Entrepreneurs are now running their business from their home.
Data by U.S. Small Business Administration, 50% of all small businesses are home-based. This translates to approximately 19 million businesses currently running from the comfort of their owners’ home.
But there is a catch.
Unprofessional home-based business owners continue to make their business look less professional than they should. They will need to do more to convince their customers and business partners that they are a “real” business.
And this perceived lack of authenticity can ultimately cost them a sale.
The good news is that legitimizing your home-based business is much easier than many people think. There are a few simple steps that every home business can take to look as professional as a commercial business office in a downtown high-rise.
Quick Sneak Peek: Essential Steps to Legitimize Your Home-Based Business
- Why Legitimacy Matters for Home Businesses
- Setting Up a Professional Business Address
- Getting the Right Licenses and Permits
- Building Trust With Customers
- Creating a Professional Online Presence
Why Legitimacy Matters for Home Businesses
Consumers are wary. If they can’t tell that they’re dealing with a professional business, they will need to see some proof. Most people will want to know that they are spending their money with a real, trustworthy business.
Here is the reality…
Recent studies indicate that 81% of consumers believe that trust is extremely important when deciding whether or not to use a business. Without legitimacy, attracting those first customers is an uphill struggle.
The issue doesn’t just stop with customers, either. Banks, suppliers, partners, and more, all want to know that they’re dealing with a legitimate business. This professionalism opens doors that remain closed to fly-by-night operations.
Setting Up a Professional Business Address
This is the place where most home businesses fail.
Displaying your home address on a business card and your business website will raise more than a few eyebrows. Customers will question whether they’re dealing with a side hustle or a legitimate company.
If that’s not enough to convince you, consider that putting your home address on a business card and website exposes your privacy. You are also putting your personal information at risk.
The answer? Business address.
Online PO Box service provides home businesses with a professional mailing address. They allow for business operations without the financial commitments that renting office space would entail. Services like a PO Box online create a real street address that looks great on everything from business cards to invoices.
Let’s consider this:
- The use of a professional address will help your customers to see that you own a business instead of your house number.
- Privacy is better protected because your home address is kept private and secure.
- Mail can be scanned and sent forward to your home address or an email inbox.
- You’ll give your business the impression that it has been around for some time, making it more trustworthy.
A professional business address is one of the first things that separates real businesses from hobbyists in the eyes of customers.
Getting the Right Licenses and Permits
A legitimate business requires the right paperwork.
Business requirements differ depending on the state, business type, and industry. A few general rules and guidelines apply to everyone, though. The following are the key documents that every business should have.
- A business license issued by the local city or county.
- State registration of the business name.
- An EIN (Employer Identification Number) from the IRS.
- Home occupation permit where local zoning laws may require.
Skipping the steps mentioned earlier is a mistake. Running a business without the right permits will result in unwanted fines and legal issues.
Reputation will also be damaged if you are found to be operating outside the law.
The important thing is that most customers and business partners will ask to see copies of your business license, and permits before they do business with you.
It may seem like a chore at the time, but getting the right documentation to legitimize your business is the foundation that everything is built on.
Building Trust With Customers
Trust can’t be rushed. It must be established through consistent professional actions and visible proof of legitimacy.
The best way to do this is as follows:
Get reviews and testimonials. Positive reviews from satisfied clients can do wonders for your business reputation. Collect testimonials from clients, and get them to post reviews on Google, social media, or industry-specific review platforms.
Display your credentials prominently. Licenses, certifications, and professional memberships must be visible on your website and in your marketing materials.
Respond professionally and promptly. Responding to queries and comments is crucial. Fast, professional responses to customers show them that you are a real business.
Create clear policies. Make sure you have return policies, privacy policies, and terms of service clearly available to customers. This signals that your business is a professional organization that takes its responsibilities seriously.
These steps help build a pattern. Customers will start to view the business as a real and reliable company instead of a risky unknown.
Creating a Professional Online Presence
Your website is usually the first impression. This first impression matters.
A professional online presence consists of the following:
- A modern, clean website with contact information clearly displayed.
- Branding that is consistent across all platforms.
- Active social media profiles that engage with followers.
- Professional email addresses that use the business domain.
A Gmail or Yahoo address for business email is a red flag to customers. Setting up a professional email like contact@businessname.com is very low-cost. The small investment returns incredible dividends in terms of credibility and legitimacy.
The business website should also include an About page that clearly states the business story. A contact page that offers more than one method of contacting the business and information about the products or services that the business provides.
Separating Personal and Business Finances
Blending personal and business accounts is a mistake that many home business owners make.
Opening a business bank account makes things easier. It also makes bookkeeping and tax preparation easier and gives the business a simple paper trail if ever audited.
Business bank accounts are often free or low-cost from the banks.
The process of setting one up is far outweighed by the future stress of intermingled finances.
Opening a business credit card can also help to build up the business credit history. This becomes important in the future if the business requires loans or payment terms with suppliers.
Wrapping Things Up
Legitimizing a home-based business is a no-budget operation. All that is required is the basic attention to detail.
To quickly recap the vital steps:
- Set up a professional business address.
- Get the proper licenses and permits.
- Build trust through testimonials and professional communication.
- Create a professional online presence.
- Separate personal and business finances.
These are the steps that lead to a solid foundation. Your customers will see a real business instead of a hobby.
They will not take your business seriously, nor will business partners or suppliers.
You, as a business owner, will feel better at ease knowing that everything is set up properly.
