Home-based businesses offer many advantages to new entrepreneurs. It’s a logical first step into the world of running your own business because it makes it easier to get started.
By taking advantage of your home as your base of operations, you can save yourself some money, time, and frustrations. Once your home business idea is up and running, you can find out if it’s profitable before deciding whether you need additional space.
But home-based businesses also have their own unique challenges. So it’s important to put some thought into choosing the right business idea, creating a business plan, and making sure you understand what you’re getting into.
So let’s look at some examples of great home business ideas, their pros and cons, and how to improve your odds of success.
Benefits of a home-based business
Here are a few of the reasons a home-based business might be right for you.
With a home-based business, there’s less risk for several reasons. For one, there are fewer overhead costs, since you won’t have to rent a workspace. That means your chances for success are increased because you won’t have those overhead costs eating into your profits.
Another way home businesses offer lower risk is by having more flexibility because you won’t get tied into a lease for a workspace or storefront. That means it’s easier to adapt as your needs change. If you realize your business idea isn’t working, you won’t have those additional commitments to worry about.
Any entrepreneurial venture can give you the chance to be your own boss, but having a home-based business offers even more flexibility. For example, it’s ideal for parents or anyone with responsibilities that need tending at home. When your workspace is just a few steps away from whatever household tasks you need to manage, it’s much easier to balance those responsibilities with your business.
You can take care of certain chores while on break, or keep an eye on something while you work. Many of the home-based business ideas in this article also let you completely set your own hours. You can put in some work whenever you’re going to be the most productive, whether it’s at the crack of dawn or the middle of the night. This makes these home business ideas perfect for both “morning birds” and “night owls.”
No travel required
For many people, one of the major advantages of starting a home-based business is it eliminates the need to commute to work. There’s no need to deal with rush hour traffic when you just have to walk to your workspace in your home. The amount of time, money, and frustration that you can save through that simple change shouldn’t be underestimated.
Some studies suggest that, on average, Canadians spend one hour per day commuting to and from work, which adds up to 30 workdays per year. So by not commuting, it will be like you’ve gained an extra month. On top of that, you should also consider the gas money, headaches, and wear and tear on your vehicle that you can avoid.
Drawbacks of a home-based business
Starting a home-based business isn’t without its challenges. Here are some of the potential downsides you should be aware of.
Takes up space
You may need to take up a significant amount of space in your home to accommodate your business, such as for storage or a workspace. So if space is already an issue in your home, you may need to spend some time reorganizing things. If you have lots of clutter in your home, this first step can take a decent amount of time and effort before you can even start on your home business idea.
While working from home provides more flexibility, it also means there’s more likelihood of interruptions and distractions you’ll have to deal with. For example, your family may not be able to help themselves from distracting you when you’re so accessible.
Also, people tend to be less respectful of your work hours when you set them yourself. When people around you know your hours are flexible, they sometimes see that as permission to interrupt or ask for favours during the day, when they never do that if you were working a regular 9-5 job.
Besides the interruptions from family and friends, there are likely many other distractions in your home that you’ll have to avoid. When some of your favourite hobbies are often within arm’s reach, you’ll need a good work ethic and ability to focus.
It can get lonely
Another potential drawback to home-based businesses is there tends to be less interaction with others. So if you’re someone who loves meeting new people or working with a team, that’s something you’ll have to consider.
Even if your home business idea involves employees, you’ll likely be dealing with them remotely, most often only speaking through phone calls and emails. And when it comes to selling your product or service to potential customers, with most home business ideas, you’ll miss out on the benefits of face-to-face interaction.
Choosing the right home business idea
Keeping those pros and cons in mind, you’ll have to decide if a home-based business is right for you. If you do decide to give it a shot, there are many possibilities to consider.
The list of potential home-based business ideas is practically endless, so to find the right one, you’ll need to think about your strengths and weaknesses. But here are some examples of great home-based business ideas that practically anyone can try. We’re going to look at their pros and cons, and what you’ll need to get started.
Example home business ideas
Sell homemade items
Whether it’s crafts, jewelry, clothing, or artwork, there are a lot of options for selling unique handmade items from home. So if you are an artistic type, this may be a good route for your home-based business.
