How to start a business from home

Starting a business from home can be a great way to work around family commitments or earn a second income.

Running a business at home can also be a great way to be your own boss and means you can structure your work around your lifestyle.

A home business gives you independence and satisfaction from completing your own work.

You can start small and then grow your business at your own pace and, if things don’t work out, you haven’t incurred many costs, such as leasing office space.

There are a number of home business ideas that could provide satisfaction and additional income without requiring a large investment or start-up costs.

Discover 20 business ideas to start right now.

Why is starting a business from home a good idea?

There are lots of benefits to starting a business from home:

Flexibility

Starting a business from home lets you work your own hours.

You can choose what work you take on and set working hours that best suit you and any family commitments.

You can even rope in family members to help with your business.

Part-time

You can set up a home business as a part-time job alongside your full-time job, so you don’t lose income from being employed, and expand your home business into a full-time job when you wish.

No commute

With no need to travel to a workplace and no dress code, it makes for a better working environment if you don’t thrive in an office environment.

You could also save time and money by not commuting to work.

Positive impact on work-life balance

Running a business from home can improve work-life balance, allowing you to spend more time with family or pursue personal interests alongside your business.

Save money

Starting a business from home can be cheaper than having premises, as you won’t need to pay for rent or utilities.

It’s a good option for many start-ups with limited funds or for those whose initial cash flow is unpredictable.

Tax benefits

You may be eligible for tax deductions on expenses related to your business workspace, such as utilities, internet, and office supplies, reducing overall tax liability.

Scalability

Many home-based businesses can be scaled up without needing additional physical space.

Technology such as digital communication tools and using freelancers and contractors where necessary can help you grow without the overheads of work premises.

What are the disadvantages of starting a business from home?

Like with starting any type of business, there could also be a number of disadvantages to starting a business from home:

Isolation

Working from home can lead to feelings of loneliness and isolation due to the lack of social interaction with colleagues and clients.

Multi-tasking

Starting a business from home means taking on several roles, including home office administration, stock and inventory control, IT support, bookkeeping, and marketing.

Without other staff to help, you’ll be responsible for every aspect of your business.

Distraction

Home environments can be full of distractions, such as household chores, family members, or pets, which could take your attention away from running your new business.

Limited space

A home environment isn’t usually as practical or suitable for working as an office or workshop.

Home-based businesses may face space constraints, particularly if inventory storage or equipment is needed, limiting growth potential.

Before starting a business from home, write a list of all the equipment and space you will need, including storage, to help you decide if your home is suitable.

Negative impact on work-life balance

The lines between work and personal life can blur, making it challenging to switch off and maintain a healthy work-life balance.

Professional image

Operating from home might not project the same level of professionalism as a dedicated office or commercial space, potentially impacting how your customer views you.

How to choose a business to run from home

Choosing the right business to run from home can require careful consideration.

You could start by thinking about your hobbies or passions, as these could be a great foundation for a business that you would enjoy and that keeps you mentally engaged.

You might also want to consider your skills and what you are good at, as leveraging your existing strengths could lead to success.

For example, what jobs have you had in the past?

Did you learn anything from them that you could apply to a new business?

You may also need to think about how a business would fit into your lifestyle, ensuring it can align with your daily routine and personal commitments.

If you have childcare or other responsibilities, for example, you may want to choose a business that offers enough flexibility to accommodate this.

While many businesses can be run from home, some may require more space or resources than others.

Steps to starting a business from home

1. Get the basics right

You have lots of enthusiasm and have written a great business plan.

But no new venture will be successful unless you get the basics right.

You may want to make sure you have a decent computer or laptop (that you don’t share with someone else in the family) and record it as a business expense.

You may also want to invest in a reliable broadband connection and a mobile contract with unlimited minutes so you can talk to customers without worrying about unexpected costs.

Consider obtaining an alternative landline telephone number or buying a dedicated business mobile so family members don’t accidentally answer business calls.

Kitchen table start-up tip: If you don’t want to use your home address for business post, you could set up a PO box with Royal Mail.

2. Think about start-up costs and funding

Consider the funding you need to get your business off the ground and what you might need to pay for in start-up costs.

For example, will you need money for business registration, legal fees, marketing, or product supplies?

Without the right kind of funding, starting, sustaining, and growing a start-up business could be difficult.

Common types of start-up funding can include bank loans, personal savings, and loans from friends and family.

You can also look into government grants as a funding option.

You might also consider applying for a Start Up Loan, which is a personal loan for business purposes for up to £25,000 at a fixed rate of interest.

A Start Up Loan also comes with a year of free business mentoring.

Depending on your source of funding, it could be wise to look into whether there are any limits or rules on what you can use it for.

As always, it’s a good idea to seek independent financial advice to help you decide which type of funding is best for you and your business.

Read our guide to best business funding alternatives.

Kitchen table start-up tip: A mentor can provide crucial support in the initial stages of setting up a new business.

3. Learn to juggle your workload

The ability to prioritise could be considered key when you’re running a business from home.

