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Ask The Expert: Launching a Home Based Business

Join AARP Expert Felicia Brown along with Janet Attard, founder and CEO of Business Know-How, July 27-August 3, 2020 to discuss how to start and run a home-based business. 

 

As a result of the pandemic, many have considered the start of an online/home-based business, but may not know where to start.  Businesses, too, have sought help in pivoting to online and remote operations. This conversation will help businesses and individuals alike understand the do’s and don’ts of effective online/home-based business.  

 

We’re taking questions in advance, so please click ‘Reply’ to post a question today!

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Business Leader


@LynneS395495 wrote:

Hello my name is Lynn I am interested in starting a home-based insurance business I also would like to have a iPod. Please direct me on getting started selling health insurance/life insurance. Thank you


Hi Lynne,

Thanks for your question. Selling insurance can be a good profession to be in, but it can take time and patience to build the business. You have to like selling and not be offended when people say, “No” or simply don’t respond.

 

Before you can get started selling insurance, you’ll need to pass an exam and get licensed. If you search the web for the name of the state you are located in and “insurance licensing requirements” or similar terms you should be able to locate information for becoming licensed in your state.

 

Once you have the license you would contact insurance companies to see about representing their product lines.

 

Alternately, you could search online job boards for insurance agencies that will provide training for agents. I would guess that in those cases you’d be an employee of the company, and not your own boss, though.

As far as getting the iPad, if your budget is limited, I’d try to make do with whatever equipment you are using now to access the Internet.

Good luck!

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AARP Expert

@LynneS395495 this is great.  Let's see what @JanetAttard has to say to get you started.

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Periodic Contributor

Do we have to register?  What time are the sessions?

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Community Manager

Hi @cc54292467, we're not requiring event registration. The event runs Monday, July 27-Monday, August 3. This isn't a live event so you may post your questions at any time. Also, we're taking questions in advance if you'd like to post a question today. We look forward to hearing from you. Thanks! Lynne

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Felicia Brown @FeeBrown leads AARP’s Entrepreneurship Initiative focused on helping aspiring entrepreneurs understand the risks and rewards of starting a business. She manages strategic partnerships, and researches and develops educational resources for small businesses. She is one of AARP’s Work/Jobs Online Community experts.

 

Janet Attard @JanetAttard is the founder and CEO of Business Know-How®. The website provides practical information to help start, market, run and grow small and home-based businesses. An expert on small business and self-employment issues, Janet oversees the operations and content development for the site, which reaches more than 2 million individual business owners and professionals each year. She has been creating and running small business sites for 32 years, and worked as a freelance writer prior to that time.

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AARP Expert

Good Morning and welcome to our first day of Ask the Expert for Starting a Home Based Business.  We have with us this week Janet Attard who will answer your questions.  

 

We know there is great interest in launching a business you can operate from the comforts of your home.  Get all your answers here!  

 

Again, thank you for joining us.  We invited you to view AARP's resources at www.aarp.org/beyourownboss.

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Contributor

@FeeBrown  Thanks for inviting me to participate. I'm looking forward to helping everyone with their questions!

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AARP Expert

@JanetAttard  to start this conversation with our community, let's start with some basic information.  What would you say are some basic steps, things people should consider, when launching a home based business.

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Business Leader


@FeeBrown wrote:

@JanetAttard  to start this conversation with our community, let's start with some basic information.  What would you say are some basic steps, things people should consider, when launching a home based business.


@FeeBrown That's a great question. Sometimes people just jump into starting a business, without considering what's involved.

I think the first thing I would suggest people do is check out the excellent resource AARP has on launching a home business.

 

Some really important things to consider, too, are your own skills interests, financial situation and motivation. While many people dream of starting a business, the reality of being the boss and being responsible for finding customers, convincing them to buy, and making money can be stressful for some people. Others find the challenge exciting and love being in control of their own destiny. 

 

Then of course, you need to think about what kind of business you want to start and are qualified to start. If you’re looking around the web for ideas for businesses to start, be wary of business opportunity scams! If something sounds too good to be true, it probably is.

