How to Start Small Business from Home

This article helps you to start and run service oriented  businesses  from home.  The objective is to share basic information, a checklist and resources for startups

What is Small Medium Business

Generally size of investment and annual revenue  defines Small Medium Business.  In India the businesses engaged in providing  services are classified as follows:

  • Micro Enterprise:   The investment  does not exceed Rs. 10,00,000 (1 million).
  • Small Enterprise:  The investment is more than Rs. 10,00,000 (1 million)  but does not exceed Rs. 2,00,00,000 (20 Million)
  • Medium enterprise The investment is more than Rs. 2,00,00,000 (20 Million) but does not exceed Rs. 5,00,00,000 (50 Million)

What is Start Up?

A startup is a business started within 3 years as Micro Small Medium Enterprise (MSME)  that is just beginning to develop.

Small Office Vs Home Office (SOHO)

Whether  you start  from home or having office, the basics for business success is same.

Working with team and meeting clients are main purpose of Office.  In the age of internet and outsourcing virtually you can work with your team and meet your clients over internet.   If you need face to face interaction with  your team and clients are essential then you need to have an office.  Till then you can start and run your business from home.

Your Home Office Room Setup

When you work from home you can choose your own working hours and you are your boss. So nobody will direct you or supervise you.  So you need to be disciplined in your work.  You need to be self motivated.   It is better to have an office room in home.

  • On which part of the house do you set up your home office?  Make sure that it provides a convenient place for you to attend to business and work essentials.
  • Since you will be spending a maximum amount of your time each day in your home office, make sure it is a place you are comfortable with.
  • Find a quiet place in the house. Setting up your home office away from areas that offer a lot of distraction will help you increase productivity. This is an important consideration if you have young children at home.  Your work should not disturb your family members.  As well as your family members should not disturb your work.  So select suitable timing and work space.

Balance Work and Family

One of the biggest misconception about working from home is that it is not as demanding as any regular office job. Truth is, it requires more attention and work on your part. Therefore, you cannot afford to have interruptions from your family or friends while doing work. The best way to deal with this situation is to let your family know what your schedule is so that they can refrain from disturbing you during working hours. Let them understand when you need to work and when you are available to them for recreational activities.

Home Office Equipment

Equipment are an essential in your home office in order to operate effectively. Therefore, you need to identify what equipment you need to have in your home office for your particular type of business after you have decided on an area in your house to setup your home office.

Communication tools such as a telephone line, computer (either laptop or desktop), internet access, and printers are essential. When you are doing business, having contact with other business people are vital. One important reminder with your home office is to have a separate phone dedicated for business use, which is separate from your home use.

Home Office Furniture

Home office chairs are another essential, but often neglected, furniture. When you work at your desk for a long period of time, having a convenient chair to sit on will spell the difference. Work can lead to exhaustion after some period of time and a comfortable chair should offer you enough relaxation to improve your vitality so you can get back to work. Hence, make an investment on a comfortable chair.

Checklist for small business startup

Business Plan.     List your skills, knowledge, passions, and experience.  Based on these you select a product or service for your business.  Next conduct market analysis and find market potential.  Research well to find out who is your customers and what they value. You should have affordable customers.  Analyze competitors and prepare a plan to get your market share .  The best way to do this is create a business plan.  A lot paper work before beginning will save you lot of money and effort.  The business plan should have following parts.

  • Marketing Plan
  • Finance Plan
  • Operations Plan
  • Risk Management Plan
  • Human Resources Plan
  • Succession Plan

Business Name:  Select a name for your business. The name should be suitable for branding,  easy to pronounce.   Check for a domain name availability for this name.

Logo for your business:   Logo is graphical identity of your business.  You can outsource to design this logo from or any local designers or even you can do it yourself.  Keep your logo simple and unique.  Use one or two colors only in the logo.  Create multiple versions of your logo such as Black and White, RGB Color, CMYK Color etc.  and ensure it looks nice in all the versions.

Legal Status of Business 

  • Proprietor / Proprietrix
  • Partnership
  • Private Company / Incorporation
  • Public Company

This is most essential part of your business. Never  have any  ambiguity in partnering with others.  Analyze advantages and disadvantages of each status and decide a suitable status of your business.  Then you register your business and its legal status.


  • Income Tax Registration (PAN Card)
  • Business Registration
  • Sales Tax or Service Tax Registration (if required in the beginning.)

You need to open a bank account on your business name.  Banks will ask legal registration details to open an account.    Always consult an auditor for these processes.

Divisions of Business

All the businesses will have the four divisions.   They are

  • Operations
  • Marketing
  • Finance
  • Human Resource

If you are not good in operations and you can outsource your business processes or hire a team.  But being in business you must have very good knowledge and skills about Marketing, HR and Finance. These three skills such as  Marketing, Finance and HR are common skills for all type of businesses.  So when you succeed  in one business and you become expert in Marketing, Finance and HR skills then you can become serial entrepreneur.

To develop these skills there are plenty of resources are available in Internet.  I suggest HP


You create a website for your business.  You can create  website according to your budget and need.  Depends upon your need you need to get Web Hosting and Web Design or Development.  When you create your website you need to provide content.  The content creation should include

  • Vision
  • Mission
  • Product and Services
  • Contact Details

Always write your own vision and mission.  Never copy others.  This will help you to understand yourself and others can understand you.  Everyday read loudly your vision and mission statements.  That will help you to grow in the right direction.

Remembering your vision, mission and goals are very Important for Success

Stationery with corporate Identity

  • Visiting cards
  • Letter pads
  • Envelops
  • Stamps

These are common stationery for all businesses.   You need to procure them as per your requirement.

Sales Documents

  • Order forms
  • Invoice
  • Receipt
  • Quotation or Quotation Templates
  • Proposals or Proposal Templates

Bank Accounts

  • Current Account with cheque and net banking facility
  • Credit card

Always transact your financial transaction through banks.  It will be easy to track and authenticate a transaction.

Marketing Essentials

  • Brochures in Digital Format  (Website, PDF, Slideshow, Audio, Video)
  • Brochures in Printed format (if required)
  • Elevator speech / Short Summary (30 seconds speech to introduce you and your business in an impressing way when meeting your prospect)
  • IVR (Interactive Voice Respons) to handle sales and support calls
  • CRM to store and track your sales leads.

Marketing Resources

If you want understand Marketing principles it is good to start with Peter Drucker‘s five question.

  1. What Is Your Mission?
  2. Who Is Your Customer?
  3. What Does Your Customer Value?
  4. What Are Your Results?
  5. What Is Your Plan?


Regarding finance management always prepare budget periodically, record your transaction using accounting software, prepare your profit and loss statement monthly and review it.

For raising funds view this video from Google for Entrepreneurs.