When you think of owning and operating a business, you might think about renting commercial real estate, commuting to an office, or managing employees.
But with the rise of home businesses, more and more people are discovering ways to use remote work to pursue entrepreneurship with their headquarters at home.
In today’s connected world where technology affords us more flexibility in how and where we work, home-based businesses come in a wide variety of forms.
Some require you to convert a spare room into a mini-warehouse for products, while others can be run completely online. But generally, you can start these types of businesses using your existing space and means.
What makes a “home-based” business: The pros and cons
A home-based business is a venture—whether full-time or run as a side hustle—that you can start and operate using your own home as your base of operations. A few home-based businesses, especially those that sell online and don’t buy and hold lots of inventory, can even be run on the go—you don’t necessarily need to be bound to your home.
Naturally, there are pros and cons to consider when deciding whether a home-based business idea is right for you.
- Fewer overhead costs (such as warehousing fees), plus potential tax deductions you can claim.
- The option to sell products or services locally or internationally.
- Flexible work/life balance, which is ideal if you’re a stay-at-home parent or a retiree, for example.
- You can create a family business where your relations or your spouse can chip in as needed
- You may need to convert space in your home to support the needs of your home business (e.g. holding inventory, creating a home office, or storing equipment). The challenge can be doing it without disrupting your life at home.
- You still have to comply with any regulations that pertain to the business you want to start (e.g. you may still need to rent a commercial kitchen if you plan to sell food products or a license/permit to hold inventory).
- Your business may outgrow your home and require you to rent additional space and hire employees.
- Working from home offers you a lot of freedom, but it can also be lonely. This might be difficult if you enjoy being around other people.
Home-based business ideas you can start today
1. Buy products in bulk and sell them online
Many businesses center on the simple concept of importing products in bulk and selling them individually for a profit.
Maybe you recently traveled abroad and came across unique products that aren’t readily available in your market despite an appetite for them. Or maybe you’ve zeroed in on a niche and know the perfect products to serve its customers.
Either way, if these products are relatively easy to store and ship, you may have a solid home-based business idea on your hands. Blue light blocking glasses, for example, are small and durable enough to store in your own home.
Your home can even be used as an initial showroom—which is how Artemis Design Co. got its start—to sell locally, giving you the option to expand with additional storage space and employees as you validate your idea and sales start to ramp up.
2. Sell homemade products
If you’re a maker yourself (or know someone who is), you can also consider turning a hobby into a business. Even if you have to create your products elsewhere—in a studio, commercial kitchen, or workshop—you may be able to store them and sell them in your own home.
With the ability to control nearly every aspect of the products you sell, you can make them more cost-effective, improve their quality, or cater them to a certain audience to target demand in the market.
Whether you choose to start on a marketplace like Etsy or want to build your own branded storefront, selling your creations is a great way to share your passion with others and make money too. Just be wary of regulations concerning products that customers ingest or put on their skin.
Examples of handmade products you can sell include:
Best of all, producing your own products doesn’t have to be overwhelming. When you’re ready to scale, you can establish a process and onboard new employees to help with production.
3. Start a dropshipping store
So far, we’ve covered business ideas that require you to hold inventory in your home. But there are a variety of online businesses you can start that take inventory and shipping off your hands.
These businesses employ a dropshipping model, where a third party produces, stores, and ships your products on your behalf, leaving marketing and customer service as your chief responsibilities.
Your dropshipping supplier can be local or overseas, but you need to ensure you find a supplier you can trust to deliver a consistently great customer experience after the sale. Always do your due diligence or you might put your business’s reputation at risk.
There are even Shopify apps, such as Oberlo, that can connect you with suppliers to import products into your own store while streamlining order fulfillment.
At its core, dropshipping involves becoming a distributor of a third party’s products, taking on the costs of marketing (time and money) to be rewarded with the margins when you make a sale. This can make your products a commodity in many cases with limited opportunities to brand your customer experience. Luckily, there are a few different ways you can still compete even when there’s no shortage of your products in the market you’re selling in:
- Curate products, from different suppliers, to create a store that serves a specific niche.
- Compete through quality content and customer service that creates value beyond your products.
- Target an underserved region of the world (be sure to pay attention to your shipping costs).
- Target a new audience with the same products (e.g. LED shoes can be marketed to music festival goers or runners).
If you’re interested in learning more about starting a dropshipping business, be sure to check out The Ultimate Guide to Dropshipping.