Lending Library

Have you heard of the podcast directory Odeo? Or the transportation data company Traf-O-Data? What about the Detroit Automobile Company? All of these businesses were founded by first-time entrepreneurs, and all of them failed quickly or were adapted into something completely different much later. Odeo was bought out by cofounder Evan Williams, who used the organization to start Twitter. Traf-O-Data was founded by high school students Bill Gates and Paul Allen to improve car-counting for traffic engineers. They took the hardware engineering experience from this company and started Microsoft. Henry Ford founded (and closed) the Detroit Automobile Company before he had success with his namesake corporation.

Starting a business is hard, and starting your first business is the hardest. You need every advantage to find success on your first outing. In this guide, we’ll look at the best practices that first-time business owners use—and the common mistakes they wish they’d avoided.

Basic business planning.

1. Do market research.

Market research is any background information that can “help you identify new business opportunities, avoid failure, secure funding (due to a more robust business plan), make informed business decisions, and ultimately deliver a more satisfying customer experience,” according to our guide on do-it-yourself market research for small businesses.

This research can help you make educated guesses to answer some basic questions: is there an unmet demand in the marketplace? Would consumers pay for your goods or services to fill that demand? And would it be profitable?

Market research sounds complicated and expensive—but it doesn’t have to be. There are 4 primary forms: interviews, surveys, focus groups, and customer observation. Additionally, you can use reliable sources of secondary data, like government databases and trade publications. With fewer than a dozen forms of input, you can get a clear picture of the existing market.

2. Create a business plan.

A business plan is a blueprint for your entire operation. Writing a solid business plan is one of the most important steps in starting your business—it’ll not only be the guiding document for logistics, it’s also essential to gaining loans and investments. All that importance can make a business plan intimidating, especially if you’ve never written one before.

We’ve made an easy, step-by-step guide to creating a business plan that will take you from answering a few simple questions to structuring your formal document. Be sure to read the whole thing, but the sections of your final business plan will be: 

1. Executive Summary
2. Business Overview (what physical resources you currently have)
3. Market Analysis/Industry Analysis 
4. Competitive Analysis (what demand you’re filling)
5. Sales and Marketing Plan
6. Operations and Management Plan (human resources)
7. Financial Plan (capital)

3. Have specific goals.

First-time business owners often fall into the trap of vague goals—or worse, having no goals at all. If your goal is “to make money,” you’ll need to be a lot more specific. How far are you from profitability? Will you close that profitability gap by increasing sales to current customers, growing your business, or utilizing some other strategy? 

When setting goals, make them SMART: Specific, Measurable, Attainable, Relevant, and Timely. Specific and Measurable go together—for example, increasing new clients by 25%. An un-specific goal, in contrast, would be to “increase new clients.” An unmeasurable goal would be to “make a better product.” (Better in what sense?)

Attainable goals can be determined through research. Look at the metrics you want to change, and assess how they’ve performed at your organization and at similar organizations under similar circumstances. 

Relevant and Timely goals are directly related to your organizational mission and deadlines. While setting up an Instagram account might be relevant for a fashion line, it makes less sense for a notary public. Furthermore, that fashion line’s new Instagram account will be more effective if it has clear deadlines—for example, hitting 50,000 followers before debuting the spring collection.

4. Don’t try to be all things to all clients.

A first-time business owner is hungry for customers or clients—and that drive is good. But too much hunger can make you do irrational things, like trying to perform every function for all customers. When a small business owner creates an overly broad selection of products or services in an attempt to appeal to everyone, it creates 2 problems: a marketing problem and an operations problem.

From a perception and marketing perspective, an overly broad focus means no one knows what you actually do. Marketer Jim Joseph describes this problem in Entrepreneur: “We become so vague that no one knows what we are offering and our potential customers turn to other, more specific options.”

Operationally, offering too many products and services means you will not excel at any of them. 

An example of a small business with an overly broad business offering is the local restaurant with a menu the size of a phone book. If pancakes, tacos, lasagna, lobster, and peach cobbler are all available, customers might suspect that none of them are going to be very good. And those restaurants have a funny habit of getting new owners every few months.

5. Have an elevator pitch.

As a small business owner, you’re always on the clock. One of your top priorities is attracting customers and investors. (Although don’t assume that you will get investors—more on that below.) That means you must always have your elevator pitch ready to go.

An “elevator pitch” is a summary of your business plan that could attract someone in a matter of seconds. The name comes from the idea of being in an elevator with someone and having only as long to pitch them as it takes to get to their floor. 

“From a chance encounter with an investor to a curious customer, always be ready to pitch your business,” writes Scott Gerber at Entrepreneur. “State your mission, service, and goals in a clear and concise manner.”

6. Avoid distractions (like other new ventures).

Some small business owners start their first venture with dreams of becoming a serial entrepreneur. But starting a new company before the first one is fully established is a mistake—and a common one.

Jason DeMers made this mistake and learned a lesson the hard way. The founder and CEO of the marketing company AudienceBoom thought he could split his time leading a new startup—only to see that one fail and AudienceBoom falter.

“I learned that a successful venture requires 100% attention, focus, and effort,” he told The Hartford. “Secondary ventures need a full-time manager or else they’ll just distract you and derail your existing efforts if you aren’t careful.”

Legal and financial concerns.

7. Don’t depend on investments.

With the popularity of Shark Tank, every entrepreneur thinks they can score offers for their brilliant idea. The image of the angel investor or venture capitalist looms large in TV and movies, with sharp-suited millionaires always ready to fight each other over a good idea.

But in reality, investor money is hard to come by, especially if you’ve never started a business before. “It’s almost impossible to get investment for your very first startup,” writes entrepreneur and investor Tim Berry.

