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A home-based business allows you to be self-employed and earn income working where you feel most productive. It offers a work-life balance and gives you complete control of your work schedule. Plus, you don’t need to rent a store or commute to an office space. 

If you’re contemplating starting a home-based business, you’re probably wondering about the right type of business to choose and how to secure funding. This guide has all you need to start making money from your home office.

How to choose the right home-based business

Every business has one intent: problem-solving. Successful businesses are born out of a need to solve the problems of a specific audience.

For instance, a mechanic fixes your car because they have the technical expertise — and that’s why you pay them. 

In the same way, the kind of business you choose must offer a real solution to your audience’s needs. 

Here’s how to choose the right home-based business idea:

Determine your unique strengths

Before starting your home-based business, identify your strengths. These include your natural talents (e.g., public speaking) or a skill (e.g., digital marketing) you’ve mastered.

By identifying your strengths, you can start a small business you’re passionate about, which ultimately increases efficiency and productivity.

What are your unique strengths?

Here are some questions to help you identify your strengths:

  1. What skills do people frequently compliment you on? 
  2. What subject in school or activity outside school did you excel in?
  3. What ability comes naturally to you?
  4. What topic do friends and family frequently seek your advice on?
  5. If you had to teach a class, what would you be able to talk confidently about?

The answers to these questions will guide your decision-making process, helping you choose the most suitable home-based business to start.

Identify a problem you can solve

For your business to be relevant and profitable, it must solve a problem. Introspect deeply on challenges you have solved in workplaces or even your own home.

For example, have you created systems enabling you to accomplish complex tasks faster? Or have you developed tips and tricks to keep a busy household running smoothly? 

Virtually any annoyance solved presents potential business value. To generate a new business idea, you can also identify an underserved market and develop innovative solutions to meet specific needs.

Find existing solutions you could improve

Consider existing solutions such as services, apps, tools and products across different industries. Can you enhance them by making them more affordable, convenient or efficient?

How to find existing solutions to improve.

Don’t underestimate small tweaks, as these can improve product quality and set you apart from the competition. 

Now that you know how to generate a new business idea, let’s dive into some of the best business models to bring your ideas to life. 

Profitable business models in 2024

There are various business models to choose from if you want to start a home-based business. Your ultimate choice depends on your skills, resources and goals.

Let’s consider some of the most profitable business models in 2024. 

Digital product creation

Selling digital products is a cost-effective way to start a home-based business, as long as you offer high-demand products to the right people.

This business model involves using search engine optimization (SEO) and social media ads to drive traffic to your website where you sell digital products.

Here are examples of digital products you can sell:

  • Ebooks. 
  • Apps and software. 
  • Online courses.
  • Fonts.
  • Graphic design templates.
  • Artworks.
  • Themes and plugins. 
  • Stock photography.

Freelance services

If you’ve mastered an in-demand skill, consider building a freelancing career on platforms like Upwork, Fiverr and With freelancing, you can work for multiple clients, which increases your profit potential.

Screenshot of the Fiverr homepage.

Here’s how to become a freelancer: 

  • Choose a niche expertise like graphic design, bookkeeping and web development, or become a freelance writer and editor. 
  • Create an account on your preferred freelance marketplace.
  • Browse open job listings by clients detailing needs and budgets.
  • Apply for jobs that interest you.
  • Communicate clearly about expectations, such as deadlines and your rate.

Most freelance marketplaces allow you to create gigs to show off your expertise and provide buyers with all the details they need about your services. Once you’ve set up your gigs, you can start getting orders without bidding.


The dropshipping business model involves choosing a profitable niche and selling high-demand products that meet the needs of your audience.

This business model does not require you to hold any inventory, so you can start selling products from home with little to no money.

To start a dropshipping business, set up your online store, find reliable suppliers, add products to your store and market them to your target audience. Once you receive an order, you forward the details to your supplier, who ships the product to the buyer — and you make your profit.

Here are some profitable items to sell as a dropshipper:

  • Trending products. 
  • Custom apparel. 
  • Supplements. 
  • Beauty products. 
  • Pet toys. 
  • Household tools. 


There’s no shortage of things to sell online, from electronics and gadgets to handmade products and artwork. If you’re a skilled craftsperson, consider selling your own creations such as jewelry, artwork and prints.

Compared to brick-and-mortar stores, eCommerce businesses have minimum overhead costs — you don’t need to worry about rent and other expenses associated with a traditional retail business.

Don’t forget about sales tax, though. Each state has different sales tax laws. Read and understand the laws in your state to ensure compliance while running your eCommerce business.