Parents may have toddlers to care for and teenagers to taxi around, and then there’s the dog who needs to be walked – the day can easily run away if you’re not organised.

Creating a to-do list every morning can help.

Or write it at night and plan for the following day.

You could divide up tasks depending on their priority level and set realistic deadlines.

Try to avoid juggling too many tasks and regularly review your workload so that it doesn’t become overwhelming.

Kitchen table start-up tip: Consider paying for a childminder or carer. The Government’s Tax-Free Childcare scheme could help with costs for eligible parents.

4. Structure your working day

Much of the appeal of setting up a home business is the flexibility to work as and when it suits you.

However, successful entrepreneurs tend to be good at planning their working hours carefully, allocating time to focus on specific, important tasks, and the equally important ‘me time’.

For example, it can be helpful to define the amount of time you’ll spend working at home.

This is especially necessary if you have a regular job as well as family commitments.

Agree on how much time you’ll spend each week and stick to it, ensuring that you stop working when you’ve reached the defined amount.

There are a number of simple concentration tactics that could help you keep your attention on your work.

Consider getting into the habit of concentrating on a project for a couple of hours, then taking a break and moving away from your workspace.

You could water plants outside, make a quick call to a friend, or do a 10-minute workout, and then return to your work refreshed.

Kitchen table start-up tip: Turn off notifications so your work doesn’t get interrupted by social media posts, news updates, or other unnecessary distractions.

5. Set up a dedicated workspace

Regardless of where you decide to run your business – the kitchen table, a spare room, or the garage – consider making sure it’s a dedicated workspace where you won’t be disturbed.

Perching at the end of a breakfast bar while others in your family eat isn’t ideal, and you won’t appear very professional on a Zoom call if kids are playing loudly behind you.

You might want to invest in a comfortable, sturdy office chair to reduce the risk of back or neck pain.

Good lighting can also be crucial – you might want to ensure that your workspace is well-lit.

Also think about allocating yourself a workspace that is secure and away from the noise of the house.

You could even furnish it with office furniture and decor that differentiates it from your living space and creates a productive working environment.

You may want to consider setting up a PO Box rather than using your home address.

Kitchen table start-up tip: When sitting at a table, place your feet flat on the floor. If they don’t reach, use a footrest – a stack of large books would do in a pinch.

6. Choose a business structure

Every new UK business needs to register with HMRC for self-assessment tax purposes and National Insurance.

Part of setting up any business is choosing a business structure, which can affect how and what you pay in taxes, your legal responsibilities, and your personal liability.

You can choose from several business structures with the most popular being sole trader, partnership, or limited company.

Each option has advantages and drawbacks. It’s best to do some research to ensure that the one you choose is right for your business.

Kitchen table start-up tip: Confused about the different types of business you could set up? Read our full guide to start-up business structures.

7. Know your legal responsibilities

You’ll also need to check the financial and legal aspects of starting your particular business from home.

If you plan to run a business from home, you may also need to inform your mortgage provider, landlord, or local council.

Check your home insurance policy, too, as it may not cover stock you keep on the premises. 

If necessary, consider upgrading to a business content cover.

If you plan to have clients come to your house, you may need to perform health and safety evaluations.

Public liability insurance is another must-have if customers will be visiting your home, to cover yourself if one of your clients hurts themselves or breaks something in your home.

If you’re starting a childcare business, you will need to be DBS checked and may have to meet the Ofsted childcare criteria in England, the Care Inspectorate in Scotland, or equivalent bodies in Wales and Northern Ireland.

Learn more about what every new business should know about tax, insurance and the law.

You can also read our guide to self-employed insurance for start-up businesses.

Kitchen table start-up tip: If you’re setting up a new food business from home, you must register with your local authority so an environmental health officer can inspect your premises.

8. Keep on top of finances

Every penny counts when starting out, and your initial cash flow may be unpredictable, so manage your bookkeeping carefully.

If you’re a sole trader, you might consider having two bank accounts to keep business and personal spending separate.

By law, a limited company must have its own business bank account.

If you aren’t a numbers person, you could consider paying an accountant to help with bookkeeping and tax returns.

You would need to do your part in always keeping a detailed record of your incoming and outgoing revenue and saving all of your receipts.

As you would be self-employed, you need to pay the tax you owe each year and may need to pay two types of national insurance contributions – learn more about tax for self-employed people.

Kitchen table start-up tip: It could be wise to build a nest egg before starting a business and remember to put money aside for tax bills such as VAT or Corporation Tax.

9. Know your customers

If you plan to sell products from home, it’s especially crucial to understand what your customer wants.

Talking to people and listening to their feedback, whether it’s your best friend or someone you met at a weekly fitness class, could provide you with valuable customer insights.

Adapting an original idea may prove worthwhile in the long run.

Kitchen table start-up tip: Aim to provide a great (not just good) customer experience, as this may increase your chance of getting recommendations and repeat business.

10. Don’t try to do everything yourself

Although you may set out to run your entire business alone, not every entrepreneur has the necessary skills to be an IT specialist, finance expert, or marketing guru.