 

Once you know what kind of business you want to start, create at least a simple business plan.  Your plan should look carefully at whether or not there is really a market for the product or service you want to sell, and if you can create and sell the product to that market at a price that will be profitable to you.  

 

You need to consider all the costs involved, too. Will you have to buy inventory, equipment or supplies? What will it cost you to advertise?  Will you need to hire remote employees or independent contractors?  What will it cost to deliver the product or service or provide customer support? Other costs are likely to be establishing a website, a subscription with an email services provider for sending emails to customers.   What you are aiming at determining here is how much business you’ll need to do to break even and then to make a profit.

 

Take the time to check into regulations related to what you want to do, too. There are often state and local regulations that prevent people from running certain kind of businesses from home. Food businesses for one, are often highly regulated. If you’re planning to run a catering business, you might have to rent space at a commercial kitchen, for instance.

 

Once you’re ready to start the business, you may need to register your business name, get a tax ID and register to collect sales taxes (if what you sell is taxable.)   

 

A couple of really good resources for getting one-on-one help to start your home business are the Small Business Development Center and SCORE. Both are affiliated with the US Small Business Administration, and both offer free help for startups as well as existing businesses. They have offices in many locations around the US.  The counselors are working virtually with clients until business life returns to normal.

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AARP Expert

All, it's day two of our conversation about Launching Your Home Based Business.  I hope you've gained something from those who have shared about their business endeavors and the insights @JanetAttard provided to get you started or take the business to the next level.  

 

Don't forget, we are here all week.  Visit www.aarp.org/beyourownboss to access AARP's resources.  And, AARP and Brand Ambassador Daymond John is launching a contest for aspiring and current entrepreneurs. To sign up to get information visit www.aarp.org/mymcontest.

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AARP Expert

Community, it's day five and I have to say this conversation with @JanetAttard has been great.  She has given us such great resources to help each of you get started.  Janet has proven herself to be an industry expert in helping people launch home based businesses.

 

Research is showing us that there will be more HBB's as a result of COVID-19; so why not use this conversation to help launch successfully.

 

Earlier this week we've been talking about how to get started, let's shift the conversation a bit to how to market your HBB - what are some platforms and strategies/tactics to get in front of your customers.  @JanetAttard what have you found that could help our community?

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AARP Expert

Happy Monday Community...today is our last day of conversation about launching your home based business.  i hope you have found this conversation as enlightening and educational as I have.  @JanetAttard has been great!  We've talk about steps to getting started, the most popular home based businesses and marketing your business.  Hopefully, you are now ready to take the leap.  Many of you have shared your business ideas and we hope YOU are ready to take the next steps.

 

So, for the remainder of the day we are here for you.  No question is a bad question...remember, someone can learn from your situation.

 

@JanetAttard to get us started...talk to us about business designations...how does one determine the best designation for their business?

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Business Leader

@FeeBrown Happy Monday to you too! 

The form of business you operate as  (ie, your business designation) effects your tax status, can effect your personal assets, and has implications for marketing.

When you start your business you have to decide what legal form the business will take. You can run it as a sole proprietorship, partnership, LLC (Limited Liability Company), or Corporation. There are variations within those categories, too. (For instance, you can be an S corporation, C corporation, or not-for profit corporation.)

Each of the forms of business has their benefits and drawbacks and tax implications for how you report profits and losses.  I’ll summarize them as best I can, but I am not an accountant or attorney. The best way to decide what’s right for you is to talk to get advice from your own attorney or accountant.

The sole proprietorship is the easiest type of business to form because there’s not legal separation between you, the individual and the business. Essentially, all you have to do is register your business name with local authorities, where required, and start doing business. Although it’s not advisable, you don’t have to keep your business earnings separate from any other money you have. Having a separate account for your business activities makes it much easier  to keep track of and prove your business income and deductions when you file your taxes.

As a sole proprietor, you, not only reap all the profits, but you, personally, are responsible for all of the business’ debts, and any legal actions brought against the business.

