There is no doubt about the fact that running an online business from home is very difficult. However, with that being said, although it is difficult, it is not impossible, and with the tips that we are going to provide you today, it is more than doable. However, you do need to follow the right steps, various rules, and the right methodologies. Let's get to it and talk about the best tips on running a business from home. We want to provide you with a detailed step-by-step tutorial on how to get started.
Tips On Running An Online Business From Home
1. Determine the Business Idea
The first thing that you need to do is to come up with an actual idea for your business, a certain set of goods or services that you are going to sell for a profit. What it really all comes down to is finding a niche or a focus area. Refer to the list below for some great tips on how to determine your business idea.
- One of the best ways to determine what kind of business you will run is to identify a problem that people have, one that does not yet have a good solution (or a problem that you have an even better solution to). People always want their lives to be easier and are generally willing to pay for increased convenience.
- A good way to figure out what kinds of goods and services people want, as well as what kinds of problems that you could provide solutions to, is to do some simple research. Now, you could do an email survey campaign, set up a social media site, or even go around in your neighborhood and quite literally ask people what they want and need.
- Another good way to determine what your business could focus on is by doing market research in terms of where the largest demand for a specific good or service is, combined with the lowest supply. The more demand there is, and the less supply, the greater the opportunity to start a successful business.
- Yet another way to come up with a business idea is to take a look to the future. For instance, our world is slowly but surely moving away from fossil fuels, because we humans are recognizing that we are quite literally burning the earth around us. Therefore, alternative and clean forms of energy are becoming much more popular. Solar power may not be a massive business yet, but chances are that it will be in a few years down the line. This kind of forward thinking is how the best and fastest growing businesses get their starts.
2. Do Product Research
Once you have a basic business idea in mind, the next thing that you need to do is to conduct product research. The fact here is that there are three primary types of products that you can sell online. These include physical goods, digital downloads, and services.
Three Types of Goods
- Physical goods can be any kind of material goods, whether bathroom products, pet products, toys, electronics, or anything in between.
- Digital downloads could include things like audio courses, online courses, E books, and even games.
- Services can include putting anything from plumbing and lawn care to construction, heating and air conditioning, and much more.
How to do Product Research
Ok, so we have told you to do product research, which is very true, but that said, how exactly do you research products? What does this process entail? Refer to the list below for some of the best tips on how to do product research.
- A great way to go about this is to read reviews about other products, of course, products that are related and very similar to those that you plan on selling. Check out what the most popular products entail, what features they have, and most importantly, their shortcomings. Once you identify the shortcomings of other similar products, you can then go about making something bigger and better.
- Keep in mind that you always want to focus on products or services that are in demand. When you do product research, you want to focus on the best that the market has to offer, not the bargain or cheap stuff. When you want to be the best, you have to compare yourself to the best. Comparing yourself to the worst is a surefire way to fail. You need to provide your customers with a better version of the goods and services that are in high demand.
- Although this takes time and is very hands-on, an old but good way to do product research is to actually get boots on the ground. Go out to your local retailers and see what they have to offer. For instance, if you plan on selling pet gear, check out both physical and online stores to see what the competition is doing. A big part of product research is knowing what products the other guy offers.
- Another good way to perform product research is to host some focus groups. This way, you can ask a group of people about their experiences with certain products, you can figure out exactly what people want the most, and you can determine exactly what you need to be selling. Getting feedback on something like a prototype can go a long way in product research.
3. Determine the Target Customers
The next thing that you need to do when starting your online business is to determine who your target customers are. Yes, this point is related to the first two, to determining what your business idea is, and to doing product research, but it is also separate. What you need to do here is to determine who the people are that are going to buy your products or services. Below, we have included some great tips that will help you determine your target market and customers.
- Do product research within the niche that you plan on joining, and see exactly who is buying what.
- If you happen to have already started your business, a great way to determine the best target audience is simply by analyzing who is already purchasing your goods or services. If nine out of ten people buying your goods are males between the ages of 16 and 32, well, there’s your primary target audience.
- Another good way to determine who your target customers are is by looking at existing sales and marketing research, particularly in terms of demographics in relation to specific niches. What kinds of buying habits do certain demographics group have? How expensive is your product and how much money do certain groups have to spend on it? Are there more pressing concerns that specific groups are focusing on?
- Yet another way to determine your target audience is by analyzing path and pain points, or in other words, how do certain groups of people come to a buying decision? What considerations do certain people make when choosing whether or not to buy something?
- Finally, a good idea here is to target very niche specific groups. When it comes to gaining popularity and building brand loyalty, casting a very wide net usually does not work too well.
4. Create a Solid Business Plan
Yes, this point is related to the previous three. The fact is that your solid business plan is going to consist of product research, a business idea, and your target audience goals. Moreover, your business plan is also going to include things like what kind of website you're going to create, what sort of payment methods you're going to use, how you're going to market your product, and much more.
