Go-To Guide on Starting a Business From Home

With more Australians looking to start their own small businesses or side hustles while working from home, launching a home-based business is becoming an increasingly popular pathway to entrepreneurship.

January 17, 2024

Learn how to start your own empire right from your own couch.

Recent statistics show that over 60% of small businesses in Australia are now home-based, spanning industries from consulting services to artisanal goods and digital offerings.

The global health crisis has also accelerated growth in the home business space as more individuals embrace location flexibility. At the same time, the rise of digital platforms gives entrepreneurs easy access to customers across Australia and worldwide, right from their living rooms.

Running your own home-based business venture offers alluring benefits like setting your own hours, devoting time to family, and avoiding long commutes to an office. However, working for yourself also comes with major responsibility. Without structure and self-discipline, your business productivity and profitability can quickly slip.

So, in this comprehensive guide to starting a business from home, we’ll cover all the key steps an aspiring founder needs to get up and running successfully.

Starting a Business From Home Step #1 - Find a Business Idea

When starting a home business, one of the most crucial first steps is developing a strong business idea that leverages your background and aligns with Australia's market landscape. Rather than randomly picking a business concept, take time to brainstorm and analyse ideas suited for running from your home office.

Brainstorm Home Business Ideas

What skills, education, or hobbies could translate into an in-demand offering? Make a master list of ideas without self-editing at first. Popular home businesses range widely - from online ventures such as social media consulting to artisanal baking and affiliate marketing.

Could you monetise an existing passion project or side hobby like a photography business or jewellery-making through an online store or local pop-up events? Don't limit yourself to the brainstorming stage.

Research Market Demands

Once you have promising ideas, validate customer demand and gaps in Australia's market. Search online business forums and Facebook groups to see what people need and request. Talk to friends, family members, and neighbours to understand the problems they would pay to solve. Analytics tools can reveal Australia's most lucrative and underserved niches as well, even something as simple as Google Trends.

Choose an Idea

Finally, choose a single business idea that aligns with your background, plays to your strengths, and fills a growing consumer demand. 

Writing a Business Plan

After settling on a promising home business idea, your next major step is crafting a lean yet thorough business plan. While not legally required, mapping out plans in writing lends huge advantages to converting your concept into a sustainable venture.

Documenting details in a plan offers clarity on how exactly you’ll generate sales and revenue. It also projects milestones for setting up, launching, and expanding the business. Revisiting your goals keeps you accountable.

A lean startup-style plan is smart for early-stage home enterprises. Summarise the core elements without getting overly complicated.  You should cover these fundamental components in your streamlined business plan and elaborate later as you grow:

  • Executive Summary: A brief overview of your proposed home business, target customers, and competitive advantage
  • Business Description: Explains your offerings, how you’ll operate, and what problem you solve
  • Market Analysis: Research confirming customer demand and how you’ll market locally
  • Financial Plan: Expected startup costs, and projected sales/revenue based on reasonable assumptions. Remember, our team can help you with our financial advice and consulting services.
  • Targets:  Getting specific with one-year and three-year targets motivates progress. Outline operational milestones like formalising your business structure and building clientele in year one. Then project bigger growth in later years, like expanding your team or product line once established.

Legal Steps for Your Home-Based Business 

Once your business idea is solidified and documented in a plan, you need to take care of key legal and compliance steps before welcoming your first customers. Awareness of regulations, permits, taxes and insurance requirements prevents headaches as you start operating.

Register Your Business

First, formally register your home business. You can apply for an Australian Business Number (ABN) and register a unique business name through the Australian Business Register. Having an ABN and registered name helps identify your business to the government for tax and other purposes.

Also, check if you need additional operating licences or permits based on your location and offerings. For example, a home bakery may require a food handling permit and other business licences.

Understand Legal Considerations

Look into specific laws, regulations and zoning codes for home businesses based on your location. For instance, some suburbs prohibit customer visits or place restrictions on signage. Consider noise levels, parking and traffic if customers will be coming to your home.

Manage Tax Obligations

As a home business owner, you need to comply with tax rules like GST registration, PAYG installments, income tax and super obligations. Consider hiring an accountant, using software or taking a tax course.

Setting Up Your Own Business Office at Home

Invest time in optimising your physical workspace and equipment needs to maintain productivity and professionalism when running your business from home. Evaluate factors like space, storage, lighting and furniture to create an ergonomic, distraction-free office.

Evaluate Your Needs

  • Space: Dedicate a full room or large corner for your setup, rather than just a desk crammed wherever it fits. Close the door to reduce noise.
  • Storage: Incorporate filing cabinets, shelves, bins and organisers to store inventory, documents and supplies.
  • Lighting: Ensure adequate overhead and task lighting. Add lamps or install fixtures. Consider positioning to reduce screen glare.
  • Furniture: Choose an adjustable ergonomic desk and chair suited for extended computer work. Prioritise back support.
  • Equipment: Outline must-have tech like a laptop, second monitor, phone, printer/scanner and strong internet.

