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What to Consider Before Starting a Home-Based Business in 2023

Jan 28, 2023General Information

For much of 2022 and the beginning of 2023, headlines have been dominated by stories relating to economic downturns and uncertainty. However, even in the current economic environment, starting a business can be a great idea, when done right. In this article by QUIK Websites + Hosting, we’ll explore the various ways aspiring entrepreneurs can evaluate what to consider before starting a home-based business and the best ways to sustain, promote and make it successful.

What to Consider Before Starting a Home-Based Business in 2023

Find a Profitable Business Idea

Not all business ideas are made equal; hence, it’s important to assess your options and choose one with the potential to be successful in the long term. Here are a few easy-to-start business ideas to consider:

Freelance Writing: Since the start of the pandemic, more businesses than ever have pivoted to a digital-first strategy. This has resulted in a growing demand for writers who can write blogs, website copy, email promotions, and more. As a freelance business, you’ll be able to work with numerous clients at once across industries and niches.

Dropshipping: According to research by Shopify, sales through online purchases are expected to make up 23% of all global sales. Additionally, the value of the global e-commerce market crossed $5.7 trillion in 2022 and is expected to grow further in the coming years. By running a dropshipping business, you’ll place yourself in a prime position to take advantage of this growth and create a successful business by simply promoting and selling products online. The responsibility of manufacturing and order fulfillment will be managed by other organizations you partner with.

Decide How You’ll Sustain the Business

Regardless of whether you choose to sell products or services, you’ll need to invest in manufacturing, marketing, licensing requirements, storage (if needed), and various other business-related activities. For those who do not want to undertake debt, bootstrapping will be the best option. However, bootstrapping will require you to start a low-capital business and use your savings judiciously until the business becomes self-sufficient.

Those willing to undertake debt should conduct thorough research regarding current and future interest rates. Throughout 2022, the Fed consistently raised interest rates, making debt financing more expensive than ever before. While interest rates may ease in 2023, it’ll be better to avoid caution and speak with a financial advisor before making a final decision.

Choose a Business Structure with Tax Benefits

By default, all new businesses are considered sole proprietorships, which provide limited tax benefits to entrepreneurs. Additionally, in case of litigation or unforeseen circumstances, as the owner, you’ll need to bear the burden of unlimited liability.

Hence, the better option will be to establish a limited liability company (LLC) which registers the business as a separate legal entity, protecting your personal finances and assets from business-related liabilities, according to NerdWallet. Additionally, with an LLC, you’ll be eligible to use business expenses as tax write-offs, potentially saving you hundreds, if not thousands, of dollars annually. Given that LLC requirements differ by state, the best option will be to hire a formation service.

Invest Well Towards Marketing

Marketing is a key business activity that involves promoting your products and communicating their value to customers, with the goal of persuading them to make a purchase. To ensure your promotional activities are a success, remember to utilize these mediums:

Digital Marketing: Create business accounts on all leading social media apps used by your core audience. Consistently post content relating to your services, testimonials, offers, and more to drive engagement and grow your online presence.

Design Business Cards: When meeting clients during networking events, it can be difficult making a lasting impression, given the sheer amount of people attending such events. Here’s a possible solution – print business cards that include the name of your business, email, and other contact information, which can be used by clients to reach you anytime after the event.

Conclusion – What to Consider Before Starting a Home-Based Business in 2023

As experienced entrepreneurs will tell you, there is never a right or wrong time to start a business. Rather your focus should be on researching what to consider before starting a home-based business, along with a profitable business idea, creating a sound financial plan, and using various marketing mediums, such as business cards, to make an impression on customers and steadily grow your business.

Guest Post by Lauren McGee
Image Source: Pexels

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