Operating as either an LLC or a corporation and adding the LLC or Inc designation to your business name give your business more credibility to customers. The name sounds official, and established. So the LLC or Inc designations have some marketing value.

Both LLCs and corporations may offer some liability protection  - that’s why many small businesses choose them.  But you need to realize that when you start a business most lender, credit card companies and even vendors sometimes will require you to personally guarantee the debts. In that case, the liability protection of any form of business is not going to help you.

Both LLCs and corporations require you to separate business money from your personal funds. Both, require registration with the state government.  Both require written documentation describing how the business will be operated. The distinctions beyond that including the way taxes are handled can be complicated, among other reasons because there are different ways of organizing LLCs and different types of corporations.

For instance, most small businesses that incorporate, file to be S corporations because the profits are passed through to the shareholders and taxed only taxed once at the shareholder level. ( With C corporations, the corporation gets taxed on its profits, and then when the profits get distributed to its shareholders as dividends, the shareholders get taxed on the dividends.)  

LLCs can elect to be taxed as a corporation or S corporation…To understand the intricacies, and decide on the best form of business for your needs, you really should talk to an accountant or an attorney.

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@FeeBrown 

There are many ways to market a home business.  There are multiple opportunities online – everything from using social media, to blogging, selling in online marketplaces such as Etsy, and listing your business for free in Google My Business, and Bing Places for Business. Offline, networking and word of mouth are important. We have a list of 42 low-cost ways to market a business on Businessknowhow.com, as well as other material on the subject.

 

Many of the inexpensive options for marketing a business take a lot of time, however. And, the time you spend marketing is time you don’t have available to do client work, or other tasks. So, before you start implementing any marketing strategies, you need to be sure understand your market. Who will buy what you’re selling?  Why will they buy it? Where  are they likely to look for what you sell?.   The Marketing Strategies Essentials worksheet that can be downloaded from the AARP Be Your Own Boss page is a good tool to help you think through the answers to those questions.

@AARPLynne 

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AARP Expert

@JanetAttard this is great.  Now do you need to develop a marketing strategy, and if so, at what point is that necessary within your small business journey?

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Newbie

Why is there such an urgency to get our kids back into . It really makes. We wonder where are leaders heads are at at please please try to get to write evaluations on them to stop this Madness

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@FeeBrown  Yes, you need to develop a marketing strategy, or you'll waste a lot of time and money trying one method after another. The marketing strategy should be part of your initial business plan. You need to  measure the results of your efforts to be sure they are working, and re-evaluate your strategy periodically.

 

It's especially important to review your strategy now. Go back to that basic planning worksheet  (AARP Be Your Own Boss ) and consider whether your customers and/or their needs have changed and what changes you will need to make in how you will reach out to those customers and prospects today.  The strategies you used 6 months or a year ago may not work now.

 

In fact, you may need to change the products and services you're offering to your market in some way, too.

 

For instance, if the market for your handmade soaps has dried up, could you run an online course teaching consumers how to make their own soaps, and sell them the supplies?

 

@AARPLynne 

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AARP Expert

Community I want to direct your attention to a great article about starting your home based business...enjoy...https://www.aarp.org/work/small-business/info-2020/starting-online-business.html

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Contributor

Thank you for this outlet to secure information.

Would be interested to know if utilizing the on-line resource called LEGAL ZOOM in order to register a new business?

I recently asked an accountant if they would assist me but they charge $750.00.

 

Thank you for your assistance.

Gabby Sudo

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AARP Expert

@GabrielleS494401 you are absolutely welcome.  While I have not used Zoom Legal I'm sure there are some pros and cons to using it, as there is with any tool.  Let's get @JanetAttard in this conversation and hear what she has to say about using it for your purposes.

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@GabrielleS494401 You didn’t mention what services the accountant you spoke with would be providing and you didn’t indicate what legal form your new business will be taking, so it’s hard to know whether their fee is too high. Also, if you spoke with someone at a large accounting firm that works with mid-sized businesses, their fees tend to be higher than those of a smaller firm.