You should plan for the scenario that your business receives no outside investment. Create a business plan that would work with only your savings and conservative estimates of potential revenue. Bootstrapping, or operating your startup without investors, has advantages too. “That dream you had of building your own business ends when you take on outside startup investors,” writes Berry, explaining that investors become your partners—or even your bosses.

When looking for other forms of funding besides investment, consider business loans, lines of credit, and equipment financing. Lendio can connect small businesses with lenders through one quick, simple application.

8. Keep overhead low.

First-time business owners can sometimes take the mantra “you have to spend money to make money” too seriously. A better mindset might be Jeff Bezos’ famous principle: “it’s always Day 1.” The Amazon founder and CEO wants his organization to run as lean and responsive as a startup on its first day, no matter how big it gets.

When beginning your first business, do everything you can to keep overhead low. Lower operating costs will relieve some of the pressure for you to generate revenue immediately.

One of the most common forms of unnecessary overhead for new small businesses is physical space. If you work remotely, does your business need a physical space? Even food businesses can begin as delivery services provided out of a home or an existing food business, if they’ll rent you time in their kitchen.

9. Choose the right business structure.

There are several common legal setups for small businesses in the US. Typical structures for a first-time business owner are a sole proprietorship or a limited liability company (LLC).

• A sole proprietorship is the most basic and least complicated legal form of a small business. It means a person is conducting business as an individual, and the business will be taxed accordingly. Under this form, a person is personally liable for the business.
• An LLC provides some of the protection of incorporation by separating the liability of the individual person and the business. In addition, the owner can still avoid being taxed as a corporation. LLCs are more administratively complex and must separate personal and business finances.

Personal care

10. Have a support network.

Almost every small business owner attributes their success to a community of supporters. And we don’t mean financial and business support (although that’s important too)—we’re talking emotional and mental support.

A mentor or team of mentors can be an invaluable resource for a first-time small business owner. Preferably, they have gone through the startup process themselves, so they can empathize with your situation and offer insight based on experience.

“The people in your support network can also act as your sounding board if you have new ideas about ways to run your business,” writes Alex Silady at SmartAsset. “If your marketing campaign for your new business fails to capture the attention of the people who are close to you, it probably won’t interest total strangers or potential customers either.”

Develop and maintain your support network the same way you’d develop and maintain any professional relationship. Network your connections to find mentors and approach them about offering informal guidance. Once you find mentors, communicate regularly and express gratitude outside of normal business contact. They shouldn’t only hear from you when you need something.

11. Delegate responsibilities

Entrepreneurs can be control freaks. When you’re starting a small business, it seems to make financial and organizational sense to do everything yourself. Payroll and benefits for staff are huge expenditures. However, overextending yourself and trying to do work outside your expertise will quickly cost you money.

If you have so much workload that you can’t handle it or are even turning away paying gigs, it’s time to staff up. That’s a relatively easy call to make. 

Doing work outside your expertise is a less obvious, but just as costly mistake. Small business owners find themselves wearing many hats: marketer, accountant, IT support staff, etc. One misstep in these areas could cost you big bucks.

Adele Cehrs, founder and CEO of Epic PR Group, writes on Inc.com about trying to be her own legal counsel as a first-time business owner and writing up a contract for a new client. “Many hours and $35,000 worth of work later, I lost that client when he claimed bankruptcy, leaving me $35,000 in arrears,” she says. “After that, I spent the money to make my contracts foolproof— even from myself.”

If you’re not ready for a full-time staffer, use consultants. You’ll see the benefits of improved work product and reduced mistakes. 

12. Stay healthy

As a first-time business owner, you’re willing to sacrifice for success. Perhaps you have romantic notions of late nights and fast food fueling your rise. But neglecting your health can be a trap.

Being physically, mentally, and spiritually healthy should be its own reward. Need more motivation? It makes you a better businessperson too. “One study found that workers who eat a healthful diet are 25% more likely to be more productive than workers who don’t,” according to Mike Kappel at allBusiness, adding that according to the Centers for Disease Control and Prevention (CDC), “23.2% of adults over age 20 reported they had trouble concentrating because of sleep deprivation.”

Do your best to eat right, exercise for 30 minutes a day, and sleep 6–8 hours a night. If you’re consistently sacrificing these practices for your business, remember: you could be hurting yourself in the long run.

Promote mental health as well. Mindfulness practice is increasingly common for entrepreneurs. According to Stephanie Burns for Forbes, mindfulness has been found to be helpful in “reducing anxiety, heightening productivity, and contributing to a greater sense of presence,” all very business-friendly outcomes.

13. Don’t quit your day job.

Another common refrain from first-time business owners: “I wish I hadn’t quit my day job so soon.” Any venture has a chance of failing, especially your first. If you go all-in on a business when it’s just starting out, you may find yourself falling without a safety net just months later.

“But when you have the safety net of income from your job, you can treat entrepreneurship as a learning journey: Even if the venture fails, you’ve still gained valuable skills that can enhance your career,” says Dorie Clark in the Harvard Business Review. Clark also points out that income from your primary job can fund your side hustle. As we mentioned above, you don’t want to be dependent on investors for your first business, so self-funding is a good option.

Remember, success is subjective. Maybe your first business will be moderately successful and set you up for another venture, or maybe it will be a huge success that becomes your whole career. Maybe your business will end, but the lessons you learn will lead to something new. You won’t be alone: every successful business owner had to have a first.

More and more Americans are going into business for themselves as freelancers. In fact, research shows that 35% of workers now freelance. That means about 57 million US workers are either working freelance full-time or as a side gig. The top reasons cited for this choice include:

1. Achieving increased flexibility
2. Being your own boss
3. Working from anywhere
4. Choosing your own projects

“Freelancing is one of the fastest, most affordable, and easiest ways to get started working from home, especially if you offer services in a skill you already excel at,” explains a freelance report from The Balance Small Business. “In some ways, freelance sits in-between entrepreneurship and employment. In freelancing, you're self-employed, but the work is contracted by a business and can be steady and regular like in a job. One of the big benefits of freelancing is that you can usually charge more per hour in your freelance business than employers pay for the same work.”

