Home Based Business

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Home Based Business


A home based business, also called an HBB, is a small to medium sized business that is operated from the business owner’s home.

Many entrepreneurs opt to start a home based business and work from home for various reasons such as health problems, to be home with their children, lowering their startup expenses or the flexibility of an open schedule.

Current studies show that 1 in 10 adult Americans are currently operating some sort of home based business either full or part-time. The most popular vessel of home based business opportunities is the internet. Anyone with a computer has access to a virtually unlimited number of customers world-wide. Many entrepreneurs use the internet to promote their own products and services or make money through affiliate programs all from the comfort of there own home.

Types of Home Based Businesses

Most types of home based business will fall into one of two categories, either a traditional home based business or an online home based business. It is possible to have a combination of both an online and traditional home based business but most new entrepreneurs will find it easier to start with either one or the other.

The following section provides some detail on the following types of home based businesses. Which ever home based business type you chose to pursue remember that the core fundamentals and marketing strategies are all the same.

Traditional Home Based Business

A traditional home based business is where the business owner offers their products or services locally and usually requires frequent trips or work outside the home also. Traditional types of home based business can include landscaping companies, consultants, computer repair, interior designers or contractors to name a few.

Running a traditional home based business typically requires a larger amount of start-up cash as the business owner will need supplies and products readily available to perform their services. In some cases, certain home based businesses may also need specific types of vehicles, equipment, licenses or insurance to successfully fulfill their customer’s demands, further increasing their operating expenses

Online Home Based Business

Working from home on the internet is the most popular and least expensive form of home based business opportunity currently available. To start a home based business online all you need is a computer and an internet connection.

The possibilities of creating a profitable online home based business are virtually endless. Some people use the internet as a new alternative for the traditional home based business by offering their products and services online. Other business operators make money selling their ideas or experiences in the form of e-books or written articles. There are also many online entrepreneurs who do not sell anything at all and simply promote others people products for commissions. Studies have even shown that people have made substantial livings online just by asking for donations.

Whatever route you chose to take in starting a home based business online there are still a few common issues you’ll want to address. While the internet is a viable and outstanding source of revenue, it is also a highly competitive and aggressive market to stand out in. Unlike the traditional home based business where you may have a handful of competitors in your field, on the internet you can literally be competing against hundreds of thousands to millions of people in any area.

The key to making money online and building a strong home based business is targeting a niche. Niches are specific areas of a general category. For instance, if you are trying to create an online business that promotes selling t-shirts you’ll find this a very competitive category to do well in. Now if the types of t-shirts you are promoting are all blue, you can now target the niche of “blue t-shirts”.

The success of a niche is determined by how targeted of an audience you can promote a product to while still having an audience to target. Basically if you try to target the niche “used blue t-shirts” and no one is searching for that term on the internet, then you do not have an audience for your niche and furthermore will not have any sales.

Getting Started

So you’ve made the decision to start your own home based business. Working from home can be an exciting and profitable form of self employment when managed correctly. Having a home based business does not exclude the business owner from following the same standards of sound business practices and risk management.

The first thing aspiring entrepreneurs need to do is create a business plan based on the type of home based business they intend to develop and their available finances. Inadequate planning and procrastination are the most common causes of failure when attempting to work from home.

The freedom of working at home can easily persuade you into bending your work schedule. Entrepreneurs need to ensure they have thought about the day to day distractions accompanied with a home based business and how they will deal with them. A common example of this is taking breaks during your work time to run errands. For instance, if you know you will not be working between 5:00pm to 9:00pm to care for your children, then this is the time to do as many non-work related functions as possible. If you need bread, pick it up when you leave to drop the kids off at school rather than in the middle of your work day.

Self-discipline and maintaining a regular schedule is vital to the success and growth of your home based business.

Creating a Business Plan

It is important to seriously consider and research the following topics when developing your home based business. Without a solid business plan your home based business will fail.

You can also find several start-up guides and home based business opportunities to assist you with planning your home based business at Entreprenuer.com.

Finding Your Niche

Finding your niche can be a tedious and time consuming venture if you don’t have and utilize the right tools. To find a profitable niche for your home based business you need to first come up with an idea. The great thing about the internet, with so many users just like you world-wide, is that almost any idea can have enough demand to become a viable income source.

Once you have an idea for your home based business you will need to research the interest of that idea by determining how many internet users are searching for that type of item. To do this you would use what is called a Keyword Suggestion Tool. These types of tools take a word or phrase that you enter and return a list of results showing how often that keyword or phrase is searched for plus additional terms similar to what you entered.

The most important factor in researching and discovering accurate keywords and results is using a quality tool or service for keyword research. There are many free or online Keyword Suggestion Tools that do not use current or even accurate data to compile their results. For extremely targeted and accurate keyword results to build your online home based business you should use a service specifically built and operated for that purpose such as WordTracker Keywords.