Example of Etsy product ideas from the search “handmade jewelry”.

Affiliate marketing

Affiliate marketing is a business model where you promote a company’s offerings and earn a commission on each sale generated from your marketing efforts. Typically, you receive a unique link that tracks your sales — resulting in a paycheck.

Companies put their products on affiliate networks like ClickBank and MaxBounty to gain more visibility. As an affiliate, your goal is to help your chosen company make a sale, and driving traffic to the company’s landing page is a key part of this process. 

The best part? You can partner with as many companies as possible, earning commission on each sale you generate. 

How to start a home-based business

Starting a home-based business begins with choosing an online business model. You must decide whether to sell products, offer freelance services or join an affiliate program.

Here’s a step-by-step guide to help you launch a successful small business from your home office:

1. Choose your niche

A niche is a small market segment with its demographics, interests and challenges. Choosing your niche allows you to create targeted marketing campaigns that appeal to your audience.

It also enables you to understand the preferences of your ideal buyers so you can tailor your offerings accordingly. This saves the time and money you’d have spent trying to appeal to everyone.

For instance, hosting cooking classes is a lucrative business idea. But it may be difficult to satisfy the many different audiences in this market. That’s why you need a clearly defined niche. 

By narrowing your audience to mothers of teenagers, you can identify clear pain points: teenagers are often picky eaters, which can be frustrating. Once you choose your niche, you can tailor your offerings to your audience’s needs.

How to choose your niche.

To define your niche, first identify products or industries you’re passionate about. Then, carve out a small section of the market you want to focus on. Once that’s done, it’s time to conduct market research. 

2. Analyze the market

Market research validates your new business idea by ascertaining whether there’s a sizable market for the products or services you want to sell.

If research data suggests low demand or no real need for your offerings, consider revising your niche or product plans at this stage.

With a free research tool like Google Keyword Planner, you can estimate search volumes around your niche keywords. High numbers indicate that people are actively seeking related offerings.

Screenshot of Google Keyword Planner’s website.

Browse online marketplaces like Etsy or Amazon using those same keywords to evaluate competition levels. If countless sellers are already flooding product category pages, it may be challenging for your new business to stand out. 

Competitive analysis also allows price benchmarking so you can gauge how much consumers can conveniently pay for your offerings. Avoid simply matching prices. Instead, focus on differentiating your brand and providing value to your customers.

To gain insights into your ideal buyers, scan relevant Facebook groups and Reddit communities. Check member counts and recent conversation volumes — higher numbers point to engaged audiences, representing your target customers.

3. Choose a business structure

To obtain your employer identification number (EIN) for the IRS, you need to choose a business structure. Available options include sole proprietorship, partnership, limited liability company (LLC) and a corporation. 

Consult a tax professional if you need help choosing the right structure for your new business. 

Your understanding of legal, accounting and tax nuances ensures eligibility for tax deductions or programs offered by the Small Business Administration (SBA)

A sole proprietorship usually suffices for most home-based businesses because it requires minimal costs and paperwork. However, formally establishing your business entity as an LLC or corporation further protects your personal assets as the business scales.

Different business structures and their purposes.

And if you’ve got partners from the start, you’ll want to draft partnership agreements detailing financial splits and decision-making hierarchy upfront. 

4. Name your business and acquire proper documentation

After choosing an optimal structure, it’s time to make your business legal. Sole proprietors can instantly operate using their chosen business names without special documentation, whereas corporations and LLCs require state-level filing.

Choose a business name that is distinctive and catchy. Search state registries to confirm your desired business name is available for use. You also want to be consistent across all sales and marketing channels, so ensure your preferred business name is available as a domain name and a social media handle.

Also, research location-specific business licenses and permits that may be necessary to operate lawfully. Requirements vary widely across states, counties and municipalities — consult checklists guiding registration steps for home-based ventures in your area.

5. Craft a business plan

After nailing down legalities, it’s time to write a detailed business plan. This document outlines your corporate goals, financial projections and overall strategies. 

Here are key sections to include when drafting a business plan:

  • Business overview: Brief description of key offerings, target customers and your competitive advantage.
  • Financial projections: Estimates of your startup costs, operating expenses and target profit margins. 
  • Marketing summary: Description of your main promotional strategies and channels to reach your target customers. 
  • Future goals: Business objectives you want to achieve within a specified timeframe.

While your business plan may evolve over time, upfront planning supports organized decision-making. 

For instance, you may pivot from Facebook to TikTok ads because the latter results in higher conversion rates. Your business plan is a living document and must reflect these changes. 