You may simply not have the time.

Sometimes, it makes business sense to get additional help with admin tasks so you can concentrate on craft-making or the all-important networking.

Rather than risking burnout, you could seek the services of a virtual assistant.

The Society of Virtual Assistants could help you search for suitable candidates.

Learn more about how a virtual assistant can help you grow your start-up.

Kitchen table start-up tip: If your home is tight on space, consider outsourcing your product storage and order fulfilment. You could also save time by avoiding standing in the Post Office or ParcelShop queues.

11. Find ways to socialise and network

Working alone in your home, day in and day out, could get lonely.

But being a one-person business doesn’t mean you can’t have colleagues and contacts.

You may not be in a communal kitchen chatting about last night’s telly, but you can network and link up with like-minded entrepreneurs online.

Join networking groups and forums and introduce yourself to others on LinkedIn.

You can also find local career events to attend in person on platforms such as Meetup.

Read more about why it’s important to network.

Kitchen table start-up tip: The British Chambers of Commerce, an organisation that connects businesses, can provide additional networking support.

12. Market your business online

Without a shop front to attract customers, marketing, and advertising your home-based business is vital.

Don’t just rely on word of mouth.

Build an effective website, hand out business cards and flyers, and put up posters around your area.

As a start-up, your initial customers will most likely be local, so it’s important to advertise locally.

Learn how to create a website for your business.

13. Understand it’s a learning curve

Even the best-laid plans can go awry, so from the onset, accept that your journey to success may not follow exactly the same route you’ve described in your business plan.

Although situations outside of your control may occur, they could also provide your start-up with new opportunities.

All business ventures have good days and bad, but if you stay motivated and learn as you go along, you’ve every chance of success.

Kitchen table start-up tip: Think about what inspires you, as this can help you stay motivated. For example, read our Dragons’ Den success stories.

Ten businesses you can start from home

1. Childminding

Many parents will pay for someone to look after their children after school while they work or in the evening.

You’ll need to be DBS checked and if looking after children at your home, you’ll need to inform the council, perform health and safety checks, and childproof your home.

2. Selling cosmetics

Selling cosmetics can be a very rewarding and social job with a big focus on networking.

You may not need specialist equipment to sell cosmetics, but you may want to consider storage space to hold your inventory.

You might also need a reliable form of personal transport.

Companies such as MaryKay and Avon offer opportunities to become a beauty representative.

3. Handyman and gardening services

If you have a passion for DIY, or have green fingers, why not consider starting a handyman or gardening business?

People could be willing to hire you for jobs they can’t or don’t want to do, such as assembling furniture, plumbing, cutting down trees, or planting and cultivating a vegetable garden.

To successfully do this job, you may need good quality tools and legal qualifications for gas, construction, and electrical work.

You can do research on sites such as Checkatrade to see other local services and find out what they offer and how much they charge.

4. Dogsitting and boarding

Many dog owners need dog sitting and boarding services while they are at work or on holiday.

If you’re good with dogs and enjoy looking after them, you could offer your services from home – you could soon build up a roster of regular clients as their furry friends get to know you.

You will need a boarding for cats and dogs licence and a DBS check.

Public liability insurance is also highly recommended.

5. Selling homemade products

Selling products, whether jewellery, baked goods, skincare products, or greeting cards, could be a great side hustle to generate extra income from a hobby.

You could sell at fairs, on websites such as Etsy, or approach larger stores that may stock and sell your products for you.

6. Web design

Many businesses need people to design and maintain their business websites.

You may need to invest in a high-spec computer and some type of design and building software, but there are several free website tools you can use, such as Wix and Weebly for websites and Canva for web assets.

Online resources such as Alison.com offer free online courses for web designers, which could help enhance your start-up’s credibility.

7. Tutoring

If you have previous teaching experience or excel in a particular subject and are a good communicator, you could earn money by tutoring children or adults.

You can do this at your home, the customer’s home, or even online via Skype.

Typical areas for tutoring could include music (learning musical instruments), technical subjects such as science, maths, and English, or tutoring for specific exams and qualifications.

Read our guide on how to start a tutoring business.

8. Content writing and proofreading

Many businesses require content and proofreading services for their output and marketing materials.

Being a freelance writer and/or proofreader means you can work from the comfort of your home when you want.

If you’re a creative individual with a talent for research and writing, this could be an ideal home business idea for you.

This option can be especially good if you want an idea that requires low investment costs to get started.

9. PR and marketing

Because of their lack of time and resources, small businesses often outsource tasks like PR or marketing.

This is because it’s cheaper and easier than employing someone to do it or doing it themselves.

You may need previous experience to do work such as PR, but if you have skills from your career to draw on, then consulting in these areas can be very profitable.

10. Hair and beauty services

Hair and beauty services could be another good option for you to run a start-up without the need for external premises.

If you have the skills, you could provide customers with treatments from a dedicated room or area in your home.

You could offer a wide array of beauty services, including hair styling, nail salon services, make-up and spray tanning.