It should be noted that there are also drawbacks to the freelance life. For starters, it requires you to constantly network and seek out clients. Jobs won’t just flow straight to your desk as they would in a corporate setting. The unpredictable workload can become a boom-and-bust cycle for many freelancers: one month you’ll be pulling all-nighters, while the next month could be nearly devoid of work.

Another drawback of freelance work: it can invade your personal life. You’ll need to be disciplined enough to establish a routine so that you get work done during certain hours and then step away when necessary.

Finding clients and commanding the right pay rates can also be challenging. For this reason, you should assemble a reliable collection of clients before you start running your freelance business as a full-time operation. This way, you can begin to learn the tricks of the trade and establish yourself as a trustworthy freelancer before the pressure really sets in.

This guide will walk you through the essential steps of launching a freelance business and finding success as your own boss. And it all starts with you making the bold decision to take the freelance route.

Determining if Freelancing Is Right for You

1. Are you self-motivated?
2. Can you stay on task, even when no one is watching?
3. Are you good at networking?
4. Are you confident enough to approach potential clients?
5. Are you in a financial situation where you can survive 1–2 months with no pay?
6. Do you enjoy learning about new industries and topics?
7. Are you a good researcher?
8. Are you organized?
9. Can you balance multiple jobs simultaneously?
10. Are you confident enough to send out invoices?
11. Are you tenacious enough to follow up on unpaid invoices?
12. Do you feel that you’re scrappy enough to compete for jobs?
13. Will you still be able to afford healthcare?

Laying the Groundwork

Connected to your professional portfolio should be your profile. This is where you feature many of the elements that would appear on a traditional resume. Highlight your experience, training, certifications, education, and personality. When a client is considering 2 candidates with similar backgrounds, the details in your profile can help move the needle to your side.

Next, you’ll need to decide how you want to connect with clients. Lots of freelancers sign up with freelancing platforms like Fiverr, Upwork, or SimplyHired. The chief advantage of a platform is that it can connect you with a vast array of jobs. Additionally, any good platform will have policies in place that protect you from getting jilted by a non-paying client.

The biggest issue with platforms, however: they take a cut of your earnings, which can range from 5% to 30%. Competition for jobs on these platforms can also affect your billable bottom line: sometimes, so many freelancers bid for work on a platform that the rates plummet to levels you aren’t willing to accept.

If you feel comfortable with the risks of a platform and feel that it’s the best option for your freelance business, take the time to research the available options. Make sure only to build profiles on platforms that have a high standard of quality and help you to meet your business goals.

The other option is to find clients on your own. This takes more effort, but it also offers the chance for a higher reward. Popular methods for finding clients include:

• Attending industry networking events
• Leveraging LinkedIn contacts
• Joining relevant Facebook groups
• Talking to family and friends
• Reaching out to previous employers
• Cold-calling businesses to share ideas

Finally, you’ll need to set your rates. At the onset of your freelance career, you may want to choose a discounted rate that allows you to connect with more clients and build your portfolio. But don’t fall into the trap of becoming a “bargain freelancer.” Your goal should be to increase your rate steadily to match the quality you’re bringing to the table.

If you’re not sure what you should be charging, talk to other freelancers to get an idea of standard rates. You could also check with a relevant professional organization, such as the Editorial Freelancers Association, to get a feel for the rate standards in your industry. Questions like these can also be addressed by a mentor—so take this opportunity to reach out to an experienced freelancer who can guide you through the early stages of your career. If you struggle to think of a possible mentor candidate, reach out to your local SCORE office and ask them for assistance.

Making It Official

First, you’ll want to set up a bank account for your freelance business. Many freelancers choose to do this at their current personal bank, as the process is much easier: your bank will already have your financial information and will draw upon your track record in order to approve your request quickly.

The other option is to find a new bank for your business account. Perhaps there’s a bank you think will align better with your business goals. Or there might be a bank offering a lucrative perk if you create an account with them.

You should also consider where you’ll base your business. Many freelancers work from home, but you might prefer a shared workspace or some other sort of office space. Consider the advantages and disadvantages of all your options before making a decision.

Next up is choosing a legal structure for your business. This isn’t a necessary step, as you probably have the option of reporting your freelance earnings as “miscellaneous income” on your tax returns. But freelance work has a tendency to complicate your taxes, making it harder to ensure you’ve reported everything accurately and made the best decisions for your deductions.

“Of all the decisions you make when starting a business, probably the most important one relating to taxes is the type of legal structure you select for your company,” says a business structure analysis from Entrepreneur. “Not only will this decision have an impact on how much you pay in taxes, but it will affect the amount of paperwork your business is required to do, the personal liability you face, and your ability to raise money.”

If you want to set up your freelance business formally, you have several options. The 3 most popular are sole proprietor, limited liability company (LLC), or S corporation. Let’s take a closer look at these options, as well as a few others that will likely be available to you:

• Sole Proprietorship: With limited paperwork required and a tiny price tag, this is the structure of choice for most freelancers. Sole proprietorships allow you and your business to be the same entity. One key advantage of a sole proprietorship: it offers one of the lowest tax rates available to freelancers. Be aware, however, that this structure offers no liability protection. If your business suffers losses or a client sues you, you’ll be on the hook.

• LLC: This structure doesn’t cost much money to set up, depending on the state in which you register your business, and it provides some major benefits. You can operate an LLC as an individual or bring in additional partners if that fits your business goals. The reason many small business owners choose LLCs is for the liability protection they can provide. Creditors typically find it difficult to go after those who operate with this structure. Possible downsides: you’ll need to acquire an Employer Identification Number (EIN) before applying, and the renewal fees and other costs can add up to make it somewhat costly.

