Starting a home business is an exciting experience. You can throw off the shackles of employment and be your own boss. Plus, you get the opportunity to pursue your passions from the comfort of your own home.
Not all that long ago, starting a business from home was just a dream for many people. But the pandemic had a significant impact on the business world, and now one in four UK workers have a “side hustle”.
It’s easier than ever now to start a home business as either a side hustle or your primary income source. If you’re thinking about starting a home business but you need some inspiration for a start-up idea, we’re here to help. We’ve put together three business ideas that work perfectly for anyone that wants to run their business from home.
1. Create a Craft Company
During lockdown, many of us got in touch with our crafty sides. Hobbycraft reported that their sales tripled during the pandemic as everyone got creative while stuck at home.
If you’ve got a crafty, creative skill, you can put it to good use by selling your handmade products online. There are many options available to you, including:
- Crafting wooden furniture
- Painting
- Knitting and sewing bespoke clothing
- Jewellery design
- Candle making
Whatever craft you choose, selling online is a great way to make some extra money on the side or create an entire business. Plus, it’s easy to sell online. You can create your own Etsy page or even create your own e-commerce website.
If you’re planning on starting your own craft company, it’s a good idea to put together a list of potential products that you will be making. You’ll also need to find suppliers and work out how much you will charge for your products.
If you create designs and prints, you can use a print-on-demand service to sell your designs through a third party like Redbubble or Printful. Doing this means you won’t need to source the physical products and make passive income from them.
2. Start a Dropshipping Business
If you love the idea of creating an e-commerce website or selling online, but you’re not particularly creative, dropshipping is an excellent choice. Dropshipping is a great way to start your own business if you’re on a tight budget.
Unlike traditional businesses, dropshipping businesses don’t purchase or stock the products they sell. Instead, they partner up with dropshipping suppliers responsible for managing products and shipping them to customers. There’s a massive number of dropshipping suppliers, and they offer a wide variety of products, such as:
- Health and personal care
- Office supplies
- Clothes
- Accessories
- Furniture
With such variety available, you’ll be able to find your dropshipping niche and make your business a success.
The dropshipping process is quite simple, but to give you an idea of how it works, here’s an example order process:
- A customer buys a product from your e-commerce website for your retail price.
- Once you receive the order, you forward it to your dropshipping partner and pay the wholesale price.
- Your dropshipping supplier ships the product to the customer, and you keep the profit.
Alternatively, if you want to be responsible for storing and shipping your products, you can buy products wholesale. However, it’s usually best to wait until you have some sales data before buying products wholesale. Without the data, you could easily buy stock that doesn’t sell.
3. Become a Freelancer or Contractor
Becoming a freelancer is one of the oldest methods of starting a business from home. Traditionally, freelancing was associated with writers and journalists. But there is a huge need for digital services nowadays, and it’s not just freelance writers in demand. Last year, Forbes reported that there is a coming boom in demand for freelancers. The sorts of services you can offer include:
- Graphic and web design
- Translation and transcription
- Accounting, bookkeeping and financial consulting
- Social media and marketing consulting
- Career and life coaching
Depending on the service you choose, there are some professional requirements, for accounting, for example. However, for many of the services, all you need is a little know-how and hard work.
Becoming a successful freelancer or contractor can take time, so many freelancers choose to start freelance work while still employed. Later, once they have more regular clients and income, they can go full-time.
Fortunately, there are plenty of freelance marketplaces like People Per Hour, Fiverr and Upwork. Businesses use these marketplaces to post freelance opportunities that you can bid for. The majority of freelancers use marketplaces, pitches and external leads from their websites to get work.
How to Set Up Your Home Business
If you’re planning on setting up a home business in the UK, you’ll need to ensure that you register with either HM Revenue and Customs or Companies House. You will need to register as a limited company or a self-employed sole trader for tax purposes. The registration process for both a sole trader and a limited company is relatively straightforward.
Sole traders only need to register with HMRC, and the process only takes about half an hour. You can apply online or by post, and you’ll need to supply personal details such as date of birth, National Insurance number, address and contact details. As a sole trader, your business will not be a separate legal entity, and you’ll need to submit a self-assessment tax return every year. Failure to do so can result in hefty penalties.
Private limited companies are a little more complicated to set up. A limited company is a separate legal entity to its director and owner. You’ll need to register with Companies House and supply your business name, company address, director and shareholder information and formation documents. You’ll also need to register with HMRC to pay your income tax.
The registration process can seem a little daunting, but it’s quite simple. Last year over 800,000 companies registered in the UK — so you can definitely do it.
