Is it Expensive to Start A Home Business?
When thinking about starting your own business from home, one of the first things you may be wondering about is the cost to get things off the ground.
While there is no exact number or magic formula—it really depends on the kind of business you want to start and the skills you already possess—there are some general things you will most likely need when setting up your business.
You will need some kind of space in your home to work. Depending on your business, this step doesn’t have to cost you anything at all. You may be able to set up shop on your kitchen table with nothing more than a laptop and a phone. Then you can store everything away when not working.
Perhaps you’d prefer a small desk in the privacy of your bedroom where you keep your computer, a printer and some essential paperwork. Then there is the option of having a full-on office as a separate room in your home. Here you can have the space for a computer desk, printer and computer, filing cabinets and room to house products if needed.
Computer: You will need a computer, whether it’s a desktop, laptop or tablet, and reliable internet. If you’re already paying for internet for your home, remember that you can usually write off a portion of that bill for your home business expenses.
Website: Most home businesses benefit from having a website. I tell clients that you can think of this as your “home base” online where you can send people to find out more about what you do. You don’t have to spend a lot of money to get your site set up.
A great option is to set up your site with WordPress.org and invest in a domain name and hosting account. Once you’ve paid for domain and hosting, using WordPress to set up your site is free. Fees for domain names and website hosting vary and there are often discounts for pre-paying for a year or more at a time versus monthly payments.
Filing: Whether you sell products or you have a service-based business, you’ll need to consider some type of filing system. You may want to go the standard route with a filing cabinet or smaller portable file folder.
You can also consider keeping all of your important documents and filing online with in-the-cloud storage options like Dropbox. The basic free account starts with 2GB of storage space and you can access this from anywhere—laptop, desktop, phone, tablet. This is a great option for storing client files as well as important receipts and other documents.
Other software and hardware: Of course, there is an endless number of apps and tools to out there to save you time or money. My suggestion would be to focus on what you really need first to get your business up and running. Then add things as you need them.
Income/expense tracking: Besides keeping track of client files and your own receipts for your business, you’ll need a way to track your income and expenses.
I suggest using whatever method works best for you. That may be an Excel spreadsheet, a Google doc or an online program. A great option here is Freshbooks, which does have a free option to start.
You can invoice, track your income and log all of your expenses in Freshbooks. Having all of this information at one place makes things much easier at tax time.
Legal: This one really varies on the type of business you want to start as well as where you live, but it’s always a good idea to find out what you need to do from a legal standpoint. You may be required to register your business and business name. You may want to look into business insurance.
Check out sites like LegalZoom, the US Small Business Administration or speak to a lawyer. The cost for these things will vary, but it’s best to do your research and find out what you need ahead of time.
Marketing: Depending on your business, you’ll want to research to see if online marketing, offline or a combination of both is best for you. Search for your target market to see where they’re hanging out in groups and forums on Facebook, LinkedIn and other social sites. There is no cost to join, participate and make yourself helpful to your target audience.
Don’t forget to search for local networking groups, Meetups or Chamber of Commerce events. This is a chance for people to meet you face to face so that you can start to establish the know, like and trust factor.
If you’re planning to attend a lot of in-person events, don’t forget to have business cards or brochures on hand. Sites like Vistaprint and Moo have very affordable and customizable options for creating your printed marketing materials.
While this list is not the final answer of all the costs to consider when creating a home business, it does give you a place to start. There are always more gadgets that you can buy or courses/products to help you advance certain skills in your business.
My suggestion is to stick with what you need right now in this phase of your business in order to move forward. And speak to someone who already runs a business doing what you do. The advice from someone who has been where you are can be invaluable when it comes to the cost of setting up your business.
Alicia Jay is a virtual assistant mentor who shares tips, inspiration and resources, encouraging women to follow their dreams of having a business that works around their lives—not the other way around. You can find more from her at newVAadvice.com.
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