Legitimizing Your Home Business

Last Updated on December 26, 2020 by HodgePodgeDays

There are many home businesses that start as something to do, a bit of a hobby or just some way of earning a little extra cash. Sometimes they can become more successful than it was thought they would be and then comes the time to legitimize it.

The phrase ‘legitimize your business’ can have more than one meaning. You need it to be a genuine business in the eyes of consumers if they are to trust you and give you sales. You also need to be legitimate in the eyes of HMRC so that you comply with the laws of the UK.

These two reasons can become very intertwined, as becoming a legitimate business can give you more credibility with potential customers.

Legitimizing Your Home Business

Decide On A legal Entity

You need to decide what type of business you want to be as it does not look good to be changing from one to the other. The main two options are as a sole trader or a limited company, and of course, if there is more than one of you involved you could be a partnership.

Whichever you opt for you will need to establish an address that is not a P.O. box or home address. Limited companies will have a registered office address they can use, or as with sole traders, they could have a business mailbox to accept any post and packages.

A business mailbox gives a street address through the mailbox but you do have to physically go there to collect anything. With a registered office address with the right people, your post can be scanned and forwarded to you by email, which can be a great time saving when you are busy.

Establish An Online Presence

If your home business is not online now is the time to establish an online presence for it. Consumers do not look in Yellow Pages any more when they need to find a business that sells what they need. They type it into their search engines and check out the results.

Consumers will expect your website to load very quickly or they will not stay around to wait. They have come to expect instant with most things they do on the Internet and of your site is slow you will lose valuable customers.

Your site will need to be attractive and responsive to all devices too. Many new businesses are creating their own websites with the likes of WordPress, which is a user-friendly tool that is free.

If you do not have a clue where to start though, there are many freelancers around who will help you to set up a website that will be good for your home business.

Use Social Media

Social media is not only a cost-effective way of promoting your home business; it also legitimizes it in the eyes of many users. If you have a business page on Facebook, LinkedIn, Twitter or any other social media platforms, users will assume that you are a real business and not a scam.

It is then up to you to build trust in your brand. You can do these by posting information that could be useful to your target audience, and replying to any comments you receive. Always reply with a positive tone and then people will start to trust what you say.

Social media works partly because people will generally buy from friends rather than strangers. It may be that the only friendship you have with them is on social media, but to many consumers that does not matter, you are still a friend.

Show Testimonials

Encourage customers to write testimonials and show them on your website. If people can see that other people have used your services or brought products from you, it will help to legitimize your business for them.

Some businesses encourage the writing of testimonials by offering a discount off the next purchase or set up a points system tied in with recommendations. This way customers will keep coming back as most consumers love something for nothing and will do whatever it takes to get something free.

Legalities That Show You Are Legitimate

When you register your business with the taxman, they do not give you anything legal that you need to show so that customers know you have done that. However, if you have to register for VAT that is a different matter. Then you have to show your VAT registration number on everything to do with your business, and some consumers look for this as it confirms that the business is above board.

You only have to turn over £85,000 a year currently to have to VAT register, but you could well find that your sales increase because of it. You can register before you reach the legal level, and many businesses see it as an advantage and do just that.

Form the Right Business Partnerships

You no doubt have some skills in running your business and there could be some aspects of it you are not so good at. Speak with other business people you know and you may well find that you can swap talents. There is also the option of outsourcing any tasks you find mundane or are taking up too much of your valuable time. Accounts, bookkeeping, payroll and social media management are just a few suggestions.

You may well find that the other businesses you speak with already have freelancers they use for some of these tasks, and the will be able to give you recommendations. That can save you a lot of time in tracking down people you can trust that are capable of the work you want doing. Outsourcing will allow you to deal with the more important aspects of your business, such as dealing directly with customers and increasing sales.

Each week you are trading your business becomes more legitimate in the eye of consumers. There are some who will not even visit a website until they have seen it advertised a few times, as then they feel the business must be real and not just some scam artist after their money.

This is a contributed post.

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