The first step in starting a small business from home is to test the market. Ask yourself: is there a demand for what you create or offer? Start small by selling to friends, family, or through platforms like Etsy, eBay, or local Facebook groups.

This early stage is crucial to gather feedback, fine-tune your offer, and understand your target market without major financial risks.

Tip: Set up a simple online store or attend local fairs and markets to reach potential customers and build confidence.

If your hobby starts generating income, you’ll need to register your business with HMRC. Many home-based entrepreneurs in the UK start as sole traders, which is straightforward and cost-effective. Alternatively, forming a limited company may offer tax and liability benefits.

Also consider:

• Business insurance (especially if customers visit your home)

• Licences or permits (e.g. food businesses)

• Self-assessment tax returns each year

Bonus tip: Keep your receipts and track all business expenses — this will make life easier come tax season.

When starting a small business from home, your website is your storefront. A simple but professional website builds credibility and gives customers a way to learn more, place orders, or contact you.

Register a domain that reflects your brand. Use platforms like Wix, WordPress, or Shopify for easy setup. Don’t forget to set up social media accounts and list your business on Google Business Profile (especially if you serve your local area).

SEO Tip: Optimise your site for phrases like “home-based cake business Manchester” or “buy handmade gifts UK” to improve search engine rankings.

Marketing doesn’t have to cost a fortune. Leverage free tools and platforms to promote your products or services. Share behind-the-scenes content, customer testimonials, and offers through Instagram, Facebook, and TikTok.

Start a blog sharing useful information related to your hobby — not only does this position you as an expert, it also boosts your search engine visibility.

Example: If you’re a home-based candle maker, write posts like “How to Choose the Right Scented Candle for Your Room.”

When starting out, it’s tempting to undercharge — especially if you’re working from home. But your time, skills, and materials deserve fair compensation. Factor in everything from packaging and shipping to electricity and marketing costs.

Benchmark your prices against competitors and ensure you’re building in a profit margin.

Pro Tip: Don’t forget to include your own hourly wage in your pricing calculations — your time is valuable.

Even if you start a small business from your kitchen table, treat it professionally. Use accounting tools (like QuickBooks), manage orders carefully, and schedule your time efficiently.

As your business grows, you may need more space, hire help, or upgrade equipment — so plan ahead. Many successful UK businesses started at home and scaled over time.

If you’re passionate about your hobby and looking for how to start a small business from home, you’re already on the right track. With the right preparation and commitment, you can turn that passion into a profitable, flexible career.

The key is to start small, test your idea, and grow steadily — all from the comfort of your home.

Ready to turn your hobby into a business?
Subscribe to our newsletter for more tips on starting and growing your home-based business in the UK.