6. Open a business bank account

A business (or corporate) bank account lets you track income and expenses. It also ensures proper tax preparations, which can mitigate legal liability risks in case of debts or lawsuits.

Opening a business bank account establishes a helpful credit history, which comes in handy when applying for a loan. Overall, a business bank account makes your business appear more professional to potential buyers and partners, making it easier to build trust once you start your home-based business.

7. Create your website

A business website is your digital storefront where you showcase your offerings and establish your online presence. 

While you can sell products on eCommerce marketplaces and social media pages, your website gives you full control over every aspect of your online business. 

It lets you showcase your values and brand personality to create emotional connections with your audience and drive conversions.

Creating a business website involves six primary steps:

  • Choose your domain name and web host.
  • Install WordPress
  • Customize your website’s appearance with WordPress themes. 
  • Install an eCommerce plugin like WooComemece. 
  • Set up your online store. 
  • Add products to your store.

With Bluehost’s user-friendly website builder, you can design a visually appealing website, even if you’re a beginner. Use consistent branding elements (e.g., logo, colors, fonts and imagery) throughout your website. 

Follow the newest graphic design trends and choose color schemes that “speak” to your target demographic. For example, an outdoorsy home-based business might use earthy tones, while a fashion brand might use monochromatic color schemes.

8. Market your business

Promotion gets the word out about your business. There are generally four ways to market your business: search engine optimization, social media marketing, paid advertising and word-of-mouth referrals. 

Search engine optimization

SEO is the process of generating organic traffic by increasing your website’s ranking in search engine results pages (SERPS). 

Conduct in-depth research to discover relevant keywords your ideal customers are actively searching for. Incorporate these keywords into your content to increase your visibility and be found by the right people. 

Social media marketing

Popular social networks like TikTok, Instagram, X (formerly Twitter) and Facebook boast billions of monthly active users. Because these platforms have a broad reach, you can organically grow your brand online by creating high-quality content that resonates with your audience. 

Paid advertising

If your marketing budget allows, explore pay-per-click (PPC) ad platforms like Google Ads and Meta Ads. PPC is a digital marketing strategy where you pay a fee each time a user clicks your ads. It lets you target specific audiences based on demographics, interests and online behavior.

Word-of-mouth referrals

This marketing strategy relies on unpaid recommendations made by satisfied customers. Nothing drives conversion like hearing from those we trust. 

Strive to provide an excellent customer experience, as this encourages buyers to recommend your brand to their friends and family. Also, consider launching referral programs that reward customers who share their experiences with your brand.

The online marketing strategy you choose depends on your business type, goals and budget. For a wider reach, consider using a combination of different strategies instead of limiting yourself to just one. 

Final thoughts: How to start a home-based business in 2024

Starting a home-based business requires extensive planning, research and cross-channel marketing to identify your target audience and solve their unique needs. Whether you want to sell products online or offer freelance services, a business website lets you build your brand’s identity and gain more visibility. 

At Bluehost, we offer reliable WordPress hosting that helps you build a solid foundation for your online business. With our 24/7 customer support, you’ll get expert guidance to successfully launch a secure and fast-loading website that’s optimized for search engines.

Choose a hosting plan to get started.

How to start a home-based business: FAQs

What is the easiest business to start from home?

Freelancing and selling handmade goods are two of the easiest home-based businesses to start. Freelancing leverages high-demand skills you already have, while handmade products allow you to monetize your passion for arts and crafts.

How do I get startup ideas?

Identify underserved markets or unmet needs of a specific audience. Think about problems you’ve solved, and assess your natural talents or a skill you’ve mastered. New business ideas stem from pinpointing gaps between a problem and its potential solutions.

Do I need a website to start a home-based business?

No, but a website adds to your credibility. While you can run a business on social media or online marketplaces, a website gives you full control of your branding and promotional strategies, making it an integral part of running an online business.

Do I need money to start a home-based business?

Online business models like freelancing and dropshipping do not require any startup costs. With a freelance marketplace like Fiverr, you can monetize your skills without any upfront fees. And with dropshipping, you can list products for sale without holding any inventory.

  • Devin Sears

    Devin is a Senior Event Marketing Manager for the Bluehost brand. He is our brand steward for all things Bluehost and WordPress. You'll always see him supporting Bluehost at WordCamps around the world!

    Brigham Young University
    Previous Experience
    Social Media, Customer Experience, Field Marketing, Sponsorships, Event Coordinator
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1 Comment

  1. Authentic ugc Reply

    That’s a really wonderful guide you have provided here. Starting your own home based business can be tricky but with a bunch of tips and tricks, it can be made easier. Thanks.

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