Things to Consider When Starting a Work-from-home Business

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According to research by GEM, 69% of US-based entrepreneurs start their business from home. It’s easy to understand why; working from home is free, convenient and some people find that they are more productive working at home than in an office setting. Although running a business from your home office might seem relatively easy, but it isn’t without its challenges.

Naturally, money is a large consideration when starting a work-from-home business. A poll by Wells Fargo-Gallop reveals that 77% of startups rely on personal savings for their initial funds. This a good way to get your business off the ground, however building business credit in the early stages will enable you to reap the benefits of a good credit history.

Furthermore, you need to decide if you are actually going to ‘start a business’ — that is, establish your company as an LLC. Telecommuting or Sole Proprietorship might be more in line with your plans and ambitions, for instance. Either way, there are a number of things to consider, and we’re going to explore a handful of them in this article.

  1. Starting a Business vs Remote Work

  2. Important things to remember when starting your business

  3. Challenges of working from home

  4. Conclusion

Starting a Business vs Remote Work

With so much jargon flying about, the conversation around starting a business can get a little muddied. Remote working (also referred to as telecommuting) isn’t the same as starting a business, for instance. Let’s define the terminology so we’re all on the same page.

Remote working / telecommuting / e-commuting

Telecommuting is a flexible work arrangement whereby the employee works outside of the office setting, usually from home, coffee shops or a coworking space. The individual communicates with their colleagues on the telephone or online via email or a collaboration tool like Slack (hence the term telecommuting).

The key word here is ‘employee’. A remote worker isn’t self-employed or a business owner; they work for an organization. If you want to work remotely from home while benefiting from being an employee in a business, telecommuting might be the option for you.

Because working remotely from home is becoming increasingly popular, there are lots of remote working jobs out there. You’ll find them on sites like and Working Nomads.

Sole proprietorship

Typically, sole proprietorship is for freelancers. It is a business run by one person and is relatively simple to set up. The downside is that a sole proprietor is legally responsible for all of the business’s debts and it can be difficult to get investment because there’s no legal structure that promises repayment if the business fails.


A partnership is similar to sole proprietorship in many ways but involves two people instead of one. Partners share ownership, invest equally and share the profits (or losses) of the business. Again, partners are fully liable if something goes wrong with the business.

Limited Liability Company (LLC)

An LLC is the most common form of business entity and, as the name suggests, owners are not held personally responsible should any financial faults occur. Owners’ personal property is well-protected (as long as certain guidelines are adhered to) because the business is seen as a separate entity.

A few months or years down the line when the business grows and becomes more established, you might decide to ‘incorporate’ it.  

Important things to remember when starting your business

Once you’ve officially registered your business as an LLC, if that’s what you decide to do, there are a few important ‘next steps’ to consider, and should be outlined in your business plan. The last three can apply to sole proprietors too.

Get a business license

After you’ve registered your company, the next step is to get your hands on a business license. Essentially, this is a permit that enables you to run your business in a certain location and is issued by a government agency.

There are two types: federal and local. The one you opt for will depend on the type of business your running and the activities you plan on carrying out, so it’s important to do your research to find out which license you’ll need.

Establish business credit

Establishing business credit that is separate from your personal credit history is an important step for new businesses. In order to do this, your business has to be registered as an LLC or corporation. There are a number of steps involved in getting business credit.

A few include: obtaining a federal tax identification number, having a corporate address and phone number, opening a business bank account and getting a business credit card.

Build a reputation

Establishing a relationship with your customers from the beginning is important of you are to grow your business and attract the best talent as you do so. Cultivating a good reputation takes time, but there are some things you can do at the start to aid the process.

Integrity is key: keeping promises and admitting mistakes will go some way to securing credibility. Building a reputable online presence can also help — getting happy customers to leave positive reviews, etc. But it’s also important to remember that your business has to look credible from the outside too.

What brings us on nicely to our next point…

Virtual office membership

When you sign up for a virtual office, you’ll get a legitimate business (and mailing) address and phone number that you can put on your website, business cards and all other marketing collateral.

This is much better than using your residential address from both in terms of marketing and security. What’s more, it will instantly make your business seem more credible.

Challenges of working from home

Choosing to work from home online can pose certain challenges. Without coworkers around you, motivation — or lack of — can become an issue. Another pitfall is the lack of a meeting place. Yes, there’s always the local coffee shop, but that isn’t exactly ideal. Especially if you need privacy.

That’s where a virtual office membership comes in handy. You don’t just get an address that helps you to build credibility etc. More often than not, you’ll also have the option to hire meeting rooms by the hour and even hot desk in the space every now and again.

Virtual offices are also pretty useful when it comes to managing a remote workforce. Although technology has made it easier to lead a geographically disparate team, nothing can replace the value to face-to-face interaction. With a virtual office, you can schedule physical meetups with your team and conduct training.


We do hope that you’ve got a clearer idea of what you need to consider when starting a work-from-home business and are better equipped to make some of those important decisions. There are a number of jobs that you can do from anywhere, so whether you decide to go down the telecommuter route or start your own business, you will be joining the millions of people around the world who work from home every day.

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