A Checklist for Your New Home-Based Sales Businesses
I know, you’re anxious to start your new home-based merchandise sales business and start bringing in extra income. Although you’re probably bursting with business ideas and enthusiasm, and want to jump right in with both feet, please do take some time to plan and prepare for your new venture.
Here’s a brief checklist you can use in the start-up phase of your home-based merchandise sales business. Feel free to add additional check-points of your own, or ask us any questions you might have here or on the ECN Forum. We are here to help you have a business of your own, but not all on your own. We can only succeed in our mission, when you succeed in a business of your very own!
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1- Assess your personality. Are you the entrepreneurial type that will do well with your own business? Are you self-motivated, disciplined, and willing and able to put forth the effort, time, and money? Are you the type that can get up after a failure and try again? There are many quizzes available to help you decide whether or not you’re ready for a home business.
2- Appraise your skills, knowledge, and experience. Make a list of the various sales methods you think you would be capable of building into your new sales business.
3- Know your interests. If you’re doing something you like, you are more likely to work harder and enjoy yourself. Try to develop your product lines around what you know and like… Sales are best made when you really know your product lines.
4- Figure out what kind and type of sales business you want to run. Out of the huge number of product possibilities, select one (or more) that works well with your experience, skills and interests. Perhaps starting a wholesale or retail jewelry business would be right for you?
5- Do some market research. Is there a demand for the products you plan to sell, and at the price at which you want or need to sell them in your market area? After your product costs and (projected) expenses, will you be profitable?
6- Check out your competitors. How will you distinguish yourself from them? Why should customers come to you instead of to them? What are they doing right or wrong, and how can you improve upon them? Develop your own “Unique Selling Principles”.
7- Select a business name. Make sure you don’t infringe upon someone’s trademark! You can research trademarks at MarksOnline.com. Consult with a qualified legal professional for more information. If your business name and real name are not the same, you will likely have to file or record a “fictitious name” certificate. (AKA: DBA in some localities – “Doing Business As”. Check with your county clerk’s office.)
8- Know the zoning regulations in your city or town. Make sure that you are permitted to operate a business from your home. Some areas may also place restrictions on the type of business that can be operated from your home.
9- Find out what licenses, registration, or permits you need to operate your home-based sales business. Ask if you will need a business license at your city or county offices. In most states, you will need a state sales tax permit or license. Make inquiries of your state revenue authorities.
10- Research any additional regulations applicable to your products. Find out if there are restrictions on selling them from your home.
11- Select a business structure, such as sole proprietorship, partnership, LLP, LLC, “C” or “S” corporation. Again, you may want to consult with tax (CPA) and legal professionals to determine what’s best for your specific situation. (Note: Nearly all small, home-based businesses start out as a sole proprietorship. This is the simplest and easiest to start business form, although it does have some limitations that may or may not be suitable or acceptable to you or your situation.)
12- Assess your financial situation. Do you have enough cash and cash reserves to finance a business start-up? How will you handle emergencies? Don’t forget about marketing expenses – the success of your business will depend in the largest part on how well you market it.
13- Secure additional funds, if necessary. Loans, lines of credit, savings, and regular employment income are some ways that entrepreneurs can finance their businesses. The US Small Business Administration has a useful list at http://www.SBA.gov.
(Note: While there is much hype about government grants, these are few and far between. Generally, most people will not qualify for one of these very rare government grants. See the information on the SBA website for full details.)
14- Prepare a business plan to help you plan for your financial needs and projected cash flow, define your business goals, and stay focused. You may want to take the no-cost online course at http://www.MyOwnBusiness.org to help you build you own business plan.
15- Investigate the costs associated with purchasing the supplier provided proprietary materials, necessary operating equipment, supporting materials, miscellaneous business supplies, and opening inventory. Contact several suppliers to compare quality, prices, and service.
16- Talk to your local tax office. Ask for any relevant information on how your home business will affect your tax situation. Business use of your home may be a tax deduction. Also be aware that it may increase your real property tax, if you take that deduction.
17- Consider purchasing additional insurance to cover your business assets. If your customers come to your home, increase your liability insurance to adequate levels.
18- Set up your home office. Establish rules and ‘office hours’ when customers can generally expect to reach you. Consider setting aside a room specifically for your office space. If you do not have a second phone line just for business use, consider having one installed, as well as a good quality answering machine for when you just cannot take an incoming call – or you are not available.
19- Talk to your bank about a business checking account, to keep your business and personal income and expenses separate. If you intend using a credit card for your business expenses, set one aside (with a “zero starting balance”) just for this purpose – and do not use it for personal expenses. Be sure to pay off the entire balance as the bills come in every month from your business checking account. Talk to your banker about opening a “merchant account” so you can take credit cards for your sales.
20- Consult with professionals. Depending on your situation, you may need to use the services of lawyers, accountants or bookkeepers, insurance agents or brokers, and several others.
There’s a lot more, but this should get you off on the right foot. When you need more information, guidance and help, come back here and talk to us… unlike the government, we really ARE here to help you succeed, every step of the way!
