendly interfaces, the users will willingly create emails with attractive outlooks and customize the message depending on the target demographic. Automation features simplify workflows with the capability to send emails at scheduled intervals and to send responses once subscribers take action.

Better analysis uses detailed analytics that provide valuable campaign performance information. Hence, businesses can make decisions to improve their strategies, leading to better results. Generally, an email marketing platform controls the entire process of developing and maintaining relationships with the audience, resulting in a high engagement and conversion rate.

3. Website Creation

Website creation is necessary for businesses and individuals aiming to succeed and reach a wider audience. The platforms provide user-friendly interfaces and even customizable templates so that one can create websites with great appeal without knowing how to code. 

With a no-code website development platform, users can easily add text, images, and videos to web pages and create highly engaging content due to the drag-and-drop functionality. The website creation tools include features for mobile site optimization and search engine optimization to ensure that the site is most visible and accessible to potential visitors.

4. Newsletter

Newsletters are one of the strongest tools for small businesses to stay in tune with and involve their audience. These timely messages keep customers informed about the company's latest products, services, updates, and promotions. This can help retain customers and promote the brand. 

Newsletters can be very effective in promoting credible content and eye-catching design. They can also show the benefits of the business and announce upcoming events or promotions. Unlike many other communication platforms, newsletters offer a unique opportunity to gain valuable audience engagement metrics, thus enabling businesses to refine their marketing strategies and optimize future communications.

Conclusion

Small businesses are a new and exciting possibility for upcoming entrepreneurs. By seizing the opportunity and being dedicated and determined, anyone can develop their passion into a profitable and successful home-based business that will offer infinite opportunities for growth and development in the ever-changing world of entrepreneurship.

Frequently Asked Questions

1. What resources do you need to start a small business in the US?

Starting a small company in the US requires a good business plan, operational funding or finance, legal state, necessary permits and licenses, and fundamental things like a website, email marketing platform, and maybe physical space or equipment, which depend on your type of business.

2. What are other low-cost home business ideas?

You can try to become a freelance writer, work remotely, or start a small business selling handcrafted items. Such startups usually represent opportunities with low startup capital, allowing for flexibility and, eventually, revenue growth.

3. Can I obtain a visa if I start a small business in the USA?

Yes, the E2 visa is an excellent option for entrepreneurs. This visa allows you to invest your money in a US-based company and be in charge of the operations, enabling you to set up and run a business in the United States.