Understanding The 5 Main Types of Home Businesses

This post is in two parts:

Part 1: Your Mini Self Assessment
Part 2: Five Different Types of Home Business Ideas

Business Ideas

So your looking for the best home business ideas to help you earn at least $1,000 per month working at home.

But its really hard to know which home business to start because there are so many different options available.

I’ve encountered this problem on several occasions over the years when wanting to start a new home business, so I totally understand what your thinking is at this moment.

Because you don’t want to invest time and money into starting a business only to find out six months down the line that it’s just not for you because you’re not enjoying it, and then start all over again with another home business idea.

Yup, been there and done that – more than once too!

And I don’t want this to happen to you.

So I’ve gathered all the knowledge and information I’ve gained over the past 20+ years in the home business niche, and put it in the most simplest of terms.

What I’ve done is put all the business at home ideas and split them into five main categories.

The five main categories are:

  1. Home Based
  2. Online Based
  3. Freelance
  4. eCommerce
  5. Passive Income

This will (hopefully) help you decide which home business is right for you.

The business ideas between 2. and 5. are all online businesses, leaving only 1. home based, an offline based category.

I hope this will become clearer and more apparent when you read through the rest of this page.

Also, I think it’s a good idea to do a little mini self-assessment on yourself before you start looking at the different home business ideas.

You need to know for sure:

  • What type of personality you have.
  • What kind of lifestyle you currently have.
  • What kind of lifestyle you want.
  • Things you want to do and achieve in your business.
  • Things you don’t want to do and achieve in your business.

Because once you’re clear on these, you can then go through each type of home business and match the activities from these businesses with the answers to your self-assessment.

This is very important.

For Example:

A)  If you’re shy and introverted, then you probably shouldn’t go for a home business which requires a lot of socializing and putting yourself ‘out there’ in order to make money.  Direct sales and hosting party plans for example would probably not suit you.

B)  But if you’re shy and introverted then an online business such as blogging or selling items on Etsy or Shopify would probably be the best option as there are no social interactions to make sales. It’s done online, automatically and no human involvement is necessary to make the sale.

And of course vice-versa.

c)  An extrovert would thrive at direct sales but would probably find an online business too isolating.

See the difference?

I cannot stress this enough when looking for a home business; because you’ll never truly succeed if it doesn’t suit your personality and the lifestyle that you want to create.

Intrigued? Excited?

Then let’s get started.

Your Mini Self Assessment

So this is the very first place to start before looking at any type of home business to start.

Let’s find out exactly what type of person you are and what you want out of life. When you have all this crystal clear and then start looking through all these home business ideas, you should know immediately what ones will suit you and which ones don’t.

It’s like building up a profile of yourself and using this as a home business blueprint to help you find the perfect home business which helps build the type of lifestyle which you want to carve out for yourself.

So get a pen and a notebook and write the answers down to the following.

How would you describe your personality?

Here I want you to think of your:

  • Strengths
  • Weaknesses
  • Your likes, and
  • Dislikes.

You can then use this information to discard some home business ideas and put the ones which suit you to one side into the ‘contemplating’ pot.



  • You’re talkative.
  • Friendly.
  • Outgoing.
  • Confident.
  • You love to socialize.
  • You have no problem talking to people you don’t know.
  • Action-orientated.
  • Criticism doesn’t crush you.


  • You don’t like being alone for large amounts of time.
  • You can be impatient at times.
  • You can’t focus on one thing for a prolonged time.



  • You’re a good listener.
  • You have time and patience for others.
  • You’re self-sufficient.
  • You enjoy your own company.
  • You’re a loyal and trusted friend.
  • You’re focused and pay attention to detail.
  • You’re very observant.


  • You don’t like being in crowds.
  • You don’t want to shout out loud just to get heard.
  • You sometimes lack in confidence.
  • You don’t like pressure.
  • You get stressed easy.
  • You get deeply affected by criticism.

Of course, you might have some traits of both extrovert and introvert (I do), but that doesn’t matter. We are all very individual and cannot be compartmentalized into one type of personality trait anyway.