Once you have a quality list of keywords you can begin doing your own research to determine the ones you want to market. It is very important to not base this decision on the most commonly searched terms as the competition level will be very high. Begin by selecting 3 or 4 keywords from the list and conducting searches for those terms on the major search engines. Take a careful look at the search results you receive paying particular attention to the following factors.

What is the total number of pages returned for this term? This is the number of websites you will be competing against. While this will typically always be a large number, keeping your keywords targeted to terms with only hundreds of thousands into the low millions of results will be more of a niche than terms that return results in the tens to hundreds of million pages.

How many Pay Per Click (PPC) advertisers are there? The number of PPC advertisers is a good way to judge the overall popularity of a keyword. The more popular or generic the keyword the more advertisers are willing to pay to display ads to those search terms. Finding a search term that has a decent amount of searches a month with little to no PPC advertisers is usually the first indicator that you may have found an undiscovered niche.

Are the top results returned for this term actually targeted to it? Study each of the websites returned on the first page of search results for this term. Determine if these sites are dedicated and targeted to that term or if just a portion of the site is. The ideal situation here is to find keywords where the current top sites are not specifically targeted to the niche of your home based business. By developing a home based business built entirely around these keywords your chances of being viewed as an authority on the subject and getting your site listed on the first page of the search result are much greater.

A very large number of potential internet entrepreneurs become frustrated and eventually give up on their dreams simply because they failed to properly research their markets. The average new internet marketer is not going to create a site about “motorcycles” or “baby strollers” in general and make a living off of it.

By researching alternative keywords and markets pertaining to “motorcycles” or “baby strollers” though and making an informed decision using the factors above plus your own judgment, you can carver out your own niche and develop a profitable and substantial home based business online.

Cash Flow

Do you have enough capital to support the home based business and yourself during startup? It may be beneficial to continue working a full-time job while building your home based business. You can work at home during your free time until your home based business becomes profitable enough to dedicate yourself to it full-time.

Some home based business opportunities may require all of your time and attention right from start-up making holding a full-time job impossible. In these cases, if you do not have the required finances to get your business started, there are still many financing options available to you. Many banking establishments such as Irwin Union Bank offer excellent programs and rates for small and home based businesses.


Does your home based business require a license or special zoning regulations? Take the time to check with your local agencies to determine if your home based business will require either of these. Not having the proper licenses or zoning can be detrimental to a home based business both legally and financially if customers visit your home or damage occurs to the customer’s property.


Would you be covered in the event of an accident or if sued by an unsatisfied customer? Almost all types of traditional home based businesses require some form of insurance or bond.

It is also import to determine if your home owners insurance will cover customers when they are visiting your home office. Most insurance companies do not provide the necessary coverage to operate a home based business in a standard policy.

Not obtaining or upgrading your insurance policies or purchasing Public Risk Insurance can leave you open to severe legal and financial obligations in the event you are charged with negligence.


Did you plan on getting sick? Remember that when you are working for yourself you are also responsible for yourself. A proper amount of your resources should be set aside for providing yourself and your family health insurance.

These private insurance policies can be costly, especially if you need to add dental and optical coverage. Anyone thinking of starting their own home based business needs to thoroughly research available types of insurance, their cost and deductibles.

A great resource for investigating personal health benefits is by using a company like Insure Me which provides you with several quotes from leading insurance companies at no charge.


Was that tank of gas or your home electric bill tax deductible? Running your own home based business requires being accountable for expenses you may have taken for granted or not even thought of when you began planning your business venture.

Make sure to seek the advice of a trained tax professional to determine the proper structure of your home based business and the deductions you will be allowed to claim. It is very important to keep accurate and detailed receipts of items you plan to claim as deductions and to arrange for a skilled accountant to review your tax information at the end of the year.

Promoting your Home Based Business

No matter what type of work at home opportunity you are exploring, whether a traditional home based business or an online home based business, you should follow the same marketing practices. Many new entrepreneurs make the fatal assumption that they can only market an online business online and an offline business offline. This is not correct and these entrepreneurs cut themselves out of a large market of potential customers.

When developing a new home based business in either field you should follow the same marketing practices, displaying a professional and authoritative appearance to all your potential customers.

Branding your Home Based Business

A brand is more than just a snazzy logo. A brand is the identity of your company and its products or services. Brands are just as important for an aspiring entrepreneurs home based business as it for large corporations and conglomerates.

Your brand will be the first impression your visitors receive of your home based business. The better your brand is the greater the customer’s perception of your business and its reputation will be. Just as so many consumers are willing to pay any price for a ‘Prada Handbag’ or a pair of ‘Gucci Shoes’ simply because of the brand, you can also dominate your home based businesses niche through effective branding.

Offline Marketing

Offline Marketing is crucial for all types of home based business even internet businesses. Offline marketing creates a pool of local consumers and the potential promotion of your products and services by word of mouth.

