How to run a home business (plus tips and considerations)

Updated 25 October 2022

Being your own boss can have a lot of advantages, including total control of your workflow and the financial benefits of your own hard work. There are legal matters to consider, along with techniques to ensure processes run efficiently and effectively when you establish a home business. Running a home business is a career goal for many people. In this article, we discuss some great ideas for running a home business smoothly and successfully.

How to run a home business

There are some important factors on how to run a home business you ought to consider. It's possible to do it, as long as you secure permission. You may need consent from your mortgage provider or landlord. If you intend to make major alterations to the building to start your business, you may need consent from the local planning authority. You're likely to need a separate business insurance policy. Depending on the size and turnover of your company, business rates may require payment.

If your business is likely to affect other properties in the area, for example, if you're going to have lots of customers visiting or deliveries arriving, the local council may also grant you a licence to operate. Finally, you might consider whether your company needs business insurance (as mentioned above) and ensure you're accurately recording your business costs and profits to complete a self-assessment tax return.

Eight useful ideas for running a home business

Once you have done the groundwork to ensure your business is operating compliantly and lawfully, you can focus on optimising your processes to make your company as successful as possible. There are lots of things to consider, including these ideas that make running a business from home as smooth as possible:

1. Make a schedule and stick to it

For many people, flexibility is a key motivation for starting a business from home. Some people have families or other commitments they want to make their business work around. Running a business from home can certainly provide a much more flexible and adaptable schedule compared to commuting and working in an office. So whilst you can set your own hours, the most successful home businesses are those which stick to clear working hours.

Having a clear work schedule is important to help you maintain a balance between your work and personal life, as these boundaries can easily blur when you work from home. It also provides consistency for you, your family and your customers. There's nothing to say you can't occasionally change your working day to suit an event or something that requires your attendance, but if you have a regular pattern of work, it helps you structure your business activities far more easily than if you just work sporadic hours.

Related: How to be self-motivated (With steps, tips and an example)

2. Separate your work space from your living space

Having a designated office or workshop is important to help you stay productive, as it's a crucial way to avoid distractions or the temptation to join in other things going on around your home. If you have a private space, this is the optimum place to get work done. Not only does it help you look professional if you speak to clients (either virtually or in-person), but it also helps provide a valuable separation between your personal and professional life.

If you live in a shared space without a viable way to have an entirely separate room to work in, it might be helpful to consider partitioning off a small area. If that is not workable, communicate with the other people in your shared space about what support you need from them and how they can be considerate in their use of the area. Having rules about things such as noise and television use can help create boundaries and limit the number of disruptions you experience.

3. Instil a work-life balance

One of the major downsides to running a business at home is that, if not carefully managed, it can feel like you're always at work. This makes it easy to lose track of time and carry on with work projects at all hours of the day and night. Whilst this can benefit your business in the short-term, for your long-term health and well-being, including that of the company, it's important that you can create a physical and mental separation between the time you spend working and your leisure time.

There are many ways to approach this. One is to set a clear deadline for when you switch off your work phone or laptop at the end of each working day. If you have a separate office, you could also ensure you leave it by a certain time each day and don't return to it until you're due to start work the next day. These things can help you maintain your energy and enthusiasm for the business and stop you from feeling burnt out after an intense period of work.

Related: How to improve self-management skills and use them at work

4. Consider your overhead costs

Basing your business out of your home, rather than renting an office or workspace, can bring significant savings on overhead costs. These are things like heating, lighting and water costs. If you're now at home a lot more during the day, it's important to think about how these costs may increase. Consider undertaking a price comparison for your utility suppliers to identify more favourable rates.

Some companies still have separate day and night usage rates, particularly for electricity and gas. If you're now using these utilities a lot more in the daytime than you have previously done, it's possible to save money by switching suppliers. It's also important to have a grasp of how much your utility payments increase by when you set up your home-based business, so you can factor that into your planning and budget and not just subsume the cost of increased bills into your household budget.

5. Learn about marketing

There are plenty of marketing companies that support small businesses; depending though, on your size and scale, you might consider that your limited budget cannot stretch to entire marketing contracts. Consider taking some classes or even just online courses to provide you with the basics of developing a marketing strategy. This can help you produce simple marketing materials to distribute locally, giving scope to understand the basics of social media advertising.

Before you even set up a business, it's useful to think about which social media platforms to utilise and whether your brand name works well on these platforms. Depending on your products and your target audiences, there are different platforms that might be most suitable for your business to build a presence on. Consider conducting market research to understand which platforms are most relevant to your business.

6. Excel at customer service

Word-of-mouth recommendations can be an important way of securing new business for companies that are just starting out. This is true if you don't have a huge budget to spend on marketing. Investing time and effort into customer service can help your company attract new customers thanks to positive reviews and personal recommendations. As you build up a rapport with clients, don't be afraid to ask them to leave reviews or tell their friends. Most people are content to help a business they have had a pleasant experience with.

7. Develop your brand identity

Having clear branding is a great way to help your business stand out, particularly if you're operating in a competitive industry. This includes having a logo, a clear and accessible website and cohesive branding of any packaging materials you use. You can consider other marketing materials like leaflets and coupons and think about how your branding appears on those to provide a coherent brand identity that makes them instantly recognisable.

Related: How to brand yourself in 10 steps

8. Follow trends and don't stagnate

Running a small business from home takes hard work, especially in the first few months and even years, when you're trying to establish yourself and build a name for your business. It's easy to spend your time and energy shipping orders, pitching to new clients and marketing your company, but don't forget that all industries grow and change. To get the most out of a company, small business owners can stay aware of what is happening in the industry so they can follow trends and ensure their business stays relevant and interesting.


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