A home business puts you in control of where and how you work. Explore the different types of businesses you can run from home and get started today.
Running a business from your home comes with many perks: being your own boss, creating your own schedule, and reducing your daily commute to just the seconds it takes to boot up your computer.
Before you start printing your eggshell business cards with Roman type, you need to decide on what your business will actually do. Will you sell hand-made goods through an online storefront? Run a drop shipping business? Put your graphic design training to good use and become a one-person design studio?
Or, will you do something else entirely?
While the possibilities might be endless, the business idea that you settle on will likely depend on your own interests, goals, and available resources. To help you pick the one that best fits your needs, this article not only includes a list of common home business ideas but also some common considerations for each one. Your next venture could be just around the corner.
Small businesses abound in the United States. In fact, according to a report by the US Small Business Administration, there were an estimated 32.5 million small businesses in the country, accounting for approximately 99.9 percent of all US businesses in 2021 .
While these businesses technically include everything from one-person operations to companies with 500 employees, the sheer number of small businesses in the United States illustrates both the feasibility of starting your own business and the competition that can inevitably develop from such a crowded playing field.
To throw your hat into the ring, you should first decide on the type of business you will run: a home product business or a home service business.
In simplest terms, a product business sells physical products, while service businesses sell services that do something for someone . For example, a grocery store is a product business because it sells physical foodstuffs, such as fruit and vegetables, to customers. A tax accountant, however, is running a service business because they sell their time and expertise to customers looking for help on their tax returns.
Both product businesses and service businesses have advantages and disadvantages. Typically, product businesses require a higher financial investment than service businesses because they need to have a stock of physical goods to sell. However, product businesses are usually much easier to scale than service businesses because they sell manufacturable products rather than the time of individuals with a specialized skill set .
|Product business||Service business|
|Capital investment||High initial investment||Low initial investment|
|Scalability||Easily scalable||Difficult to scale|
You don’t need a brick-and-mortar store to start selling products to customers. Today, the internet makes running a product business from home easier than ever.
The following home based business ideas highlight three distinct ways to sell products online.
Drop shipping is an order fulfillment business model in which a seller acts as a middleman between a customer and a manufacturer. Drop shippers don’t own their own product stock but instead purchase products directly from manufacturers and wholesalers when a customer makes a purchase. The product is then directly shipped to the customer from the manufacturer or wholesaler.
Today, drop shipping is a growing industry worth billions of dollars annually. A report from Research and Markets, for instance, found that the drop shipping industry made an estimated $13.92 billion in 2020, a figure that is projected to grow to $26 billion by 2027 .
Compared to a traditional storefront that maintains a physical inventory of products, drop shipping allows businesses to sell products that they don’t physically stock or technically even own yet. Drops hipping is one way for entrepreneurs to start a product business without investing the capital typically required to purchase stock and store it.
Subscription boxes are boxes containing curated items that customers receive on a regular basis through a subscription. Today, there are subscription boxes offering a monthly stock of everything, including cocktail mixes, gourmet cheese, and patterned socks.
Subscription boxes are a multi-billion dollar industry that spans the globe and is only growing. According to research by McKinsey, the US market for subscription boxes grew from 1.2 billion in 2014 to 7.5 billion in 2018 . A more recent study from consulting firm imarc, meanwhile, found that the “subscription box market reached a value of US$ 18.8 Billion in 2020.” The authors expect the market value for subscription boxes to have a compound annual growth rate (CAGR) of 20.1 percent by 2026 .
Subscription boxes are likely to appeal to entrepreneurs who are knowledgeable and passionate about a specific niche product or market. Subscription boxes can be practical, silly, or anything in between – it’s up to you. Some fun and unique subscription boxes include:
Munch Addict: a subscription box that sends recipients a box of snacks from all around the world.
History by mail: a subscription box that sends reproductions of historic documents to recipients every month.
Book of the Month: a subscriptions service that sends recipients a curated selection of books every month.
Making your own products and selling them online is one of the most common home businesses. The products you sell can be everything from artisanal soaps to handcrafted knives, or anything else you can conceivably make.
The wide reach of the internet has made online storefronts selling handcrafted goods a common enterprise. According to a 2021 study, for instance, the number of active users on Etsy increased from 830,000 in 2012 to 4.3 million in 2020 . In the same span, the number of active Etsy buyers went from 9.32 million in 2012 to 81.9 million in 2020 .
Selling handmade products will likely appeal to entrepreneurs who want to flex their creativity and have the resources required to create and store their own goods. At the same time, it can also be a good option for entrepreneurs who have a pre-existing skill set that is not currently being employed, such as ceramics or knitting.
Service-oriented businesses sell customers the time and energy of a skilled professional in a particular field. Thanks to the internet, it’s never been easier for customers and individual service providers to connect.