Take the time to purchase or print your own stationary with your brand and website address. Letterheads, envelopes and address labels are effective means of offline marketing. Even the simply mundane task of paying your bills has the potential to spark interest and attract a new customer if mailed in your own branded envelope.

Dispersing business cards is also an effective and profitable form of marketing your business. Many locations in your community such as corner stores, coffee shops and even banks have places for individuals to leave their business cards.

Make use of flyer's and brochures detailing your home based businesses products and services. Distribute these at grocery stores, town hall meetings and other places in your community that have areas set aside for small business operators and individuals to place these types of materials. Most home based business owners over look this simple yet effective marketing technique.

Companies such as Vista Print offer home based business owners a wide range of free products such as 250 free business cards, free logo design, free checks and more. They also have a full line of professional printed materials and business products at greatly discounted rates.

Online Marketing

Having a website and promoting your home based business online is beneficial for even the traditional home based business. By having a website and marketing your products on the internet you not only have the potential of gaining new customers from your local market but have a professional storefront to refer prospective customers to.

Create relevant content for your visitors. The most successful form of online marketing is by writing unique articles relevant to your niche. You can post these articles on your own website and submit altered versions of them to popular e-zines on the internet. Unique and relevant content is the most successful method of driving traffic to your niche.

You can also use services such as Pay Per Post to hire bloggers to write about your website, products or services and publish it to their readers.

Use forums and discussion boards to drive new traffic to your niche. Join forums that are related to your niche and offer informational and supportive posts to its members. You can attract appreciative and targeted visitors while building a sound reputation for your home based business.

Add links to your site in your forum signature but don’t openly try to convince or persuade other members to click on them. If you regularly provide beneficial information to the community, members will view you as an authoritative source and follow the links on their own.

An incorrect form of trying to draw traffic from forums is by spamming. Spamming is posting irrelevant topics full of affiliate links in the hope someone may click on them. This is highly frowned upon and does not entice potential customers or targeted visitors. More often then not it will damage the credibility and reputation of your home based business.

Pay Per Click (PPC) is another popular form of online advertising. This can be beneficial if you are trying to target or advertise to a specific market or product. However if you have properly researched and marketed your niche this form of advertising should not be necessary unless you are trying to expand into additional niches.

Build links to your home based businesses website from other related and well established websites and directories. The first and easiest place to start is by submitting to website directories on the internet. Directories are like the internet Yellow Pages where users can find websites to visit based on category or niche.

Submitting your links and articles to directories and e-zines can be a very time consuming job when done one at a time. Internet Marketing Wish List has developed two products that automate this task, Article Submitter and Directory Submitter, that are available for home based business owners to download and use for free.

Next begin searching for websites that are relative to your niche but are not competitors and ask them to link to you. For instance if your home based business niche is “used blue strollers” and you find a website with a high Page Rank that reviews baby strollers but does not sell any, email them ask them to add a link to your site. The worst they can do is say no or not respond at all but if you have built an informative and professional niche website you may be surprised how open other web developers are to promote it for you.

Successful Home Based Business Opportunities

Currently the most successful online home based business opportunity is the eBay Affiliate Program. eBay’s Senior Affiliate Manager Lily Shen recently reported that several of eBay’s top affiliates make more than $1,000,000 a month for a total of $12,000,000 a year. eBay’s own Affiliate Website reports that the top 50 affiliates make over 1,000,000 dollars a year each.

eBay Affiliates make money by simply promoting eBay through affiliate links with out ever selling products on eBay themselves. eBay offers affiliate up to 75% of their revenue for each item sold plus up to $35.00 US for each new member that joins eBay and makes a bid through your affiliate links.

However, just joining eBay’s free affiliate program and promoting the links they provide you is typically not enough to produce the kind of income stated above. Like all home based businesses you will need to find a niche for promoting eBay.

Many third party developers have designed products just for this purpose. Websites like BansXtreme Niche Store Products offers software that will create a complete and fully customizable online store of any product or products sold on eBay that you can build your niche around.

Software such as this, in combination with the eBay affiliate program, is the best method for creating a profitable home based business. All an aspiring entrepreneur needs to get started is a domain name and hosting account. In today’s internet driven world domain names cost as little as $2.99 a year from Registrars such as GoDaddy and unlimited hosting accounts are as cheap as $7.95 a month through Hostgator Web Hosting.


Creating a profitable and lucrative home based business is the dream of most up and coming entrepreneurs. To successfully build your home based business takes planning and dedication.

No matter what route you choose always be optimistic yet prepared for the worst. Do not fail to recognize and honor the limitations or lack of capabilities you may personally have and stay within those boundaries.

Continued maintenance, promotion and expansion are crucial to the development and longevity of your home based business. Set goals for both yourself personally and the development of your home based business and strive to attain them.