• S Corporation: This structure is ideal when you have multiple parties involved and want to share your business’s profits and losses. There is substantial paperwork involved with this structure, so you will need to allocate enough time to complete the application process carefully. Because the finances of an S-corp are intermingled between all individuals involved, it’s not uncommon for accounting errors to occur. In fact, the IRS often reviews these types of businesses more closely because of the likelihood of mistakes.

• Partnership: While the paperwork is light for this business structure, you should protect yourself by drafting a written agreement that can be signed by all parties involved. Lay out details such as who will share what responsibilities and how profits and losses will be distributed. This structure offers no liability protection—and it can actually present even more risk than a sole proprietorship because you might become partially responsible for liabilities brought on by one of your partners. For this reason, you should choose who you bring into your partnership very carefully.

• C Corporation: If you want ironclad protection from debts and losses incurred by your business, you should consider this structure. As far as the law is concerned, a corporation is completely separate from the individual (or partners) who form it. This is one of the most complex and time-consuming structures to choose for your freelance business. The paperwork can be intense, and you’ll need an EIN. Additionally, you will need to hold meetings, elect officers, and carry out other formal proceedings if there are partners involved.

Figuring Out Your Financing

You’ll have numerous options when it comes to raising money for your freelance business. Perhaps you’ll want to start by approaching family and friends for a loan. For more robust financing, you should consider one of the following small business loans:

• Business term loans
• Short term loans
• Business lines of credit
• Merchant cash advances
• Accounts receivable financing
• Business credit cards
• Startup loans
• SBA loans
• Equipment financing

Start by searching the federal grants listed on Grants.gov. Competition will be fierce, but some of these grants can provide a real boost if you qualify. There are also grants available in the private sector. Possible sources include the Halstead Grant, the Amber Grant, the Idea Cafe Grant, and the National Association for the Self-Employed (NASE).

Simplify Your Life With Digital Tools

Any time you can hand off a task to a digital tool, you’ll reclaim precious time in your day, empowering you in more ways than one.

“Is the saying ‘Time is money’ true?” asks a business report from the SBA. “If your business runs out of money, you always have the opportunity to get more. More money is ‘simply a sale away.’ ...Yes, poor time management can cost you and your business tremendous amounts of money. Realize, however, that the better you manage your time, the more money you can earn.”

There’s an ever-increasing list of digital tools that can help freelancers. Let’s look at a handful of the most popular choices:

• Slack: Helps you manage projects and communicate with partners and clients.
• Quip: Allows you to track business goals and your progress on projects.
• 17hats: Combines contracts, invoices, project management, and other tools into a convenient hub.
• Mailchimp: Simplifies your email efforts and helps you track results on the back end.
• Hootsuite: Makes it easier to use all your social media channels at the same time.
• Marketo: Empowers your marketing efforts by merging your digital, mobile, email, and social initiatives into one place.
• QuickBooks: Lets you create expense reports and then track them throughout the process.

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When you think of a business, what comes to mind? An office, cubicles, computers, raw materials, machines, inventory, etc.?

While these elements play a role in every company, they are not the most critical asset: the single most important part of any business is its staff. Employees are the fuel that drives your company forward—without dedicated employees, your business will never thrive. 

You can certainly survive with clock-punchers, but you will never create something truly great. The most successful businesses in the world are the ones that have found the secret ingredient to employee motivation: a shared purpose.

A sense of purpose is an intrinsic yearning to create something larger than ourselves: a big-picture idea and goal. When your employees have a sense of purpose, everyone—even those in the most entry-level positions—is focused on how their job moves the entire company closer to its vision.

Consider what it means to have a sense of purpose and how you can foster one within your team. 

Purpose guides employees through their daily work.

Very few jobs are glamorous all of the time. While the chef in a restaurant gets credit for the food and the bartender can create exciting new drinks, both still do hours of cleaning, prep work, and grunt work. Plus, additional team members like waitstaff, dishwashers, and bussers are all essential to the customer experience, even if they are rarely appreciated.

A shared sense of purpose can guide the entire team, from the head chef to the hostess, which drives up customer satisfaction and growth.

“Purpose can help set a north star not only for the company as a whole, but also for departments, groups, and teams,” Guusje Bendeler writes at thinkPARALLAX. “Informed by the big aspirational north star, setting smaller, more tangible, and achievable goals can help subsets within the company grasp how their work matters to the bigger picture.”

If you have ever struggled to motivate employees or tie their day-to-day work to the benefit of the company, they may have lacked a sense of purpose. Purpose is the “why” that employees answer when doing their work. Why should they care? Why should they do their best? It all ties back to purpose. 

Purpose-driven case study: Kiva.

Several companies deliberately cultivate a sense of purpose—and one brand that goes above and beyond is Kiva, an international nonprofit that strives to bring financial services to those who cannot access them.

Kiva uses its platform to form partnerships with brands like Bobbi Brown, Pure Leaf, and eBay. It facilitates opportunities for companies to instill a sense of purpose within their employees. These large brands donate money in the form of Kiva credits to their customers or employees. Whoever receives the credits can support a cause they care about by funding Kiva borrowers. 

For example, Hewlett-Packard and Kiva launched Matter to a Million, which set aside $7

million to provide each of Hewlett-Packard’s 275,000+ global employees with a $25 credit. 

These credits helped borrowers in 82 different countries and came with a 97% repayment rate. This program improves the global economy while giving HP employees a sense of purpose within their organization. HP employees work hard knowing that the more profitable the company is, the more it will likely contribute to communities in need. 

Anyone can have a sense of purpose.

You don’t need to operate a nonprofit to lead employees with a strong sense of purpose. Every company can encourage team members to take pride in their work. 

One of the most famous examples of employees finding their sense of purpose came from Yale School of Management researcher  Amy Wrzesniewski. She interviewed hospital janitors who found a strong sense of purpose in their work. 