Maximise Productivity

  • Create systems for managing tasks, inventory and files so you can work efficiently.
  • Set up tools like videoconferencing, calendars and project boards to collaborate with clients.
  • Eliminate clutter and distractions. 
  • Streamline everything so you can focus on your core work.

Marketing Your Home Business

Gaining visibility and attracting customers locally takes strategic marketing, especially when operating a successful business from home. Build awareness in your community by combining traditional promotions like flyers and partnerships with a strong digital presence.

Market Locally

  • Design professional flyers outlining your offerings, contact information, and value proposition. Post on community boards and hand out at local events.
  • Partner with complementary businesses to cross-promote. A dance studio might partner with a specialty bakery for events.
  • Attend networking events to connect with potential partners, collaborators and customers.
  • Set up booths at markets, fairs and pop-up shops to showcase products, collect email signups and drive sales.

Develop Your Digital Presence

  • Build a one-page website to establish credibility and share your brand story.
  • Produce SEO-optimized content that targets relevant keywords, so local searches drive traffic to your site.
  • Complete and regularly update listings on Google My Business, Facebook and industry directories.
  • Be responsive on social media by posting engaging content and answering comments and queries.
  • Send periodic email newsletters with helpful tips, behind-the-scenes content and special offers.

Managing Time and Growth

When you lack office structure as a home business owner, staying disciplined with your schedule is crucial yet challenging. Set boundaries and systems to maintain steady productivity and progress as you balance operating demands.

Set Regular Hours

Define your standard workday hours and stick to this schedule as much as possible. Block off dedicated time for core tasks without distractions. Avoid working in pyjamas all day. Get ready, like you’re commuting to an office.

Create checklists and procedures for repetitive tasks so you can work efficiently. Schedule meetings and calls during set times as well.

Outsource Where Possible

Bring on a virtual assistant for administrative tasks or an accountant for financing and taxes. Hire experts to handle niche projects in their speciality, like graphic design. This stretches your time for priorities only you can handle.

Revisit and Revise

Re-evaluate your business plan and growth trajectory every six months. Set new targets and benchmarks. Decide if expanding locations, product lines, or team size aligns with demand and your vision. Scale up conservatively to avoid growing too fast. Implementing systems, outsourcing, and reassessing plans will help you manage operations and time despite running a home business full-time. 

Don’t Forget To Claim Working From Home Tax Deductions

When operating your business from a home office, be sure to claim all eligible tax deductions. As a home business owner, you can deduct a portion of occupancy expenses like rent, mortgage interest, council rates, water rates, land taxes, and house insurance premiums.

To calculate the deductible amount, determine the percentage of your home's total floor space used for business activities. For example, if your home office takes up 20% of the total floor area, you can claim 20% of rent costs or mortgage interest paid during the financial year as a deduction.

There are also capital gains tax considerations when you sell a home that you lived in and used for business purposes. For example, the main residence exemption may only apply to the private portion of the home. 

In any case, keeping accurate records is key. Track bills, payments, floor plans, work hours, income and other financial data to substantiate claims and deductions. You should also consider consulting an accountant specialising in home businesses to ensure you maximise returns under Australian tax laws when filing yearly tax returns.

Key Takeaways

  • Before moving forward, validate your business idea by researching consumer demand and local market gaps.
  • Document your plan to clarify direction and targets, even if you won't pitch investors. Outline offerings, marketing and finances (remember to keep your personal and business finances separate). 
  • Comply with legal steps like formally registering your business name and understanding regulations.
  • Create an optimal home workspace with the right lighting, furniture, storage and equipment to be productive.

For personalised guidance on starting your home-based businesses, contact Ashmans Accounting. Their experts can advise you on tailoring a profitable business plan and staying compliant as you scale.


What Kind of Business Can You Start From Home?

Many online and service-based businesses thrive when run from a home office. Common examples include consulting, web design, tutoring, writing services, crafts and handmade goods, social media management, virtual assisting and more.

Leverage skills from your education or career background that translate into freelance or remote offerings. Ensure business activities align with zoning regulations and home insurance policies based on your location.

What is the Easiest Home Business To Start?

Service offerings allowing you to work entirely remotely on a flexible schedule are the simplest when launching a successful home business. Think writing, graphic design, bookkeeping, virtual tutoring, customer service and more skills-based work. Outsource the production of physical products to third parties to avoid managing inventory from your residence.

What Do I Need to Start a Small Business from Home?

You’ll need to formally register your home business, obtain an ABN, have necessary equipment like a computer and printer, build out workspace infrastructure like a desk and storage, create a business plan to guide operations and marketing, understand tax and legal obligations, and leverage available tools for managing finances, projects and clients digitally.

Can I Run a Business From My Home in Australia?

Yes, Australians can legally run businesses from home. Over 60% of small businesses are now home-based. Ensure you register your business name and ABN, comply with regulations and zoning codes based on your suburb, have proper insurance, understand tax requirements, and optimise your home workspace for productivity.