Maybe you already have a hobby that lends itself to creating these types of products, such as knitting, painting, or woodworking. By putting some effort into creating items that’ll sell, you can have a home business up and running in no time.
- Complete control: Making your own products gives you complete control over your business. You don’t have to deal with a manufacturer or supplier when it comes to tweaking your products or ensuring quality.
- The unique factor: Selling items that you produce yourself means you can be the sole source for these unique products. As opposed to going head to head with sellers who offer the same items, you can charge more for your homemade products since they’re unique.
- Production bottleneck: Making homemade products takes time. Even if the time to produce one item is relatively short, it can quickly add up if you start making a lot of sales. If your items sell particularly well, you may need to hire employees to help with production, and that can be difficult if your products are artistic pieces and require special talent to create.
- Competition: Even though you’ll be selling unique items, there is a lot of competition on online marketplaces, where many of your competitors will be offering their own unique items.
- Marketplace fees: The online marketplaces for selling homemade items, charge listing fees and commissions.
How to get started
All you really need to get started is some items you’ve created because there are many places online to sell them. The most obvious are the sites everyone knows, such as eBay and Amazon. They make it easy to set up your own store page and start selling.
However, there are also several online marketplaces that are tailored to selling artistic, homemade, and unique items. The most well-known of these marketplaces is Etsy. While it isn’t quite as well-known as eBay, Etsy is a very popular marketplace for handmade and unique items. And one of its main benefits is its customer base.
The type of people who go searching for items on Etsy are your ideal target audience. That’s because they’ve already decided that they are interested in buying homemade products. Many of them are interested in artistic items, and the idea of owning something unique carries a lot of value with them.
Tips for success
A couple of the downsides to online marketplaces are the fees and the amount of competition. But one way to avoid those disadvantages is to set up your own website and online store, which is easier than you probably think.
There are many options for website builders that can help you easily create a professional-looking website for free. That way, when you draw a potential customer to your site, you can put all their focus on your products and keep your competition out of the picture. And when you make sales, you won’t have to give up a percentage of the profits to a marketplace site.
Sell print-on-demand products
Selling print-on-demand products is another home business idea that is easy to start and doesn’t involve much risk. In a way, it’s similar to selling homemade items because you can make your products unique.
However, one way it differs is it doesn’t require you to produce every item yourself, so there won’t be a bottleneck if you start making lots of sales quickly.
So, how does it work? There are a number of print-on-demand services out there, and they offer a range of products that you can customize with your own designs. Then, when you make a sale, the supplier prints your design on the product and can ship it directly to the customer.
- Sell products with unique prints: It gives you a chance to be creative and create unique products.
- Reduce workload: By outsourcing production of the items to a manufacturer and printing vendor, you don’t have to worry about making items at home, or dealing with shipping.
- No need to hold inventory: Most print-on-demand services provide dropshipping as standard, which means you don’t need to store products yourself, and you’ll never need to worry about wasting production costs on unsold items.
- Products are not totally unique: Unlike when you produce items yourself, print-on-demand products are not one-of-kind. You can make them unique with your designs for the prints; the base products are the same for any seller using that service.
- Giving up control: When you outsource manufacturing, printing, and shipping, you lose some control over the process and have less ability to ensure the quality of every item.
- Reduced profits: Print-on-demand services typically set a base price for each of their products, and that’s what you’ll have to pay them when you make a sale.
How to get started
To get started, you’re going to need to decide what type of products you want to sell, choose a print-on-demand service, and create some designs.
Just some of the products available from print-on-demand services include:
- Shower curtains
- Welcome mats
- Phone cases
- Photo books
- Fridge magnets
- Framed prints
If you know what types of items you want to sell, it can help you in choosing between the different print-on-demand services. Because in many ways, the various services out there are very similar. So one thing that can help you decide is browsing through their sites, taking a look at the types of products that are available and seeing whether they appeal to you.
A few of the most popular print-on-demand services include:
While the various services are very similar, Printify is one that stands out for its flexibility. That’s because it gives you access to a number of printing providers, and you can choose the right one to fit with your needs for products, production times, shipping costs, and more.