They didn’t see removing trash and mopping floors as “just a job”—instead, they believed it an essential part of supporting patient healing. Not only did the janitorial staff work hard to create a clean and welcoming environment, but they also talked to patients while they did so (even when those patients were in a coma) and changed the art in the hospital rooms frequently. When a patient made a recovery, the janitors took pride in knowing that they contributed. 

It can be easy for employees to feel like their work goes unnoticed or is less important than others’ work, which is why companies need to work hard to communicate and build a shared sense of purpose.

A sense of purpose can help companies improve employee morale and increase customer satisfaction. This shared organization-wide mission creates a motivated and empowered ecosystem that pushes growth and success forward. 

If you can build a shared purpose in your company, you’ll see happier and more productive employees who genuinely enjoy their work. This mindset will not just improve the success of your business—it’ll also help you to retain quality talent and mitigate turnover.

Give your team something to care about, and the results might surprise you.  

What's in a name? More than you might think. As a small business owner, you have complete freedom to choose the title you want: CEO, owner, president, boss, head honcho, accounting ninja—whatever you want. However, names carry meaning, and you want to make sure yours delivers the message you intend.

If you've gone down the rabbit hole of potential titles, you're probably feeling overwhelmed. Does "founder" really capture all that you've done (and still do) for the business? CEO—aren't you more like CEO, CFO, CPO, and every other chief something officer?

To help you find a title that captures who you are and what you do, we've put together a quick guide to entrepreneur titles. Below, we'll walk you through a few potential common titles that might fit you perfectly—then, we'll help you know how to pick one.

Potential names and how to choose one.

Before we take a look at your potential job title options, you need to know what you're looking for. You'll want a name that captures your role and feels right. If CEO feels to corporate-y for you, then forget about—there's plenty of other options.

CEO

CEO, or chief executive officer, is a common title for the man or woman in charge. The title usually has an air of magnitude to it, suggesting leadership over a large, established company. Sometimes, it's too big for a small business owner, but other times it's just right—that's for you to decide. 

Founder

Founder has a startup feel to it—like you built the business from the foundation up. It's gained traction in recent years, but it only works if you actually started the company. If you purchased an existing business and did more of the buying than the founding, this title might not be right for you.

President

President carries a similar weight to CEO, and it also distinguishes itself from a C-suite. If you plan on building an executive team, you'll want to consider the titles your peers might have—or you might just end up with more than one president.

Owner

Owner has a more humble undertone to it. It doesn't convey the same authority as CEO or president, but it clearly denotes who the decision-maker is. If you're an owner of a small business or are a solo entrepreneur, this title could be the one. 

Principal

The title of principal falls right in between owner and CEO on the authoritarian scale. It's more official than owner but less grandiose than CEO—making it perfect if you own a small agency or consulting business that’s trying to look and feel bigger than it actually is. 

General manager

General managers are usually in charge of the entire company or the company's operations. While the general manager isn't always the owner of a business, they are usually the ones responsible for making the big decisions.

If you've looked over all these job titles and none of them feel right—don't panic. You're the boss—you can create your own unique title. 

Own a bar? Become the CBO—chief beverage officer. Run a digital marketing business? Dub yourself the #MediaMaster.

The best part about being a small business owner is you get to call the shots. The world does enough of telling you what you can and can't do—when it comes to choosing your job title, you're the one in control. Have fun, be creative, and pick (or create) a title that perfectly fits you.

Small business owner or entrepreneur?

Small business owner and entrepreneur are often used interchangeably, but the titles don't necessarily mean the same thing. Running your own business doesn't make you an entrepreneur.

Entrepreneurs come up with innovative ideas that carry a high level of risk. Their ventures usually target rapid growth and high returns. Thus, entrepreneurs have the potential to leave a bigger impact on their community and the world—and they also have the potential to epically fail and disappear into the startup void.

Small business owners, on the other hand, tend to focus on proven methods. They're not inventing new products or services—they're just identifying needs in the community and providing the apparent solution. For example, if there's no gas station for miles, then it makes sense for a small business owner to capitalize on the opportunity. Or if the closest pizza joint is in the next town, then a small business owner might want to start one closer to home. Small business owners still operate under a certain level of risk (as all business owners do), but less so than entrepreneurs.

Choose your title and own it.

As Juliet proclaimed: "What's in a name? That which we call a rose by any other name would smell as sweet." 

Regardless of your title, pick one and own it. Yes, a name is important, but don't let the name change you, your business, or your responsibilities. For even if you were called something else, would that change who you are or what you do?

Starting a successful home-based business is the entrepreneurial dream. Home-based businesses let you earn a living from the comfort of your home and eliminate the need for costly office space and lengthy commutes (fun fact: commuters spend, on average, 408 days of their life driving to and from work).

Today’s increasingly connected world makes it possible (and relatively easy) to make money without ever stepping outside. The accelerated growth of remote work is a testament to the fact that high-quality performance and strong business results can be achieved without expensive real estate.

Working from home and being your own boss is no longer a pipedream—it’s a realistic future. If you’re on the fence about whether a home-based business is your cup of tea, here are a few pros and cons to consider:

Pros:

• Fewer overhead costs (office space, transportation, warehouse rentals, etc.)
• Time saved without a commute
• Flexible work-life balance
• Income tax advantages

Cons:

• Harder to separate your business and personal life
• Possible  local government regulation of home-based businesses
• Isolation difficult if you’re more of an extrovert

If you’ve decided the pros outweigh the cons and you’re ready to start your home-based business venture—congratulations! Now, it’s time to figure out what kind of business you’re going to start.

Fortunately, you have endless options. To help get your creative juices flowing, we’ve created a list of practical (and profitable) home-based business ideas. This list may contain your dream occupation, and if that’s the case, our job is done. If not, use these ideas to inspire your own one-of-a-kind business.

