Start Your Home Business in a Month: Week Two
Putting In the Foundation of Your Home Business
This is the second part of a four-part series on starting a home business in a month. If you missed the first week, which is all about planning, you can review it here:
Once you’ve done your research, chosen a business to start, and made your plans, it’s time to put the foundation in place. During this second week, you’ll take care of all the legal and set-up tasks to get your business up and running.
Day 8: Set Up Your Business Structure
Don’t let this step scare you. Establishing a business structure doesn’t have to be hard. There are several structures you can consider.
- Sole Proprietorship: A sole proprietorship is the fastest, easiest, and cheapest way to start your business. It doesn’t require any paperwork or cost. However, in a sole proprietorship, you and your business are viewed as a single entity, which can put your personal assets (i.e. home) at risk if you’re sued. Starting out, many home business owners use this structure, but eventually move on to form an LLC or other business structure.
- Limited Liability Company (LLC): A safer business form than the sole proprietorship is a limited liability company (LLC), which sets up your business separate from you. This is an advantage because it separates your business assets from your personal ones (i.e. your house). If someone sues your business, they can't come after your house for money. If you hire a lawyer or use a legal resource, it can cost several hundred dollars, plus the fee your state charges. Or, you can do it yourself. Nolo offers several books on what’s required. It's not hard nor that expensive when you consider the advantages. But it is a legal entity so you want to make sure you do it right. Your state agency that regulates corporations will have information and you can probably apply online.
- Partnership: If there’s more than one of you involved in the business, you’ll want to set up a partnership, which is more expensive and involved, but crucial to protecting all partners. Starting out, make sure you have defined rolls and percentage ownership and work determined. Partnerships can get messy, which is best thwarted by establishing all elements upfront.
Day 9: Obtain Needed Permits and Licenses
This is another area where many would-be home business owners feel overwhelmed, but it’s not hard or complicated. In fact, most, if not all, of these issues can be taken care of online.
There are several types of permits or licenses you may need, including:
Business License: Most cities or counties require a business license. Odds are your city or county’s official website has information for businesses including permits and licenses. If not, you can call or visit your local city or county’s government office for information and details.
Sales Tax Permit: If you sell tangible goods (stuff you can hold in your hand), and your state charges sale tax, you’ll need to collect and pay sales tax on your items. Check your state’s tax or comptroller’s office online for information. You’ll probably be able to sign up for the permit online.
Occupational Permit or License: Depending on the business you run, you may need an occupational permit. These are supplied by states that regulate certain businesses. For example, you may need a license to run a day care out of your home. Typical regulated businesses include day and elder care, financial businesses, grooming (i.e. hair stylists or pet grooming), and food and beverage creation and sales. Check your state’s website for information on occupational licenses.
Fictitious Name Statement (Doing Business As or Assumed Name): If your business name is something other than your given name, your city or county may ask you to file a fictitious name statement, sometimes called doing business as or assumed name statement to let residents of your area know about your business. This is often done through your local city or county clerk’s office.
Employer Identification Number: This isn’t required in all business types, but it’s free and can help keep your business separate from your personal life. If you have employees, you’ll definitely need one. Visit the IRS online for details on whether or not you need Employer Identification Number (EIN) and how to get one. One advantage to getting one, is the ability to use your businesses number, instead of your social security number, in your business-related activities (i.e. filling out a W-9 for freelance or affiliate businesses) that require a federal ID number.
Business Bank Account: Once all this is set up, it’s time to open a business bank account. Even if you run your business as a sole proprietor, you’ll want a separate account for business. The IRS is a stickler for not comingling personal and business funds.
Day 10: Set Up Your Home Office Including Billing, Invoice, Money Management etc
Setting up your work space can be fun. Just make sure you have adequate lighting, comfortable furniture, and the tools and equipment needed to do the job.
Along with establishing a place to work, you need to set up your work systems. One of the most important systems is billing and accounts receivable. There are many computer-based and online accounting/bookkeeping tools you can use. Don’t forget to consider your payment policies, such as when payment is due and any penalties for late payment.
Depending on the type of business you start, you'll need to develop workflows. If you're a blogger, you'll want a checklist or workflow on how you get from idea to published and marketed post. If you sell items from an ecommerce site, you'll want a workflow on adding your items, as well as one on shipping them.
Day 11: Create Logos, Fliers, Biz Cards, etc
Once your structure and licenses are in place, you’re officially in business. The next step is to create your business image and put together marketing tools to promote your business. Like your business name, your logo should represent the theme, tone and nature of your business. There are several free and low cost logo tools to help you. Once created, it should appear on all your marketing materials including business cards, websites, social media etc.
The types of printed marketing materials you create will depend much on the business you run. At the very least, you should have a business card. They’re cheap and easy to hand out. Other printed marketing materials you may want to consider are fliers and brochures.
Day 12: Build Your Website
Even if your business is local, you absolutely need a website. Think of the last time you used your phonebook to find business information. Odds are you used the Internet instead. So will your potential clients and customers. Not only is a website a way for them to find you, but most people now research businesses before contacting them, which means if you don’t have an online presence, people can’t learn about you.
You’re actually getting two days to build your website. It sounds daunting, but today, it’s easier than ever to do. If you can create word processing documents, you can build a website.
There are many options for building a website. My recommendation is to buy a domain (which you should have done day six during the first week), web hosting services and use WordPress to build your site. You can have the framework of a website set up within an hour. After that, it’s all about customizing the look with themes, and adding your business information. At the very least you want information about what you do and offer, and how to contact you.
WordPress, of course, isn't your only option, and it may not be your best option. For example, if you're doing ecommerce, you might want to use one of the ecommerce resources to build your store. If you're using a funnel system, you might only need a resource like ClickFunnels, BuilderAll or Kartra.
Day 13: Finish Your Website
On day 12, you put in the foundation, a first-draft, of your website. Day two is about improving the website, fleshing it out, and making sure all the needed content is there and it’s easy to navigate. Include meta tags so that search engines can find it. Because the Internet is more visual than ever, include pictures and video.
Day 14: Create an Email List including Freebie
Too many newbie home business owners put off starting an email list until later. That’s a big mistake. Of all the marketing tasks that can boost sales, the email list is the most important. So set it up from the start.
The first step in setting up an email list is deciding your free offer; what to give away in exchange for people giving you their name and email. The easiest offer is a report. Simply type up a how-to or report that gives something of value, convert it to PDF, and upload it to your server. Other options include video tutorials and consults.
Once your free offer is ready, you’ll want to sign up for a list service to manage delivery of the offer as well as the ability to send other email. List services also take care of CAN-SPAM issues and unsubscribe requests. MailChimp is free for up to 2,000 subscribers, making it a popular choice. Other email list service options include Aweber and Constant Contact.
Signing up is easy and once you do, you can create a list that includes welcome email, the link to your freebie and more. Add the sign-up form your website and then take good care of all the people who join your list.
You’ve made it to the end of week two. You have your business foundation in place. In week three, you’ll begin marketing your business.
Start a Home Business in a Month Series:
- Week One: Research, Decisions, Planning
- Week Two: Putting in the Foundation of Your Home Business
- Week Three:Creating Your Marketing Plan
- Week Four: Market, Assess, Success