How To Start A Business At-Home: Guide

2020 was a revolutionary year – individuals and businesses all over the world had to quickly pivot to adjust to living life in isolation. I don’t think anyone could have predicted what the remaining of 2020 would lead to. Although it was scary living life in the unknown, the situation did present an opportunity for all of us to learn how to earn an income from the comfort of their own home.

Fast forward to 2021, many individuals took the tool they learned in 2020 and applied those skills to starting, operating, and eventually thriving in their new business ventures. In this article, I am going to walk through all the resources I used to get my at-home business kick-started in 2021.

During 2021 I ran an in-home bakery with an online website/social media component. In this article I am going to talk about everything I did, from start to finish. Feel free to save this post for future reference as you make progress in your venture. Let’s get started!

TABLE OF CONTENTS:

1. Registering your business

2. Create a website

                a. choosing a hosting platform

                b. buying a domain name

                c. terms and conditions

3. Set up business email account

4. Apply for business license

5. Sign up for business insurance

6. Create social media accounts

7. Create online order form

1. REGISTER / ORGANIZE YOUR BUSINESS

The first step of creating your business at home is incorporating yourself. It really depends on what your end-goal is, but I was in this for the long haul, and I wanted to incorporate my business by filing with the secretary of state. By filing with the state my business name was public, owned by me, and official.

I am based out of California, and there are different requirements based on both the state you operate from and the nature of your business. There are professionals out there you can help you determine which organization type makes the most sense for you at Biz Counsel. I signed up for a subscription with them when I first started and was assigned an attorney to help me determine if I should file for an LLC, S Corp, member managed, etc. I cannot advise you on what business registration type is best for you, however, I highly recommend the services offered at Biz Counsel as they helped me immensely!

I registered my in-home bakery business as a member-managed LLC. Member-managed LLCs are treated the same way as individual’s tax returns are, and basically means that there aren’t any other employees except for you. If you file as an S Corp, you are required to pay payroll expenses and the tax implications are different. Check with your local state authority and confirm with a CPA (certified public accountant) or tax professional.

2A. CREATING YOUR WEBSITE: CHOOSING A HOSTING PLATFORM

I think most businesses these days have websites, and if they don’t, they are missing a HUGE window of opportunity! So many people are searching for products online, more now than ever, so I think that having a website for your business is crucial to your success.

I picked Word Press as my website hosting platform, which is powered by Blue Host. There are so many hosting services available these days, including Square Space, Wix.com, and many others. Similar to registering your business, your hosting platform depends a lot upon what type of website you’d like to create.

In my case, I wanted a blog website for my baking business where my customers could read articles (like this one), watch tutorials, view my photo gallery and also order a cake all in one place. The reason for this is because not only did I want to cater to a local audience with the order form, but I also wanted to be able to reach people that may live farther away and want to try making a cake or trying a new baking technique at home. That’s why I decided to go with the blog/order form hybrid.

I will be completely honest; Word Press takes a lot of learning to get used to. In reality, I think running a website in general is a giant learning curve. My advice is don’t give up! I can guarantee that you will get frustrated, hit a brick wall, feel like you are alone, but you are not. I suggest walking away and coming back to it another time. There are a lot of other people going through the same thing, and there are a lot of resources out there that can help you, including this one. I recommend searching for tutorials on YouTube and online business/blog forums. They have helped me so much and I still continue to learn every single day. I am no where near an expert in managing an online website, but I am so thankful that I took a leap of faith and dedicated time to learning.

2B: CREATING YOUR WEBSITE: BUYING A DOMAIN NAME

One of the first steps in website creation is determining your website name. In most cases, this is the same name as your business to make it easier for your customers to locate you. Sometimes your exact business name is taken, however you can get creative with different ways to maintain your business name in the domain. For example, my business name is Cake by Kelli, and my website domain is www.cakebykelli.com. If this had been taken, I could try adding dashes, commas, periods, etc. to my existing business name and see what’s available. You can search for available domains and pick the one you like the most and claim it.

Another option, which is something that a lot of people do to make money, is buy domain names that they think will be popular and they will offer them for sale later at a higher price. If someone else has purchased your preferred domain name, you can reach out to them and request to purchase it from them for a price. I wouldn’t recommend doing this until you are completely sure you want to stick with this name. in the beginning of your online business journey, I suggest taking an available domain name.

I purchased www.cakebykelli.com from Go Daddy. I realized that the more unique the name, the cheaper it is.