8 fantastic home-based freelancing careers.

You can start a freelance business as a full-time career or even a side hustle. The limit to its potential is ultimately how much time you can invest in it. Most freelancing jobs you can do anywhere with a computer and a reliable internet connection, so it’s more of an at-home-and-anywhere-else kind of business. 

However, the one downside to a freelance business is that you’re not quite the boss. Yes, you have ownership of your hours and pricing, but you’re ultimately fulfilling independent contract work for other businesses—who, by default, become your temporary bosses.

Finding freelance work has never been easier. Here are a few of your options:

1. Writing

Blog posts, guides, email campaigns, social posts, ads, website copy, presentations—words, words, words, and somebody’s got to write them all. A freelance writing business has unlimited potential, but you’ll need a deep-deep passion for writing to avoid burnout.

2. Virtual assistant

Entrepreneurs (like yourself) often reach a point when they need a little extra help—and that first hire is often a virtual assistant. Virtual assistants handle all the nitty-gritty details for businesses from a remote location, such as:

3. Social media manager.

If you love creating irresistible social media content that generates likes, shares, and comments, then a career as a social media manager may be right for you. As a social media manager, you’ll manage the social profiles for businesses to share messages, gain followers, and interact with the community.

4. Programming

Full-time programmers are hard to find and expensive to hire, making one-off contracts more enticing to small businesses. Programming demand far exceeds the current supply, and it likely always will. If you know how to code, you’ll have no problem finding freelance gigs as a programmer.

5. Graphic design

Graphic designers create everything from T-shirt designs to UX (user experience) enhancements to advertising illustrations. All you’ll need to snag clients is a few Adobe tools, a decent computer, creative design skills, and a portfolio.

6. Photography

Build a home-based studio to do product shoots, portraits, graduation pictures, engagements, weddings, and more. Once you build your collection, you can start selling prints of your photos on your website or through a marketplace like Society6.

7. Personal Trainer

You can do personal training, yoga instructing, wellness coaching, and nutrition consulting all from the comfort of your home. These businesses will provide you with meaningful work as you help change lives every day.

8. Tutor

People will always need help learning challenging topics, meaning you’ll never be short of clientele. Master a trade or skill, become a pro at teaching it, and voilà—you have a tutoring business. Join popular online tutoring platforms like Chegg and Skooli to get started.

6 subscription box businesses.

Subscription boxes are growing in popularity—and they make for a fantastic business model. Instead of fighting for each sale, you earn each customer on a recurring basis, meaning your marketing and advertising ROI shoots through the roof.

Once, subscription plans were limited to magazines, gym memberships, and SaaS (software-as-a-service) services. Now, subscription boxes have expanded this model to include everything from shaving kits to makeup to meals. Regardless of what kind of business you want to start, there’s a good chance you can turn your passion into a subscription box.

1. Crafting

If crafts are your thing, create a subscription service that delivers art supplies, mystery DIY kits, notebooks, or other creative goodies. For inspiration, look at SketchBox, New Hobby Box, and Darby Smart.

2. Wardrobe stylist

Most people aren’t style savvy, but they’re willing to pay extra for someone to help them shop. Stitch Fix is a great example. You could make your subscription boxes broad (general clothes from head to toe) or niche (glasses, watches, shoes, hats, etc.).

3. Makeup

The beauty and skincare subscription box world is saturated, but that doesn’t mean there’s not room enough for you. To differentiate yourself, you’ll need to dial in a specific aspect of makeup or skincare and become the go-to option for it.

4. Supplements

Athletes, weekend warriors, and even your recreational health enthusiasts all need their supplements, and they need them regularly. Protein powders, vitamins, electrolytes—you name it, they probably take it. And not just once—they need it month after month after month, which makes supplements the perfect subscription box products.

5. Games

Playing games is easy, but finding high-quality games is hard. Those who play board games or video games on a daily basis crave the latest and greatest releases, which is where your subscription box comes in. If you consider yourself a gamer, this niche could be right up your alley.

6. Books

Baby books, romance novels, fiction, and true crime—people need books, and most would rather spend time reading rather than sorting through thousands of endless options. Cater your box to a specific niche to win their trust—and their recurring payments.

4 home cooking business ideas.

Who doesn’t like food? If you enjoy making delectable sweet and savory eats from scratch, then the world is your oyster. To sell food, you’ll need to comply with your state’s licensing and regulations. Once that’s covered, you’re ready to start sharing your love of food and drinks with the masses—right from the comfort of your home.

1. Home Bakery

If baking is your forte, then turn on your oven and start working some magic. You could bake and sell muffins, bread, doughnuts, pastries, cookies, cakes, or other tasty treats. And if you want to find an even more specific niche, create specialized gluten-free or healthy bakes.

You can sell your baked goods direct-to-consumer through a website, at your house, or via your local farmers market. If you want to focus on baking and not selling, consider partnering with a local café or shop to sell the goodies on a recurring plan.

2. Cooking Instructor

Cooking is a skill, and it’s one most Americans don’t have. Fortunately for you, if you have the cooking gene, you can teach others as a career. Choose which models you prefer: online or in-person, one-on-one or group classes, private or public. You could even create a digital home-learning course or start a YouTube channel and grow a healthy following to generate ad revenue (see what we did there?).

3. Specialty Goods

Do you enjoy making specialty items that are harder to come by? You could start a business making and selling jams, preserves, coffee roasts, chocolates, confections, or even honey. These kinds of treats sell well online and at fairs and farmers markets.

4. Catering

If you like making food for the masses (and have the appliances to do so), then catering could be a lucrative business idea. You’ll likely need more than just your own two hands to cater for big events like weddings, funerals, graduations, and other gatherings, but you can hire one-off help or get family members involved.

4 home-based business ideas for animal lovers.

