by Tracey Allen

Created on: December 13, 2009   Last Updated: January 22, 2010

Own your own business and live the American dream. Having your own home-based business can be daunting and the road to success isn't easy, especially for new start-up businesses. Having a successful home-based business starts with solid planning, and to help you here is a seven-step guide to starting a successful home-based business. 

Step 1 – What business?

The first and very important decision is to decide what business you want to start up. The best place to start is to write down all the things you like to do and your current talents. Business owners who love what they sell are usually the most successful. Then start to explore what options are available to you.  Whether it is an independent consultant, on-line retail business, cake decorating, wedding planner, writer, or something else there are plenty of options to make your dreams a reality.

Step 2 – Research the market

It is always a good idea to research the industry you are planning to set up a business in, what is your target market and how receptive will they be to your product/services, etc.? Industry trends are also important. Environmentally friendly products are popular, however, anything that consumes a lot of gas isn't.

Will you require any special permits or licenses for your business? What taxes will you need to register for or charge customers? Tax advantages are also something to look into at the onset so you don't miss claiming them on your taxes; car usage and home usage are just two tax advantages for home-based businesses to claim.

Step 3 – Develop a plan

Once you've decided the business you want to start and reviewed the current market, it is time to set up a plan. Where will you locate the business in your home? What will you need to set up your home office? How will you promote your business and reach your customers? What type of business structure will you have – sole proprietor or incorporated and what is the difference in tax advantages or liability issues?

Step 4 – Secure finances

Some businesses are pretty simple to set up, for example independent consultants where financing isn't an issue. However, if you plan to have an on-line retail store or you will require start up funds than this will be the point to secure your financing from your bank. Note: for small loans consider a line of credit as they are typically unsecured.

Step 5 – Business set up

Now it is time to set up – make sure you are completely ready before contacting customers since first impressions count.

Step 6 – Open your business

Congratulations! You are on your way to being a successful home-based business. 

Step 7 – Evaluate

A good business is always looking at ways to improve to stay ahead of the competition.

A great resource to learn even more about home-based business go to http://www.business.gov/start/home-based/

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