The Challenges of Starting a Home-Based Business in the Coronavirus Economy

Home-based businesses have been on an upward trend for years, with half of all U.S businesses operating from home in 2020. And now that the coronavirus pandemic has forced brick-and-mortar businesses to close their doors, even more, entrepreneurs are looking to their homes for their next business opportunity.

Running a business from home has a lot of benefits, including low startup costs, money-saving tax deductions, and a nonexistent commute. However, starting a business from home also has its challenges, like these.

5 Home-Based Business Challenges


The first question any aspiring home-based entrepreneur needs to ask is: Is it legal?

Internet-based businesses can typically fly under the radar even in areas where home-based businesses aren’t permitted. However, businesses that require signage or draw traffic risk running afoul of zoning laws or community covenants.

Reviewing the applicable zoning ordinances is a necessary step before opening any home-based business. Even in areas with mixed-use zoning, new businesses may need to acquire a permit or license to operate. In areas where home-based businesses are not allowed, entrepreneurs can file for a variance from the local zoning commission.

Creating a professional image

Running a business from home also makes it harder to maintain professionalism. Whether it’s a living room office or unpredictable work hours, many of the advantages of working from home are drawbacks for customers and clients.

Even while working from home, it’s important that entrepreneurs maintain professionalism at all times. That means establishing separate business quarters and regular working hours. Dedicating time and space to business is not only good for productivity, it also demonstrates that a business takes its work seriously.

Hiring employees

Creating a home office for one is easy enough. But when it comes time to hire employees, many home-based entrepreneurs find themselves shopping for office space.

However, there are alternatives to renting commercial space when scaling a home-based business. Increasingly, businesses are turning to remote employees and freelancers to fulfill staffing needs without sending overhead costs skyrocketing.

Remote employees negate the need for office space, but they’re not without costs. Collaborating effectively with a distributed team requires a suite of tools for communication, project management, file sharing, and more. For truly seamless communication, business owners should research how to use these tools effectively. The chat tool Slack, for example, allows users to create project-specific channels while also curating a newsfeed of information that’s pertinent to all staff. That ensures employees get all the information they need and none they don’t.

Marketing and outreach

Home-based businesses also face a lack of visibility thanks to their under-the-radar locations. However, a lack of a storefront shouldn’t stop home-based entrepreneurs from reaching their audience.

To develop an effective digital marketing strategy, entrepreneurs must first identify their target audience and understand where that audience spends time. By directing marketing dollars to the right platforms, home-based businesses can maximize their digital marketing budget and keep customers engaged.

Navigating the coronavirus pandemic

Finally, today’s home-based entrepreneurs need to consider how the coronavirus pandemic might affect their business. While the pandemic has spurred new opportunities in the home-based business sector, there are also challenges to starting a business in the midst of a global crisis. Not only is consumer spending down, but consumers are changing the way they shop and live both today and into the future.

To ensure longevity, new businesses should consider how they can meet customers’ needs today and create contingency plans for the future. Planning ahead for scenarios like shifting buying habits, sick employees, or an extended pandemic allows small businesses to respond quickly and minimize the impact on their business. Entrepreneurs should also understand the fundamentals of managing revenue and cash flow so they can stay afloat through economic disruptions.

Home-based businesses have huge advantages during the coronavirus pandemic when many brick-and-mortar companies have seen revenue dwindle to nothing. However, starting a home-based business is far from a guaranteed path to success. Like any entrepreneurial venture, starting a business from home comes with its fair share of challenges. The entrepreneurs who find success in the home-based economy will be the ones who plan ahead to overcome them.


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