An home-based business can be a dream come true for animal lovers. Not only can you focus your life around animals, but you also get to spend more time with your own furry (or not-so-furry) friends. With human fertility rates falling in the US and more of the rising generation choosing to adopt pets into their family, home-based businesses focused on animals will only see growing demand.

1. Pet Bed-and-Breakfast

Everyone loves their pets, but sometimes they need a travel break—which means they’ll need a fun, safe, and reliable place to leave their special friends. A pet bed-and-breakfast lets you score as many clients a night as your home or facility can handle, helping you scale your business quicker than most hands-on pet services permit. Try to partner with local veterinarians, pet stores, and groomers to create mutual referral relationships.

2. Animal Grooming

Grooming a pet is a lot harder than it sounds, and that’s why some people are willing to just defer the task to an expert. Turn a room in your house into an animal salon and start selling doggy transformations.

3. Pet Training

If you’re a talented dog whisperer, pet training may be your gift. You could do group trainings or one-on-ones to transform unruly young pups into well-mannered and obedient canines. At first, you may just provide the basics, like teaching dogs how to sit, listen, stop barking, or shake. As your skills develop, you could also learn the traits necessary to curb aggressive and dangerous behaviors.

4. Dog Walking

Pet owners are busy, and sometimes they need help making sure their furry friends get the healthy walks they need. As a dog walker, you can take dogs out for a stroll every day of the week. Offer customers a subscription plan so you can reduce the time you spend marketing your business and spend more time walking dogs. You can walk single dogs or a small “pack” from a similar residential area to get more bang for your buck.

8 backyard business ideas.

Your home-based business can extend to the backyard, too. If you like spending time outside, consider running a business from your yard rather than your office. Here are a few backyard business ideas to get you started.

1. Backyard nursery

If you’ve been blessed with a green thumb, put your talent to use and start growing potted plants in your garden (or maybe even build a greenhouse). Some people lack the gift—or the backyard space—so they’re much more likely to buy a plant that already has a head start on life. 

2. Farming

Create the farm (big or small) that you’ve always wanted. You could strictly grow fruits and vegetables, or you could even get a chicken coop or cows, sourcing eggs or milk to local markets or selling them direct-to-consumer. The only limit is your real estate—and your willingness to get your hands a little dirty.

3. Florist

Beyond food, some people just want to buy pretty flowers. Consider what flowers will thrive in your environment and how profitable they are to grow and sell. Flowers might just be a seasonal component of your larger business to supplement income during special holidays like Valentine’s Day and Mother’s Day. 

4. Event rentals

There are a couple of options you can pursue in the world of events. If you have a pretty piece of real estate in a prime location, you may consider leasing it out for parties, weddings, and other events. If you don’t, you could still purchase tables, chairs, music equipment, and other party essentials to store and rent to events going on elsewhere.

5 Goat rentals

Yes, you read that right—goat rentals. You could start a business renting out goats to local property owners who need their lawns mowed. It’s business for you, free food for the goats, and a solution for property owners—everybody wins. Plus, with the recent rise in goat yoga (GOGA), you could also train your lovely grass-eating pets to walk, run, hop, and kiss their way around yoga mats during sessions.

6. Beekeeping

Not everyone is fond of bees, but if you can get past their painful stings, beekeeping could become a fantastic backyard business. Start your bee colony and raise bees for honey production, soapmaking, or other wonderful honey purposes.

7. Furniture upcycling

Shop around at local antique stores, thrift shops, and yard sales to find old furniture that has the potential to be revived. Polish, patch, and upgrade it—then sell the new masterpieces.

8. Car detailing

Start a car detailing business to clean and detail vehicles. You don’t need to be a pro to get started—just begin with what you know. That could be as simple as scrubbing tires, vacuuming the interior, or cleaning up the dash. As you hone your skills and receive the proper training, you can move on to more advanced detailing and protective services—and this opens doors to new services, clients, and vehicles. 

Big ideas take a little bit of cash.

And that’s where we can help. Whether you need to finance a computer, photography equipment, home-office renovations, or marketing campaigns, you have options to make it happen.

Find the perfect loan to launch your home-based business with our handy-dandy application. It’s quick, easy, and free—what more could you ask for? Once you submit your application, we’ll help you find the best loan options from our network of 300+ lenders.

Make your home-business dream a reality. Start your 15-minute application now and get access to cash in as little as 24 hours after approval. Your home-based business is waiting. Don’t let a little cash keep your big ideas from launching.

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Do you dream about starting your own company? Do you create business plans and product lines in your head, wishing for the day when you can quit your job and create something of your own? 

Starting a small business isn’t just a dream that benefits you—it’s a step forward for your community. Small businesses benefit the local economy as a whole, even people who aren’t customers or employees. 

Consider these 6 ways starting a local business helps the economy and why your dream of launching a business could have a positive ripple effect. 

1. You employ local workers.

The coronavirus saw many talented people lose income through furloughs, layoffs, and pay cuts. Experts expect to approach the 25% unemployment rate that we saw during the Great Depression.

By launching your business, you can help mitigate the unemployment levels and provide much-needed financial stability. Moreover, employing others will lessen the dependency on state programs (like unemployment benefits or food stamps), allowing your government to help others.  

2. You create job vacancies in other companies.

Small businesses opening means more people are getting hired across the board, beyond just your company.

3. The money you earn stays in the community.

Consider Uber Eats, which typically takes a 30% fee on most restaurant orders. Part of that money goes toward paying the driver, but most of it goes to Uber’s shareholders. 

However, if a local business hires a few drivers and sets up its own delivery policy, it can provide the same service to customers while keeping 100% of the profits locally.

The money earned by your small business goes back into the community. It is used to support local restaurants, builds up regional farmers, and gets donated to small nonprofits. Your dollar can stretch much further when it is spent locally because it’s compounded across partners, vendors, and employees.  

