Taking the plunge and starting the home-based business you have been dreaming about can be both exciting and overwhelming! There are decisions, both small and large, to consider before officially opening your business. But once you get your plan down, it will become much easier.

Below, we are going to share our tips for researching your home-based business idea, picking your business structure, implementing your business idea, and more.

Choosing Your Home-based Business

You have always dreamt of opening your own home-based business but what type of business are you going to open and operate? Our first piece of advice is the most important: "It should be something you love, a topic or product you are passionate about." This will make running your business easier to start. If you don't love your business, you will soon grow to dislike it and feel frustrated.

Now that you have figured out what type of home based business you are going to start, you should create your business plan. I cannot tell you how many entrepreneurs I have talked to who did not write down a business plan but now wish they had! It will allow you to plan your long- and short-term goals leading to success. A business plan, even an informal one, is your road map to success. Just as you wouldn't get in your car to take a trip without directions—you won't be able to start and run your business without direction. (See "Financing and Business Plan," below, for more on your business plan.)

Researching Your Home-based Business Idea

Now that you know what type of business you want to start and you have your business plan laid out, you should scope out your competition. Will your business be online, offline, or both? How many like businesses are currently in your area? Is there is a business in your area that is the same as the one you are planning? Don't let the existence of competition discourage you. This is good news! This means people are already interested in your business; there are people looking for your service or product.

Study your competition and take notes. What do you like about their business? What don't you like about their set up? What will you do better? What will make yours different? The key will be to make yours different and better!

What Are the Requirements for Starting Your Home-based Business

You have your business idea and have researched your competition, but now what? The very next thing you should do is contact your county office and find out what are the laws regulating a home-based business. The laws are different in most states and sometimes even differ from county to county within a state.

Most home-based business owners operate as a sole proprietor, the simplest way to do business there is—it involves no more than filing a simple business registration, if that. That is its advantage, but it also comes with disadvantages. Chief among them is a sole proprietor is personally responsible for the debts of the business. If the business fails, the owner is legally obligated to pay the business's creditors.

Depending on the type of business you are starting, this may be good or bad. For instance, if you are going to be making and selling dog treats, this can be a sensitive issue. Should someone sue you for any reason, they will be suing you personally, which means your personal assets are vulnerable. While it may be more costly up front, setting up your business as an LLC (Limited Liability Company) or corporation may be a better option. Should your business get sued, your business is its own entity and incurs its debts separately from you. Creditors can not sue you and garnish your personal assets.

Because a sole proprietorship, a limited liability company, and corporation are only three of many options you might choose, it would be best to consult with an accountant and/or attorney about your plans so they can advise you as to the best business structure for you.

Along with your business structure, you will most likely need a DBA (doing business as) and a tax ID number (allowing you to purchase supplies at wholesale). Again, it will depend on your state's requirements.

Financing and Business Plans

Your business plan should include many factors that will help you sort out what you need to start and keep your business running on a month-to-month basis. Most importantly, when starting out, be conservative, ask yourself if you really need that piece of equipment or do you merely "want" it? Many times, out of excitement, we want things that aren't essential at that moment. Save those purchases for when your business is making money!

Some questions you should have answers to:

• How much money will you need to start your business?
• How long will it be until you break even?
• How much money will it cost to run your business on a monthly basis?
• What supplies and/or equipment do you need to get started?
• Who is your target market?
• How will you reach them?

Next, how will you finance your business start up? Will you use a credit card? Do you have savings set aside that you can use? Will you need a small business loan? These are important questions for you to decide.

Your Business Name & Logo

At this point, we have our idea, we scoped out the competition, picked our business structure, figured out our finances, and now what… Next, it is essential to make sure that the business name you are going to use is not already in use by someone else. You can do a tradename search to make sure it's not already in use. It would not be fun, after you started your business, to receive a cease and desist order enjoining you from using that business name!

Your business name and logo are vital to the success of your business. They should convey what type of service and/or products you offer. For example, the other day I had lunch with a business acquaintance. As we left the restaurant, we saw a tradename on the back of a Ford F150 that said "Mike's Magic." Instantly we both thought children's parties or something of that nature, but it turned it was a cabinetry business! Most people would probably think the same thing: his logo doesn't convey his business very well.

Your business logo and name are how you brand your business so that your customers will recognize and remember who you are. Your logo should be on all correspondence, business cards, and forms that you use for your business.

Online, Offline, or Both

While the business you are starting is intended to be home based, you need to ask yourself whether it will ever go online as well? Most people don't realize how important this question can be in the future.

For instance, let's say you did a tradename search to make sure no one in your county is already using the business name you chose. You start your business and it takes off. You then realize you could reach even more customers online. Only then do you discover someone else owns your business name as their domain name. Now what?

Unless you are completely sure that your business will never be online, you should buy the domain matching your business. Domain names can be bought cheaply. It's a smart investment that allows you to have future options for your business.

In Closing

There are many small and large decisions to consider before starting your business, but you will be glad you took the time to figure them out. After all, you want to spend as much time as you can on making money and being successful!

For ideas and inspiration on starting your home based business visit: MyMommyBiz and Business Owners' Idea Cafe. Both websites have a plethora of articles available to help you decide which home-based business is right for you.