So just use the above as a guide to help you think deeply about yourself and write down what your strengths/likes and weaknesses/dislikes are without defining yourself as an extrovert or introvert.

Once you’ve done that, you can use these as an advantage to find your perfect home business.

So let’s do that now.


So these are the different types of home businesses.

Before you look at a large list of home business ideas, you need to know what activities each type of business entails.

These activities are what you’ll be doing on a daily basis so its crucial that you know and understand these before you jump ahead into a new business venture.

1) Home-Based Business

This is where you run a small business and are based at home rather than from a small shop or outlet.

The major activity is not online-based and is more of a traditional type of business.

Examples of Home-Based (Offline) Businesses:

Whats Required

Customer Care: You need to be a ‘people person’ and have the patience for outstanding customer care and customer service.

Marketing: You need to be able to market your services both offline and online effectively.

Basic Accounting: You need to keep track of your income and expenses and complete the necessary self-assessment tax return.

Type of Income

Trading Time for Money.

If you don’t work, you don’t get paid. So you’ll have to plan ahead for holiday’s, sickness and unplanned events.

Personality Traits Needed

  • Friendly
  • Outgoing
  • Have patience
  • Have stamina
  • Love being around people

A Home-Based Business Is Not for You If

  • You don’t like hard work (hey, some people don’t).
  • You don’t want to trade all of your time for money.
  • You don’t want to build a customer base.

>> Find Home-Based Business Ideas

2) Online-Based Business

An online business is the most popular type of home-business, however it’s not for everyone. This is discussed below.

Examples of Online Businesses:

  • Blogging
  • Freelance Writing
  • Virtual Assistant
  • Coaching
  • eCommerce Store.

I’ve broken the different types of online businesses down further in sections 3 – 5. But this gives you an overview of what’s possible when wanting to start business online.

As you’ll soon discover, there are many different options available and there are sub-categories within categories.

For example:

  • Online Business > Freelancing > Freelance Writer > Health & Wellness Blog Post Writer
  • Online Business > eCommerce > Shopify Store > Kitchen Wares > Dropshipping
  • Online Business > Virtual Assistant > Digital Marketing > Pinterest Management

So you can see that no matter what your personality is and what you like or dislike, then you can find an online business which suits you.

Whats Required

Remote Working: This is the biggest drawback. It can be very lonely and isolating.

Digital Marketing: You need to be able to market and promote your business effectively online. Digital marketing is a must.

Basic Accounting: You need to keep track of your income and expenses and complete the necessary self-assessment tax return.

Type of Income

Trading time for money and/or passive income.

If you offer a service as a freelancer, then you’re trading your time for money.

However, if you run a Shopify store and purely use the dropshipping business model, then that’s passive income.

So it depends on what type of online business you choose.

Personality Traits Needed

  • Working by yourself at home is not a problem.
  • You like your own company.
  • You like learning new things (technical & digital marketing).
  • You have the ability to concentrate for long periods.

A Online Business Is Not for You If

  • You’re very social and need people contact daily.
  • You don’t want to learn anything technical (massive learning curve).
  • You don’t want to learn digital marketing (massive learning curve).
  • You don’t want to socialise with people online.

>> Find Online Business Ideas

3) Freelance Business

This is one of the most popular online businesses for four main reasons:

  • There are dozens of freelance services to offer.
  • These services are always in demand online.
  • It’s quick and easy to start.
  • You can start earning money within days.

A freelancer is also known as a service-provider.  You provide a service in exchange for money.

Examples of Freelance Businesses:

  • Virtual Assistant
  • Graphic Designer
  • Freelance Writing
  • Social Media Manager

Whats Required

Service Provider: You need to have a skill or learn a new one to offer as a service.

Marketing: You also need to market yourself and promote your services to get clients.

Basic Accounting: You need to keep track of your income and expenses and complete the necessary self-assessment tax return.

Type of Income

Trading Time for Money.

If you don’t work, you don’t get paid. So you’ll have to plan ahead for holiday’s, sickness and unplanned events.

