Creating a Home Business: A Step-by-Step Guide — AD

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Working from home might well sound like a good idea, and for some is a key motivator in setting up a business in the first place. That said, it’s true to say that a home-based business takes as much planning and organization as one based in a commercial property, so following an organized plan is important.

The steps to take:

Your business idea

Maybe you’re setting yourself up in an area where there’s an existing demand. For example, you may be a web designer setting up on your own with clients already lined up. Or perhaps you’re offering a unique product such as innovative storage solutions?

Alternatively, you may be going into business ‘cold’ with a new product or service: once you’ve done your homework and proved you have a viable business, then it’s time to take the practical steps to get up and running.

Accountancy and other professional help

An accountant can help considerably in ensuring you’re properly set up financially and prepare your documentation when it’s time to submit a tax return, so appoint a reputable professional.

Business structure and basic set up

Structure – what type will you choose? Sole proprietor, Partnership, LLC (Limited Liability Company), Corporation?

What you decide will depend on your business needs; professional advice from an accountant or lawyer will prove valuable.

EIN (Employee Identification Number) – you’ll need one from the IRS (Internal Revenue Service) if you set up a different bank account for your business but not if you’re a sole proprietor.

Zoning laws – check you’re allowed to set up a home based business in your area; some residential zoning laws forbid home businesses, so check with your city or county government.

Naming your business and a logo

If using a name other than your own, you’ll need to research whether or not your chosen name is already in use and apply for a DBA (Doing Business As).

To apply for a DBA, find out the address of your county clerk’s office and complete the paperwork.

If you’d like a business logo then take your time; an ill thought out, hurried design will create the wrong impression (and look unprofessional). Various online logo design tools can be used or you can ask a professional graphic designer – and look into trademarking your design.

Permits and licenses

You may require state certifications or licenses for some trades. 

Find out if you need to charge sales tax by contacting your States Comptroller’s Office; if so they’ll tell you what paperwork to complete.

Organizing business finances

Opening a dedicated business bank and savings account is ideal and may be mandatory, depending on what business structure you choose.

Consider how you’ll receive payment for your goods or services; if you wish to accept credit cards for example, you’ll require a third party payment processing account.

Your home office or workspace

Having a dedicated space or entire room at home is highly desirable as opposed to trying to make do on the end of the kitchen counter or half of the dining room table. 

Try to ensure the following:

  • A roomy desk or work station with plenty of drawer space
  • An efficient and easy to use filing system with enough filing cabinets
  • A comfortable, supportive chair
  • Good lighting both natural and artificial 
  • Reliable and fast internet connection
  • Ideally a second phone line separate from your personal one

Contact details

You may prefer to use a P.O. box or an accommodation address service rather than your real one.


In the digital age, you need a website whether to attract custom directly or to act as your shop window.

You don’t have to spend a fortune but your website needs to look professional; platforms like WordPress make it easy for people with just a modicum of web design knowledge to create a strong online business presence.

Don’t be afraid of approaching a professional web designer; some will offer good value packages based on a template-driven website design. It’s money well spent as a good designer will help you create a website that converts visitors into enquiries, sales or whatever you wish from initial website visitors.

If doing your website yourself, ensure it’s self hosted and not free. For example, WordPress offer self and free hosting – avoid free as it looks unprofessional and you may not have total control over the way you handle your content.


Draw up a realistic budget and decide how much money you may need to cover the start up and first months of trading such as in marketing and promoting yourself.

Excitement and trepidation

It’s an exciting time starting out with your own business, and there are many advantages in working from home, but taking methodical steps in setting it up will pay off as you get started.


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