Simply put, you need to cover all of the bases here, all of the factors that contribute to running a successful online business.
Everything should be laid out in a clear, step-by-step manner with everything being properly labeled. This is really just like anything else. You don't want to start blindly. Starting without a plan and just winging it is not a way to achieve success. Once you have a solid plan of attack set in stone, you can then move on to actually starting the business. If you are unsure how to put a business plan together, take a look at LivePlan.
5. Acquire a Business License (If Needed)
What is important to note is that if you're planning to start an online business that sells products or services to customers, you will most probably need a business license. At the very least, you will likely need a business license simply to be allowed to sell your goods and services to people (although do keep in mind that this depends on where you live).
Some places may require you to get a business license to run a simple online business, whereas others may not. Therefore, our official recommendation is to look into the laws and rules surrounding online business for where you live.
Do also keep in mind that providing people with certain services will also require a license. For instance, you can't just start working on people's electrical systems without an electrician’s permit, although this is not really related to requiring a business license.
Inc Authority offers a company formation service. They will check for a business name availability, provide you with a registered agent, consult you on taxes and funding, and fill in an S-election form. For an additional cost, Inc Authority offers website creation, marketing packages, legal advice, and more services to keep your online business operating successfully.
6. Acquire a Business Loan (If Needed)
Hopefully, if you do things right and you keep your startup costs and your overhead costs low, you won't need to get a business loan. However, in some cases, you might not have any choice but to get yourself a loan to get started.
Now, if you're providing services to people, this might mean that you need a loan to buy the equipment you need to provide those services, such as lawnmowers for a lawn care business.
On the other hand, if you're selling product and you need to create a stockpile, you're going to need a whole lot of startup cash to create a small inventory of products that you can then ship to people. Afterall, you cannot sell products that you do not have.
Yes, get a business loan if necessary, but if at all possible, try to keep your costs so low that you can get started with whatever cash you have in your pocket.
If you need a business loan for your online business, Commercial Loan Direct is a good option.
7. Getting an Accountant for Those Business Taxes
Although this is not 100% necessary to stay on top of the legalities of it all, you may want to get an accountant to take care of your business taxes. Whatever the case may be, if you are running an online business from home, always remember to keep those business taxes in mind. If you don't pay your business taxes, you will end up in a good deal of hot water.
To keep the accounting side of your online business up to date, it better to have online bookkeepers like Bench taking care of everything.
8. Hiring Employees and Virtual Assistants
OK, so you might need some employees to help you out. After all, most businesses cannot be run by just a single person. All that being said, you do want to consider the fact that employees cost money, which is of course a part of your overhead costs. Therefore, when you're just starting, it is recommended that you try not hiring anybody and take care of as much as you can by yourself.
If need be, you can always hire some freelancers or some people to work part-time. However, what you really need to avoid doing is hiring anybody on a full-time salary, because that is going to cost you a heck of a lot of money. Something you can always look into is hiring some virtual assistants to take some of the load off of you.
A few options to outsource work to includes:
More Tips on Running an Online Business from Home
There are of course many other tips we can give you in terms of running an online business, so let's do that right now.
- Remember folks, a big part of running a successful online business is your website. If you expect people to know who you are and to know what you were selling, then they actually need to be able to find you. Therefore, having good website that is SEO is extremely important. When it comes down to it, search engine optimization is something that you absolutely need to focus on.
- Every good entrepreneur running an online business from home needs to have an office. OK, so if you are a single person living alone then this is not a big issue. However, if you have pets, kids, and other people living in your home, then you definitely want a dedicated space that you can work in without other people bothering you from morning until night.
- Something you should always try to do is to pay attention to your competition. How much competition is there? Who is your competition? How successful is your competition? You need to know what your competition is doing, and you need to know how to do it better than them.
- Although this is not one of the biggest things, what you also need to do is invest in a decent Internet connection. Folks, if you're working online from home, having slow Internet is going to be super annoying. Remember, time is money, so the more time you save, the more money you save.
FAQ
What Makes a Home-Based Business? – Pros & Cons
Some of the advantages of running a business from home include getting tax benefits, reducing your expenses, and not having to travel. The downsides include issues with motivation and distraction, as well as limited socialization with others.
Is it Legal to Run Your Online Business from Home?
As long as you have the proper licensing, there is no reason why you cannot run an online business from home.
What are Tips for Building a Virtual Business?
Tips for building a virtual business include doing market research, knowing who your target audience is, knowing what goods or services you want to sell, and how you are going to market them. Of course, a huge part of building an online business is the website along with some great search engine optimization.
Conclusion
The bottom line here is that although there are many facets that you need to keep in check in order to make your online business successful, doing so is definitely possible. If you follow all of the tips that we have provided you with today, you should have no problem starting and running an online business.