Once you have an idea of the types of items you plan to sell and the service you’re going to use, it’s time to create some images or designs. Maybe you already have a great photo you think would sell as wall art, or maybe you have a funny slogan in mind for a T-shirt. This is your chance to get creative and come up with something that will grab people’s attention and drive sales.
Then you can upload your design to the print-on-demand service and start selling. These services even make it easy to create a mock-up image of what the final product will look like. Then you can post those images to your website or online store.
These services can also connect to your store on eBay, Etsy, your website, or other online marketplaces. That means when a customer places an order; it gets sent to the print-on-demand service, where they produce the product and then ship it directly to the customer.
Tips for success
When using a print-on-demand service, it’s a good idea to order a couple of products for yourself to start. This gives you a chance to make sure you’re satisfied with the quality.
Another benefit this offers is the chance to take your own product photos. While most print-on-demand services make it simple to create a mock-up, having your own great product photography is one way to help your products stand out.
For more tips on how to get the most out of a print-on-demand service, check out this guide on how to start a T-shirt printing business.
Become a distributor
If you’re not the artistic type, maybe you don’t want to have to create your own products or designs. Becoming a distributor is one home business idea that may be right for you.
It will let you put more focus on growing your business because you’ll be selling products that have already been designed and produced.
- No need to design: You won’t have to spend time brainstorming design ideas when you’re simply distributing existing products.
- The option to avoid inventory: Drop shipping options allow you to never have to touch a product. That means there’s less of a risk because you don’t need to make an initial investment in inventory.
- Ease of changing your offering: With drop shipping, you can add new products to your store with no additional effort or cost.
- Tight margins: When you’re distributing products that are already available from the manufacturer and other distributors, you will need to keep your prices low or find ways to add value to stay competitive.
- You may end up with inventory: If you want to take advantage of bulk pricing, you will need to store an inventory.
How to get started
One method of becoming a distributor is by starting a drop shipping business. Similar to the print-on-demand services listed above, dropshipping involves selling products that are made by a third party and having them shipped directly to the customer, with no need to hold your own inventory.
You’ll need to shop around to find good deals from suppliers on the products you want to market, create an online store to list those products, and add a markup to the prices to make your profit.
Some popular suppliers you should look into are:
While there are many suppliers out there that also offer drop shipping services, most of them involve fees. But these three sites will allow you to sign up and start using them for free.
Tips for success
At first glance, you might be asking yourself why would anyone buy from your store if the products are available for cheaper directly from the supplier.
But the value you provide is in curating the products and marketing them to customers. That means you can become a go-to supplier just by choosing the right collection of products and getting the right potential customers to see them. There are also other ways you can add value to your store such as providing more detailed information about the products, product reviews, or related tutorials.
As an alternative to drop shipping, you can often get better prices by buying in bulk and storing an inventory.
That’s because many manufacturers and suppliers offer special pricing with a Minimum Order Quantity (MOQ). That means you can offer customers more competitive prices if you are willing to buy in bulk. The downside is it brings more risk because it requires an initial investment, and there’s always a chance you can end up with a large inventory of items that aren’t selling.
Find an audience
We are living in the age of social media influencers, so this list would not be complete without mentioning that one way to earn money online is to attract an audience.
If that sounds a little vague, that’s because there are many options on how to do it. It could range from blogging and podcasting to live streaming yourself playing videogames.
What they all have in common is the goal of attracting an audience that will let you earn money through advertising or affiliate marketing.
- High potential earnings: The top earners make astronomical sums. Eight-year-old Ryan Kaji was YouTube’s highest earner in 2019, making $26 million.
- Stiff competition: This is one way to earn money online that seems so easy and has the potential to be so lucrative that many people are trying it. That makes it harder to get noticed when you’re starting out.
- A risky time investment: It takes some time to find out if you are going to be able to grow an audience. You may have to spend many hours creating content before you discover your business idea isn’t working.
How to get started
Just some examples of the ways you can attract an audience include:
- Starting a Youtube channel
- Posting on social media
- Hosting live streams on platforms such as Twitch
The content can be just about anything, whether it’s purely entertaining or informative. It could range from a comedy podcast to a series of video tutorials on car maintenance. A good place to start is to think about what kinds of content you tend to look for—and keep in mind that focusing on a specific niche can make things easier.