The list below includes some of the most common home service businesses operating today.
Tutors help students of all levels learn course material and prepare for important exams, such as the SAT. Students range from elementary school students to graduate students working toward their doctorates.
Today, more and more people are learning online. In 2019, for example, the global online learning market was already worth nearly $200 billion, but by 2026 that number is expected to grow to $375 billion .
Online tutoring is a potentially good business idea for patient individuals who enjoy teaching and working with others. It could also be ideal for college-educated individuals looking for a business opportunity that allows them to work from home with a flexible schedule.
Writing is everywhere – from the blog posts you read online to the manuals that come with your new vacuum cleaner. As a result, freelance writers are in demand in virtually all industries that require some kind of communication.
Writing is a growing field with the potential to make an income above the median in the United States. According to the US Bureau of Labor Statistics, for instance, writers and authors made a median annual salary of $67,120 in 2020 and that number is expected to grow by 9 percent between 2020 and 2030 with an additional 15,400 new job openings each year .
Freelance writing and editing is best suited to individuals who are talented communicators who don’t mind spending time alone. Not all writing assignments are the same. While copywriting requires writers to collaborate with clients and craft compelling copy for marketing purposes, technical writing requires writers to create documents that clearly describe how a reader should use a product. SEO content writers, meanwhile, craft original writing to help draw online search engine users to a specific website.
Businesses use marketing to get the word out about their own products and services. If you have experience in marketing, then why not parlay your skills into your own digital marketing marketing business?
Today, billions of people around the world are online. In fact, one recent study found that as of January 2021, there were an estimated 4.66 billion people online . In response to this massive audience, marketing firms are dedicating more and more of their budget every year to digital marketing compared to traditional marketing methods such as television commercials and print advertisements .
Starting a home-based marketing business could be a good fit for entrepreneurs with a keen understanding of digital marketing. Some of the most common services that digital marketers provide include affiliate marketing, search engine optimization, content creation, and social media management.
A new business venture offers the opportunity for a new beginning. As you are preparing for your next chapter, you might consider taking a flexible online specialization in entrepreneurship offered by the Wharton School at the University of Pennsylvania. Spanning five courses, the specialization is designed to take you from opportunity identification through launch, growth, financing and profitability.
1. US Small Business Administration. “2021 Small Business Profile, https://cdn.advocacy.sba.gov/wp-content/uploads/2021/08/30144808/2021-Small-Business-Profiles-For-The-States.pdf.” Accessed March 2, 2022.
2. US Chamber of Commerce. “Understanding the Difference Between Product Businesses vs. Service Businesses, https://www.uschamber.com/co/grow/sales/differences-in-selling-products-and-services.” Accessed March 2, 2022.
3. Forbes. “As A Potential Entrepreneur, Should You Start A Product Based Or A Service Based Business? Here Are Pros And Cons Of Each, https://www.forbes.com/sites/bernhardschroeder/2020/01/09/as-a-potential-entrepreneur-should-you-start-a-product-based-or-a-service-based-business-here-are-pros-and-cons-of-each.” Accessed March 2, 2022.
4. Research and Markets. “Dropshipping Market Research Report by Product Type, by Organization Size, by State - United States Forecast to 2027 - Cumulative Impact of COVID-19 , https://www.researchandmarkets.com/reports/5455705/dropshipping-market-research-report-by-product.” Accessed March 2, 2022.
5. Fuel by McKinsey. “Sizing Up The Subscription E-Commerce Market: 2018 Update, https://get.fuelbymckinsey.com/article/sizing-up-the-subscription-e-commerce-market/.” Accessed March 2, 2022.
6. Imarc. “Subscription Box Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021-2026, https://www.imarcgroup.com/subscription-box-market.” Accessed March 2, 2022.
7. Statista. “Number of active Etsy sellers from 2012 to 2020, https://www.statista.com/statistics/409374/etsy-active-sellers/.” Accessed March 2, 2022.
8. Statista. “Number of active Etsy buyers from 2012 to 2020, https://www.statista.com/statistics/409375/etsy-active-buyers/.” Accessed March 2, 2022.
9. ThinkImpact. “Online Learning Market Size, https://www.thinkimpact.com/online-learning-market-size.” Accessed March 3, 2022.
10. BLS. “Writers and Authors, https://www.bls.gov/ooh/media-and-communication/writers-and-authors.htm#tab-1.” Accessed March 3, 2022.
11. Statista. “Global Digital Population as of January 2021, https://www.statista.com/statistics/617136/digital-population-worldwide/.” Accessed March 3, 2022.
12. Statista. "Change in digital marketing spending and traditional advertising according to CMOs in the United States from 2012 to 2020, https://www.statista.com/statistics/693449/digital-vs-traditional-marketing-budget-change-according-to-cmos-usa/.” Accessed March 3, 2022.
This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.