Homemade Small Business IDEAS
Many types of products lend themselves to home-based production.
Jupiterimages/Brand X Pictures/Getty Images
Starting a business making and selling a homemade product can save you the considerable startup expense of leasing and equipping a facility. In addition, owning and operating a home-based business allows you to move easily between work and personal activities. This is an advantage if you are disciplined and focused, but it can be a problem if you are easily distracted.
1. Research the guidelines for producing a homemade product in your area. If you are interested in starting a food business, your options will probably be limited by regulations restricting the types of items that you can produce in a home kitchen as opposed to a dedicated commercial kitchen. You will most likely encounter few restrictions if you are producing homemade products such as sewn blouses or paintings, but you may need additional permitting for businesses such as welding or glass blowing, which can be dangerous. In addition, the scale of your business may determine whether or not you can operate it out of your home. For example, if you make soap in limited quantities to sell at your local farmers' market you probably won't encounter much difficulty making your products in your home, but if you are manufacturing soap to distribute nationally you may run into zoning restrictions limiting street access for pickup and delivery, or manufacturing odors.
2. Dedicate an area of your house to your business. You will operate your company more efficiently if you are able to keep your equipment and inventory ready for use than if you have to pack and unpack your business infrastructure every time you want to begin production because your business space is also your dining room table. If necessary, start with a small space and expand over time as your business grows. If possible, make minimal changes to your home to limit startup costs.
3. Consult with your accountant about the tax ramifications of operating a business out of your home. For the most part, the IRS allows you to write off a portion of your rent or mortgage if you use your home for your business, offsetting your taxable income from your business. To legitimately take this tax deduction, you must measure the amount of space in your home that you use for your business, calculate the percentage it makes up of your total square footage and then take that same percentage of your rent or mortgage as a tax deduction.