But no matter what topic you choose, to start, you should focus on creating quality content. Since the end goal is to earn money through advertising, you may be tempted to spend a lot of time self-promoting to attract as many eyes as possible. However, if you don’t have quality content to keep people coming back, all of that promotion is wasted.
Once you have some content, then you can start looking at advertising. Platforms like YouTube have built-in advertising, so all you need to do to start earning is select some options about what kind of ads can be shown on your content and how often.
When your content is on a platform without built-in advertising, there are a number of options you can pursue. The simplest is Google Adsense, and it works similarly to the ads on YouTube.
Tips for success
While Google Adsense offers an easy way to get started, there are some other ways to make money from advertising that you should explore.
One of them is affiliate marketing. How it works is you can go to an affiliate network and find the products you think your audience will be interested in. Then you can copy a special link or promo code for that product, which leads to a specific store page and tracks that the visitor came from your site.
Typically, you get paid based on the number of click-throughs and sales it generates. To get started, check out some affiliate marketing networks such as:
Another way to get the most out of advertising is to deal directly with some advertisers instead of only going through Google Adsense. The benefit is you may be able to get higher earnings. The trick is to find companies that fit so well with your focus that they will be eager to advertise to your audience.
To do that, look at which companies are advertising with other creators who have content similar to yours. Single out those companies that look like they would fit well with your content and then contact them. The advertising deals you may be able to land can include posting online ads to your website, reading advertising copy on your podcast, or promoting a product in one of your videos. And the amount you can earn will depend on how large your audience becomes.
More home business ideas
The home business ideas listed above are accessible enough for pretty much anyone to try, without the need for special training or experience. They can give you the chance to launch a business now, and without the need to leave your home.
But if you are still looking for more home business ideas, here are a few more examples to get you thinking. Just keep in mind that many of them do require certain education or experience.
Businesses you can do remotely
- Freelancing websites like Upwork and Fiverr offer many gigs you can do from home
- Web design
- Data entry
- Virtual assistant
- Tutoring (There are a wide range of subjects you can teach remotely, from music and languages to photography)
Businesses where clients can come to you
- Home daycare business
- Pet sitter
- Massage professional
- Dog groomer
- Personal trainer
- Bed and breakfast operator (Airbnb offers an easy way to try it out)
For even more home business ideas, read this guide on how to make money online.
How to make your home business idea profitable
No matter what type of home business idea you plan to pursue, there are some keys to success that may help you. So here are some things to keep in mind as you get started.
Focus on a niche
A niche is a specific part of a market that’s defined by a common interest or demographic. By focusing on a niche, you can avoid some of the competition from large well-established brands, and increase your chance of becoming known as a go-to supplier among that group of consumers. For example, instead of starting a general clothing business, you could focus on offering children’s clothing or athletic wear. For more information on how to identify the right niche, check out this guide on niche market examples.
Look at trends
Whether you plan on creating your own products or curating products from suppliers, it’s useful to know what’s trending. If there’s a topic, current event, or category of product that’s currently in the spotlight (one example right now would be non-medical masks), you can help draw traffic to your online store by promoting products that relate to that trend.
Browse through the sites of your leading competitors and take a look at their current top-selling items, and make a habit of reading the news, so you’re always on top of what’s happening.
Working from home can involve a variety of distractions. One way to minimize that problem is to remove as many distractions as you can from your workspace. Start by choosing a place away from things that you use to relax, such as the couch and the TV.
Then, remove any other items that you might normally use to distract yourself, such as books and magazines. Whenever possible, try to only use your workspace for work. This will help train your brain to focus when you’re in your workspace.
Another way to minimize distractions is to ensure those around you know and respect your work hours. So speak to your family members about your work hours and how you would like their help to avoid getting distracted. If interruptions are coming from friends, don’t forget to use the “busy” status option on your phone/social media.
Take the plunge
Now you should know everything you need to choose an idea, launch your home-based business, and give yourself the best chance for success. With many of the business ideas above, there is no initial investment needed and very little risk. The only real hurdle is to actually start the work to pursue your home business idea. So just go for it!
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.