4. You contribute to local taxes.

State and local tax revenues account for roughly 9% of GDP—so it has a significant effect on your local government’s budget. 

By giving residents an option instead of Amazon or other e-commerce vendors, you can help your local government fund important improvements in your community.

5. You make your city a better place to live.

Small businesses are what make communities interesting. They are what attract people to live there. Your business, along with others in the area, will bring more residents to your town, attract tourists (and the money they spend on vacations), and encourage large-scale job creators to move in. 

6. You help the environment.

According to Mike Scott, a business and sustainability expert, “The shipping industry burns the world’s dirtiest fuel to move cargoes and passengers around the world [and] is one of the biggest contributors to climate change.”

If you can source items locally and customers can buy them from your small business, then you and your customers can both reduce your carbon footprints. You can cut down on emissions to make the environment healthier and the air cleaner.

Everyone benefits from local businesses in your area, from kids enjoying the fresh air in parks provided by tax dollars to your employees who rely on you for a paycheck. Keep these benefits in mind as you begin planning your small business. If you do decide to take the next step and launch a business, consider a small business loan to help you get up and running.

Running a business can make anyone’s stress levels rise. In a Bank of America survey of 1,001 small-business owners, 41% of respondents said managing the business is by far the biggest cause of stress—more so than raising children (9%). 

Money is often the leading cause of stress, and bad habits typically cause money problems for business owners. If you’re feeling stressed and overwhelmed with the financials of your business, consider these 7 habits that could be sabotaging your success. 

1. Cutting costs without considering their impact.

You will find that many business owners make decisions that are “penny rich but cash poor,” meaning they save in the short run but lose money in the long run. In a Planet Money episode, one restaurant owner wanted to add an extra table to his crowded New York restaurant, thinking a new table would bring in more money. The reality was that he needed to take away a table because customers would then feel more comfortable and spend more—raising profits as a whole.

We often think that the best way to increase revenue is to add. Whether that’s adding a new line of products, additional services, or some other investment into the business, we believe that we can fix a money problem by adding more expenses and resources. However, many times we need to practice addition by subtraction.

Learning what to spend and what to cut takes time and an innate understanding of your customers and industry. Make sure your changes will help your employees and customers in the long run, not just your bank statement in the short run.

2. Keeping messy books—or no books at all.

A lot of people avoid going to the doctor for fear of what they might hear. This “don’t ask, don’t tell” mentality is also how many owners feel about their books when business is not going well. As businesses start to lose money, they tend to turn a blind eye to their finances. 

They don’t want the stress of seeing their debts and focus instead on other aspects of the company. However, this practice is like throwing water on an oil fire because your books are one of the best resources for business owners to make better strategic decisions.

Clean and accurate bookkeeping can help you find waste in overscheduled employees, forgotten client invoices, or other ways to cut expenses and increase revenue. If you are in trouble, stay focused and keep your books in order. 

3. Ignoring changes in the market.

You spent weeks and months honing your business model and developing a successful plan before launching. You might have even enjoyed many years of growth and profitability.

However, consumer demand and other market trends can lead to changes in your business, and if you’re not willing to adapt, you’ll struggle. 

Perpetually broke business owners often focus on their company and strategies without investing enough time into external research and analysis. Even worse, these same owners will continue the course regardless of market or consumer changes. 

Would you rather be wrong and profitable or stubborn and broke? 

Successful business owners understand the importance of adaptability. They’re willing to make strategic changes based on feedback, financial trends, and other market factors that indicate a need for it.

4. Starting too many projects at once.

The other side of the pendulum from managers not keeping an eye on the market is the business owner who has a habit of chasing the “next big thing.”

These business owners will start projects before finishing others. They’ll spend time, money, and resources pursuing multiple avenues and projects without truly being able to invest the care and focus needed to do any well. 

While chasing the next trend, they neglect the core competencies of their businesses and miss out on increasing profitability through more efficiency.

Consider how many new ideas and projects you and your team can handle. You will have more success with one carefully-researched and executed project than several half-baked ideas. 

5. Micromanaging team members.

When times get tough, some business owners dig into the daily operations and start to micromanage staff. They believe that the best way to increase profitability is to keep a closer watch over their employees and the minutiae of their businesses. However, this is far from the truth.

Most businesses cannot operate with one person dictating everything. Micromanaging will often drive away your good employees, thus increasing turnover costs. It’s also unrealistic because you’ll create bottlenecks in your operations.

Rather than micromanaging, focus on big picture decisions that have a more significant impact on the success of your business and implement processes that empower and incentivize your employees.  

6. Forgetting to train and grow employees.

A good manager doesn’t just avoid micromanaging—he or she actively works to train employees and make them more responsible and independent. Roughly 85% of employees say that job training is important to them. They believe it improves their job performance and gives them more self-confidence to make decisions. 

Not only will training your employees make them more effective, but it will also keep them around. Employee turnover is a serious issue for many businesses. Employee turnover leads to more stress for your current staff, and it has a direct and profound effect on your bottom line. SHRM suggests that it can cost 6–9 months’ salary on average to replace a salaried employee.

If you’re neglecting training and employee growth opportunities, you should change that habit and begin investing in your staff.

7. Not taking time off.

We get it—running a business is an around-the-clock job. How can you take a break or vacation if you want to turn your business around? Well, you need to take breaks, not just for your sanity, but because it’ll actually make you more productive.

In fact, business owners should take more time off than most employees because of the increased stress that comes with running a business. Experts recommend taking at least a week each quarter (4 weeks of vacation per year) to relax, reboot, and regain your strength to push on when you get back.

Find a balance.

The vast majority of the bad habits on this list have to do with a lack of balance or moderation. Closely managing employees is a good thing until it becomes micromanagement. Adjusting to change is a smart business practice until you take on too many projects at once. By balancing your goals and ambition with realistic expectations and healthy choices, you can avoid becoming a perpetually broke business owner.