Click to Print

The Basics of Starting a Home-Based Business

Everything you need to live, work and outsource from your couch
November 19, 2009
URL: http://www.entrepreneur.com/article/204124

The move from a fully-equipped office--with copiers, doughnuts and an IT specialist--to a home-based office can be tricky. What elements are essential and what can you outsource so you can effectively start, run and manage your business?

The same daily operations need to be taken care of and your computer will still crash, but there are people and programs out there to help. Here are some of the best ways to make "working for yourself" work for you.

Invoicing, time tracking, estimates, and information storage
Without an accounting and bookkeeping department, someone needs to handle your paperwork. If you're good with numbers, you can take it into your own hands, but what happens when you need to crank out that report for your new client before the end of the day?

A CPA can help record and track your time as well as process your invoices, and many of them take on individual clients. One site, outsourcing.org , provides a list of offshore firms looking for clients on a daily basis. And if you're weary of offshore firms and want to keep your business information private, web-based programs such as freshbooks.com offer invoicing, time tracking and client information storage as well as many other options that will only be accessible by you.

To store your documents digitally so your living room doesn't fill up with papers and filing cabinets, programs like DocumentMall and Digitech ImageSilo offer digital storage options for as low as $50 a month, depending on your specific needs. There are many digital copiers that can act as scanners to turn your paper documents into digital files.

Merchant services and billing options
Even though you are operating from home, you'll need to still accept credit cards. If you have an e-commerce website, you can set up direct payment with a merchant services provider and bring it all online. Additionally, if you are offering some sort of consulting service like public relations consulting or business plan writing, many companies pay by credit card instead of invoices, so it's a good idea to have this as an option.

Web design, online marketing, and IT outsourcing
You may want to invest in online marketing options to promote your business. Without the benefit of a brick-and-mortar location for customers, a website can be the best way to offer your services and get your name out to your target market.

Even if you're not a web-savvy tech guru, starting a website can still be relatively easy. Web-hosting services like Go Daddy offer templates for you to plug in company logos, information, blogs, etc. If you want an e-commerce site so customers can purchase products, or if you want additional features like flash, you might want to hire a designer. Shopping carts can be tricky and also costly if not implemented correctly because of fraud issues and security problems. A reputable web designer should be able to work around your budget, especially in today's economy.

Search engine optimization, pay-per-click advertisements and e-mail marketing options are all methods of online marketing. Planning out how you want to market your website can save you money in the long run, since SEO and PPC campaigns require your website to be designed in a certain way from the start.

With all this technology, you should invest in outsourcing an IT programmer to help with any computer problems and customer service issues you may have. IT outsourcing is considerably less expensive than staffing someone and is known to have saved businesses thousands of dollars.

Order Fulfillment
If you are retail-based, product storage can be impossible unless you have garage space to spare. The best way around this is to outsource your fulfillment services. Most fulfillment companies can work with your product suppliers to ship from their warehouse location directly to your customers.

The contract that you sign with a fulfillment company lists the details--storage, shipping, customer returns, order receipts and inbound customer calls--all for a management fee of a few hundred dollars a month. Remember that your business volume will dictate how much you spend because more business will lead directly to more work for them.

Internet, VoIP services and video conferencing
Working from a home-based business will require a consistent way to keep in touch with your suppliers, fulfillment companies, clients and business partners. A standard telephone connection is a great traditional option, but long-distance and international charges can add up quickly.

With a steady internet connection, a VoIP service provides video conferencing, digital voice mail, hold music and more features that any home-business owner needs. Voice over Internet Protocol is a technology that is internet-based, so you'll have an unlimited connection and lower long-distance charges than a standard phone system. If you get a VoIP service, ask about the "Follow Me" feature where a single number can ring to multiple phones.

Shopping wisely and running your living room
Home offices can range from extra bedrooms with entire computer systems to living room couches that are close enough to the wall outlet so you can plug in your laptop. You may find that some of the benefits of having an office are harder to replace than others.

Shopping around, researching your options and talking to your providers can save you money--and help build your company from the ground up.

A home-based business is no longer just a way to stay in your sweats all day--in fact, there are many options dedicated specifically to work-at-home companies that offer resources, vendors and advice. Hiremymom.com and virtualassistantforums.com are both great websites for entrepreneurs that offer good advice as well as success stories for the newly self-employed.