5 Tips for Starting a Tech Company From Your Own Home
COVID-19 has changed the way people work. Due to the nature of the virus, people can’t gather in large numbers. This can increase the chances of the disease being spread and eventually transmitted. Due to this, many companies have instituted a “work from home” mandate, to ensure the safety of their employees, and that business moves forward with no hiccups. Before COVID-19 hit though, there were already a large number of entrepreneurs who worked from home.
These self-sustaining individuals had already figured out ways to work from home while finding some success with their home-based businesses. Currently, 30 percent of Americans are self-employed, and 50 percent of U.S. businesses are home-based. There are approximately 15 million home-based businesses in the United States. One field which continues to expand in the “work from home” market is tech start-ups. Below are a few tips on how to start a tech company from home.
1. Figure out your talents.
When starting any type of company, you first need to know what you excel at. What do you do well? Without having a good idea of what you can best contribute to potential customers, you might as well stop while you’re ahead. Floundering around with ideas on what you are good at after you’ve created a start-up can lead to many headaches. This can hurt your company over time.
Begin this process by brainstorming what your talents are and discover what you are naturally good at. In terms of your start-up tech company, your talents will become the foundation for a successful business venture. So ask yourself: Are you creative, detailed-oriented, a strong communicator, and persistent? Take the questioning a bit further with your degree choice and how it can assist you with your new startup tech company.
The tech industry has a number of choices when it comes to start-up tech company ideas. These include food tech, web design, extended reality, robotics, customer service management, influencer marketing, content automation, 3D printing, eCommerce, and mobile app development. So examples of home-based businesses might include creating a mobile app that sells slimming pants. or creating a personalized line of robotic toys for children. There are no shortage of fields to jump into when it comes to tech startup ideas
You need an idea of where your talents lie when starting a tech company from home because the tech industry can be a difficult one to break into. Though the United States is the largest tech market in the world, for startups, the landscape is a little unforgiving. According to statistics, as of 2018, the tech startup industry has the highest startup business failure rate which stands at 63 percent.
For this reason alone, you need to make sure that you are good at what you do when it comes to creating a start-up home-based tech company. You don’t want to invest in a home-based business without knowing what you are capable of actually doing.
2. Make a home workspace.
When you’re working from home you need to separate your personal life from work life. This is complicated when it comes to at-home businesses. When you work in an office, the environment is often a bit sterile and not personalized. Work is not the place to feel a personal connection. You go to work to perform a task for an employer, and the look and feel of the environment often come secondary to that.
Your home is a place to get away from everything, while also providing you with a sense of safety and security. This is the place that you go to get away from the daily rigors of work. So when you make the decision to turn your home into your workplace, it’s best to set up a few boundaries, so each place can still exist as its own entity.
After figuring out the best tech-based businesses that you can start from home, begin the process of creating a workspace for your company. First, consider what your work needs are. For instance, will this position require a lot of computer work, hands-on creation of devices, or involve a lot of teleconferencing? Once these questions are answered, then consider what materials and storage space will be necessary for you to tackle your work needs.
Your next step will be to designate a specific work zone. This area is used for nothing but working. First, consider which environment will work best for you. Do you need a spot with no noise or an area where you can hear the afternoon traffic? Figure out what can derail you as you work, and do your best to avoid setting up your workplace in these types of areas.
Lastly, work with supplies and items that you already have. Rather than going out and conducting a huge spending spree on office supplies and items, try to utilize what you already have at your home. If the writing desk that you were using before starting your home-based tech company, keep it. How about that computer monitor that is only a year old? Once again keep it. When you are creating a tech start-up, you don’t want to spend money that you’ll need to save. Until you’re hitting it big like Bill Gates, you can’t afford to waste money that can be saved.
3. Try to figure out what your profits might be.
Your goal is to make a profit with your at-home tech business. Making money is a good thing, and you want to do this as much as possible. Otherwise, you’ll be back at “Random Name Large Tech Company A” sitting at your cubicle, living an existence of being confined to a desk, and making money for someone else.
What you’ll want to do is figure out what kind of profit your business will make. Figure out if your business can be profitable or not. Be honest here, because being anything less than can cause problems later on. This process can involve first figuring out what the best career paths for tech gurus are, in addition to doing research into which of these career paths will bring you the best revenue.
Determine how much people will be willing to pay you for your tech-based product or service, in addition to figuring out if you can make a sufficient income for providing this service. Realize that most businesses need some time to begin generating profits. Give yourself a window of time for this to happen, and also figure out what your minimum monthly income requirements will be per month.
4. Build your legal structure.
As a home-based business since you are a sole proprietorship you often won’t need any formal documentation. Depending on the type of business you run, you will possibly need a Limited Liability Company (LLC) or Sub-S status corporation designation. An LLC is a form of a private limited company. This is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. These can help you as you continue to grow your business over time.
A Sub-S status corporation is a type of corporation which meets specific IRS code requirements. The requirements give a corporation with 100 shareholders or less the benefit of incorporation while being taxed as a partnership. It’s best to speak with a legal consultant on how to best establish your home-based business’s legal structure.
5. Pace yourself.
When you create your at-home business, there’s often a concern that the bottom is going to fall out from underneath you. You become afraid that clients will dry up, and the opportunities will go away. At that point, we begin to push ourselves harder, and harder, to ensure that none of this will happen. When you feel this pressure mounting, take a minute, and pace yourself.
You don’t want to stress yourself to the point where you are nonproductive with working from home. Take a breath. Go for a walk. Eat a snack. But don’t immerse yourself in the work because you feel that to do otherwise you’ll fail.
Do the work that you need to do, but also don’t drive yourself crazy. Following your dreams of being a tech entrepreneur should feel like a blessing and not a burden. Treat it like that, and you’ll be a bit more mentally sound as your business grows.