This Toolkit for your Start Up Home Business provides all the necessary guidelines to help you get your business up and running. This toolkit is designed to give you all the information necessary and provide a structured approach for getting your business started as quickly as possible.
Step 1 – Decide what type of business you want.
Many sources can provide business ideas and suggestions. There may be ideas that you are passionate about, or there may be a need. One example is when I was younger, my children needed transportation to pick them up at school. There wasn’t a school bus service. A friend helped us pick up the children and quickly realized there was demand. His new business was then born.
Step 2 – Do some research on the business idea
My friend conducted an informal survey with parents to find out the demand and potential revenue for school transportation services. You may need to conduct both formal and informal research depending on your business idea. However, the goal is to gather enough information to help you make informed decisions about the business idea.
There may be many business ideas that you have in your head, and you would need to choose which one to put into practice. Consider the following when making your decisions:
The market size – in terms revenue, customers and growth potential
Competitivity of the market -How many businesses already operate in this space?
Who are your target customers? If the market is highly competitive, you might want to look for niches that may be unmet by existing suppliers.
What do customers want? (demand)
Which area are customers located?
What is your marketing strategy to reach them and provide services? (Your marketing strategy). In a future article, we will discuss more of this.
Who will you be supplying if you don’t produce your product or service? To give yourself more leverage and negotiate the best deals, I recommend that you identify at most three suppliers.
You will need to inquire about licenses if you intend to import or export.
Tip: Focus on the idea you are passionate about. You will find the strength to persevere in difficult situations if you are passionate about your business.
Step 3 – Choose your business structure
This article will focus on home-based businesses. Therefore, it is assumed that your business structure is either a sole proprietorship (or a partnership). I will give a brief overview of the three most common business structures that can be used to set up and register a business.
Solo proprietor – a business with only one owner. Sometimes it is called a “one-man business”. The business is you, and you are the owner. You are the business owner and you must make all the decisions. All profits are yours and all losses are yours.
Partnership is an association of two or more people who join together to create a business. Partnering with family, friends, or anyone else is possible. Both you and your partners share in the business’ profits and losses equally. Limited partnerships may have different arrangements regarding contributions, profits, and losses.
Corporation is a type of business structure that gives the business a separate legal identity from its owners. Shareholders are the owners of a corporation. A corporation can be founded by one person in certain countries. One key difference between a corporation (or other business structures) is that shareholders have limited liability. They are not personally responsible for any corporation’s debts. They are entitled to share in the profits of the company by receiving dividends and stock appreciation.
Step 4 – Register Your Business
Once you have decided on the business structure, you need to register it with the appropriate authorities in your country. You don’t need to register if you are sole proprietor or use your business name. All business names must be registered.
Once you have chosen a name, you will need to search the database of registered companies to ensure that it isn’t being used by any other person or company. After you have found the name that you like, you can register it with the appropriate government agency.
Step #5: Calculate your startup cost
These guidelines are for a home-based business, which may not have the same expenses as a business operating outside of your home. The best way to finance your business is to calculate your start-up costs.
Start-up expenses- examples- business cards, flyers, promotional expenses etc.
Assets that can be bought include: a desk, chair and filing cabinet. Software licences, printers, inventory, etc.
Monthly expenses: website hosting fees, online charges and fees, subscription fees, business phone, advertising expenses, distribution costs, etc.
Tip: Multiply the monthly expenses by 6 months, since it can take up to six months for a breakeven or a profit.
Add the numbers in 1+2+3 for your total start-up costs
Step #6 – Forecast your Revenue
Divide your monthly expenses by the number business days you work each day to calculate your breakeven income. Any amount that you can access is your profit.
Step #7 – Prepare your Business Plan
Even if you’re self-financed, it is a good idea to prepare your business plan prior to applying for financing. Your business plan is your roadmap showing how your business will achieve your goals. These are the key elements that you should include in your business plan:
– Description, vision, mission, goals, and objectives
Operations & Management – Information about the owner, including location, staffing, inventory and suppliers. Delivery and distribution are also included.
– products and services. Customers. Pricing, promotion, advertising, etc.
Financing – assumptions, operating costs, asset requirements and operating expenses. Sales and revenue forecasts etc.
Step #8: Get financing for your business
Recall that the main focus is on sole proprietorships and partnerships. There are many options for financing depending on the structure of your business and how large your business is.
Personal Savings – You may have enough personal savings to start your own business. Partner would contribute to financing the business on the basis of the partnership agreement.
Line Of Credit – You may have a line of credit from your bank that you can use for financing your business.
Credit card Depending on your credit limit, your card could be a great source of short-term financing. This could have a very high interest rate.
Borrowing from Friends- To supplement your personal savings, you can borrow from family or friends
Institutional Borrowing – You may approach a bank or credit union for business financing. This is where your business plan can be very helpful. A solid business plan is required before your financial institution will lend you money.
These are the essential tools you need to start your home-based business. Enjoy using your toolkit, and good luck with your business venture.
Note for those who want to Import or Export
These shipping terminologies will help you to be more familiar
On Board (FOB). This quote represents the price of the goods and the cost of loading them onto the ship or plane. All customs export formalities are handled by the supplier at the loading port. There is no freight or insurance.
Ship Along Free (FAS). It is the seller’s responsibility to deliver the goods at the port agreed upon. The buyer must clear the goods for export. They also have to bear all costs and risk of loss or damage.
Price and Freight (C&F, CFR) – This price includes the cost for the goods as well as the cost of ocean freight to get the goods to the port.
Carriage paid To (CPT – Seller pays freight to transport the goods to their destination. The seller exports the goods.
Cost insurance and freight (CIF) – The seller is responsible for the insurance coverage until the goods reach the port of entry.
Delivered duty unpaid (DDU), The seller must deliver the goods to the designated place in the country of import. The seller bears all costs associated with transporting the goods to this point (exempting duties, taxes, and other charges).
Delivered duty paid (DDP) – The seller absorbs all DDU costs, as well as the duties, taxes, and other charges for delivering the goods at the destination.