 

If you are going to be operating as a sole proprietor, it’s fairly easy to register a business name on your own. Depending on where you live, you fill out a form and pay a filing fee to a state or local agency. A Small Business Development Center office or SCORE Chapter in your area could tell you where to apply.  LegalZoom does have a low cost option for filing a DBA, however, which might save you some time and hassle.

 

Other forms of businesses are more complicated to set up and understand. While the fees through an online incorporation site like LegalZoom can be less than working with your own local accountant or attorney,  one-on-one consultation with local professionals is a good idea, even if you ultimately choose to use an online incorporation service to handle the paperwork.

 

An attorney or accountant can help you understand what's involved in operating under the different forms of business, so you can make a good decision about what would be best for you. In addition, an accountant can help you get your bookkeeping set up properly, provide financial advice for the business and help with year-end or other taxes you’ll need to file. 

 

Whichever way you decide to proceed, good luck with your new venture.

@FeeBrown @AARPLynne 

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Good morning community...it's day three of our conversation.  I hope you have found the dialogue informative for your budding home based business. 

 

To kick our day off, @JanetAttard what would you say are some of the more popular home based businesses that you have seen people have success?

 

Remember, to find more resources visit www.aarp.org/beyourownboss AND to register to get an email about the Small Business Contest, go to www.aarp.org/mymcontest  

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@FeeBrown @AARPLynne 

There are definitely some home businesses that are more common than others, but the real key creating a successful business is to sell products and services that consumers or businesses really need and can afford to pay for. Ideally, the business should be something you enjoy doing, too.

 

Service businesses are always popular home businesses. They usually don’t require a lot of money to start, and often capitalize on the business owner’s skills and interests. Some that have been common in recent years that can be done from a home office include working as a virtual assistant, graphic designer, web developer, search engine optimization specialist, or doing social media management for businesses. Writing and editing have always been popular ways to make money at home, too.

 

Service businesses where the work gets performed at the customers’ locations are also common home businesses. Appliance repairs, plumbing, and other home repairs things that people need and can’t or don’t want to do for themselves all can make good businesses if you have the skills and are physically able to do the work.

 

What services people are able and willing to pay for can change, though, so you have to keep an eye on trends. People forced to stay home from work during the pandemic, for instance, have been doing things themselves that they might otherwise have paid someone to do. Some examples are painting a couple of rooms in their house or mowing the lawn. Parents who are at home aren’t needing childcare services as much, or at all.

 

But these are just a few of many possible home businesses. The key is to think about what you know how to do, like to do, do well, and research the market to see if it can be successful. 

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@FeeBrown 

There are definitely some home businesses that are more common than others, but the real key to creating a successful business is to sell products and services that consumers or businesses really need, and can afford to pay for. Ideally, the business should be something you enjoy doing, too.

 

Service businesses are always popular home businesses. They usually don’t require a lot of money to start, and often capitalize on the business owner’s skills and interests. Some services you'd perform in your own home office that have become popular in recent years include working as a virtual assistant, graphic design, web development, search engine optimization, social media management. Writing and editing have always been popular ways to make money at home, too.

Service businesses where the work gets performed at the customers’ locations are also common home businesses. Appliance repairs, plumbing, and other home repairs things that people need and can’t or don’t want to do for themselves all can make good businesses if you have the skills and are physically able to do the work.

 

What services people are able and willing to pay for can change, so you have to keep an eye on trends. People forced to stay home from work during the pandemic, for instance, have been doing things themselves that they might otherwise have paid someone to do. Some examples are painting a couple of rooms in their house or mowing the lawn. Parents who are at home aren’t needing childcare services as much, or at all.

 

But these are just a few of many possible home businesses. The key is to think about what you know how to do, like to do, do well, and research the market to see if it can be successful.

The guides on the  www.aarp.org/beyourownboss page are great resources for getting started. 

If you're having trouble deciding what type of business to start, you might want to visit https://www.businessknowhow.com/businessideas/ for some ideas.

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