2C. CREATING YOUR WEBSITE: TERMS AND CONDITIONS (DO NOT SKIP THIS!)

No matter what kind of website you have, what you are selling, what state you live in, it is very important to include terms and conditions on your website. These will help protect you from a legal perspective.

There are a lot of terms and conditions websites and resources available to use at your leisure. I used termly.io to generate the T&Cs of this website. I like termly.io a lot because their terms are very extensive, but when you sign up on their site, they ask you fill out a form with tons of information that is specific to your business/website. Once you finish populating the form, termly.io folds your specific business terms into the website’s terms and conditions. That way you know you are covered!

This is important, especially now, because the terms and conditions let people know what is being done with their data when they enter your website. I’m sure you’ve seen data policy settings on numerous websites you’ve entered, asking you to accept the settings or if you want to share your information. The terms and conditions do the same thing, and when it comes to storing personal information and data breaches, this is not an area you want to skip over.

3. APPLY FOR BUSINESS LICENSE

Are you still with me? If so, great! In this section I am going to talk about applying for a business license with your state/county. More specifically, I am going to go into detail about cottage food operations. So if you are running any type of food handling services out of your home, this section is for you! If some of the information doesn’t apply to you, continue to scroll to Section 4.

When you are handling and preparing food for the consumption of others, it is incredibly important to make sure you are well educated. Poor storage, washing, preparing and serving of food items can cause illness and sickness for your customers, which is not only extremely dangerous and scary, but it also creates a huge area of opportunity for a lawsuit.

I’m going to circle back to Section 1, registering your business, and I’m going to jump ahead for a brief moment to the next section, which is on the topic of business insurance. A huge component of registering your business is naming this business as an insured on a liability insurance policy. It is important to understand what you, personally, have a risk of losing in the awful event of a lawsuit. If someone were to sue you/your business, and you didn’t have insurance, what could they go after? Your savings account? Car? House? Other investments? It your business worth this risk? It is not to me, which is why I incorporated as an LLC and set up business insurance under my business name. That way, in the unlikely case of a lawsuit, only my business assets would be at risk and not my personal assets. If you have more specific questions about this, I HIGHLY recommend speaking to an attorney at Biz Counsel.

Okay, back to licensing! CFO stands for Cottage Food Operation, and you usually have to apply through your local county. Luckily my county made this easy, however if you are struggling to find the form on your county’s website there is typically an email address or phone number you can call for assistance.

Once you locate the CFO application form, you may see a few different options for your license: Class A and Class B. Class A means that you will be selling directly to your consumer, whether that be in your home, a commercial kitchen, a pop-up shop, farmer’s market, or even through your own brick and mortar. Class B means that there may be third party intervention when it comes to selling your products. For example, say I sold my cake pops to Starbucks, and then Starbucks sold them to their customers on my behalf. That type of business venture requires a Class B license to operate.

Luckily, if you aren’t sure, you only need to apply for one – meaning all Class A activities fall within the operations of a Class B license. If you think you may work through a third party at some point, I suggest filing for a Class B license. It is a bit more costly, and there are different requirements, so it is truly a judgement call on the trajectory of your business. If you’re leaning toward a Class B license right now, stay with me!

Secondly, you will probably be required to submit a business application to operate in your county. If you completed Section 1, you should have your business information handy, and this part is simple. The application form for my county was only two pages long.

As you complete your CFO license paperwork, you may realize that you are required to show proof of completion of your Serv Safe certification and/or Food handler’s certification. If you ever worked in a restaurant or any type of facility that deals with food, chances are you’ve probably taken either one or both courses. They aren’t free; however, you can write off the course costs as a business expense at the end of the year.

The Serv Safe certification is quick – you can do it in one afternoon. The food handlers’ certification takes a few hours to sit through, there are quizzes/assessments along the way, and there is an exam at the end that requires a certain percentage to pass. Each jurisdiction may have different passing requirements, so please check with your local authority to confirm. Once you pass, you receive a certificate that remains effective for 3 years after your pass date.

Another requirement of the CFO license is CFO approved food labels. If this is a requirement for your county, and its highly likely that it is, your county should include a template of what’s required as part of the application forms. It is important that you list your ingredients, in order of highest quantity used by weight to lowest quantity, how much your item weighs, and any allergy information. As part of your food handler’s course, you will learn about all the different types of food allergies so you will know which ones to list on your sample food labels.  

Finally – a HUGE determinant to selecting Class A versus Class B licensure is that Class B requires a home inspection. This inspection is required once a year by an officially certified food handler in your county. They will inspect storage facilities, refrigerator temps, hot water temps, etc. Basically anything that was learned in the food handler’s certification is fair game. As long as you follow protocol, this step is easier than it sounds. Do not underestimate your inspector, it is always better to be on the safe side and make sure you know the regulations and are following procedures to the tee. I received my inspection approval in March 2021, which is the last step to being granted your CFO license! It was quite an exciting day to say it was all said and done.

4. SIGNING UP FOR BUSINESS INSURANCE

I touched on this topic briefly in Section 3 and I am going to reiterate it again. A huge component of incorporating your business is naming this business as an insured on a business insurance policy. It is important to understand what you, personally, have a risk of losing in the awful event of a lawsuit. If someone were to sue you/your business, and you didn’t have insurance, what could they go after? Your savings account? Car? House? Other investments? It your business worth this risk? It is not to me, which is why I incorporated as an LLC and set up business insurance under my business name. That way, in the unlikely case of a lawsuit, only my business assets would be at risk and not my personal assets. If you have more specific questions about this, I HIGHLY recommend speaking to an attorney at Biz Counsel.

I signed up for my business insurance through Thimble, but there are tons of different insurance providers out there. I recommend doing some price comparisons against different providers, as I’ve also heard great things about Next and State Farm.

When signing up for business insurance, it is important to understand the liability coverage and what’s included. There is no sense in paying for insurance that you don’t understand, or even worse, won’t even cover you for what you need it to. This was another area of my business that I was able to leverage guidance from Biz Counsel. Believe me, when it comes to legal terms, taxes, and insurance, stick with the pros.

5. CREATE A BUSINESS EMAIL ADDRESS

Once you have registered your business and selected your domain name, I suggest creating a separate email account for your business. This will make it easier to track business related requests and paperwork. You can also link this email address as a “contact” button on your social media pages to allow people to contact your business email directly. Another way for you to look professional while staying organized. I use Gmail for my business email.

6. CREATE SOCIAL MEDIA ACCOUNTS

I’m going to say this upfront, 100% of my bakery business came from social media in 2021. It is so important if you are looking for local customers, and even global customers, to have dedicated social media accounts for your business.

I cannot stress this enough, do not use your personal accounts to post your business offerings! Yes, you can promote your business using your personal platforms, but its so much easier for people to understand what your business is and what you offer if there isn’t personal information weeding in between. There is a fine line here, because I do think it’s important to let your personality shine on social media, because ultimately people are buying from you because they trust you and they like you as a person, so I’m not saying to hide anything, just dedicate a separate space for business and personal.

I use Facebook, Instagram and TikTok to promote my business. All three of these platforms serve a different purpose, which I break down for you below:

Facebook: This is for my local community. There are a lot of local Facebook groups with people looking for bakers for birthday parties, baptisms, graduations, anniversaries, and lots of other celebrations. Creating a business page on Facebook has allowed people the option to link my Facebook page when referring me, which has made the transaction easier for my customers, which is the most important part of running an online business! Make it easier for your customers to find you and refer you.  

Instagram: This is my bread and butter. I started my Instagram page at the end of 2020. At the beginning I started to follow people that I knew, and pages that inspired me. Slowly but surely, my friends and family would share my posts on their pages, and the word started to spread. I also use hashtags to help me find my customers, by including my location, offerings, and other hashtags related to my business in my posts. Including your location is a huge factor when people use the search functionality on Instagram. Although Instagram’s algorithms and methodologies are constantly changing, I have continuously found this platform a great way to connect with both my customers and other similar businesses in my industry.

TikTok: This is video-oriented platform, and I do not use this to sell my products, but a lot of businesses do! If you have an Etsy shop or sell products internationally on your website, I see a lot of creators set up TikTok specific discount codes to see how well their business is seen across the platform. I use TikTok to gain new followers and push them over to Instagram, which is where I link my website.

7. CREATE ONLINE ORDER FORM

My last piece of advice for setting up your business at home is to create an easy-to-use order form for your customers. If you elect to use Word Press as your hosting platform like I have, there is an application called Word Press Forms that you can embed into your website as a way to accept orders. I love using WP Forms because it is so easy – you can drag and drop different fields. I’ve also seen other people use Google Forms, which is a fantastic alternative.

Thank you for taking the time to read through my step-by-step tips on how to get started with setting up your in-home business. This was a very high-level overview, but I hope you found it useful and gave you the resources and inspiration to get started on your business today!

Cheers,

Kelli