Personality Traits Needed

  • Friendly
  • Good communication
  • Have stamina
  • Have attention to detail

A Freelance Business Is Not for You If

  • You don’t want to offer a service.
  • You don’t like hard work.
  • You don’t want to trade all of your time for money.
  • You don’t want to deal with clients.

Many freelance service providers supplement their income with a passive income such as affiliate marketing or create their own digital products.

>> Find Freelance Business Ideas

4) eCommerce Business

An eCommerce business is a fun and profitable way to make money online.

You could use a hobby or the love of a product or topic and set up a store around that.

So for example, if you have a love of boho jewelry, then you could set-up a boho jewelry shop.

Love all things cats? Set up a store selling cat socks, cat ornaments, cat toys and anything else to do with cats.

Examples of eCommerce Businesses:

  • Esty Shop
  • Shopify Store: Physical Shipping
  • Shopify Store: Dropshipping
  • Amazon Fufillment
  • eBay Store

Whats Required

Product Sourcing: You need to keep your store stocked up with things people actually want to buy.

Technical: You need to learn how to set up your shop and upload products to display.

Marketing: You need to constantly market your store online in order to get a daily influx of sales.

Basic Accounting: You need to keep track of your income and expenses and complete the necessary self-assessment tax return.

Type of Income

Trading Time for money (ish).

You need to ship the items out and keep customers happy.

You can also earn a passive income if you go down the dropshipping route.

Personality Traits Needed

I think an ecommerce business would be suited to most people no matter what type of personality they have.  It would definitely suit shy people who don’t want face to face contact or being sociable with others.

You will need to do some form of customer support, but that will just be through email.

An eCommerce Business Is Not for You If

  • You don’t want to ship products out daily.
  • You don’t want to source products.
  • You don’t want to learn digital marketing to promote your shop.

>> Learn About Running an eCommerce Store

5) Passive Income

There are many ways to create passive income but I’m only talking about ways to create online passive income.

You could create a passive income cash flow alongside another business but you could have passive income as your sole business if you want to, plenty of people only sell digital products.

For example, you could set up a blog and blog about a subject which you know and love and then recommend associated affiliate products and then start creating your own digital products too and just sell them from your blog.

Examples of Passive Income Streams:

  • Affiliate Marketing.
  • Selling Digital Products.
  • Monthly Subscription Service.
  • Monthly Membership Club.

Whats Required

Problem Solving: Solving a problem is the best way to sell an affiliate product or your own.

Marketing: You need to be able to market the affiliate products and/or your own with digital marketing.

Basic Accounting: You need to keep track of your income and expenses and complete the necessary self-assessment tax return.

Type of Income

Passive income is not really 100% passive as even when you create your digital product, for example, then you have to constantly promote it with digital marketing.

However, with passive income you can makes sales and the money is automatically put into your bank account while you sleep or are vacation.

Personality Traits Needed

This is the beauty of passive income, you can sell products and make money passively if you’re an extrovert or even if you suffer from depression or anxiety.

This is why I just LOVE online passive income.

A Passive Income Is Not for You If

I found it difficult to come up with reasons why anyone wouldn’t want passive income cash-flows in their business.

Because even if you don’t want to create your own digital product, you could always do affiliate marketing and make a sizeable income just from that.

I would encourage anyone wanting to run their own online business, no matter what type it is, to create a passive income stream alongside their main source of income.

>> Find Passive Income Ideas

Create Multiple Streams of Income

As I’ve briefly mentioned above, I encourage you to (eventually) create a passive income stream alongside your main business.

But of course you could always mix and match any of the above businesses to create multiple streams of income.

For example you could:

  • Be a social media manager and also freelance blog post writing.
  • Be a virtual assistant and run a blog and make money via affiliate products.
  • Be a dog walker and run a Shopify store selling dog toys and other dog-related items.

And to go even further:

  • Be a dog walker, run a Shopify store selling dog toys and other dog-related items and sell an ebook with dog training tips.

So the above is:

Home Based (dog walking) > eCommerce Store (Shopify) > Passive Income (eBook).

There’s no set rules.

You can literally cherry-pick any form of online business and any form of digital marketing to suit you and your lifestyle.

Digital Marketing

As you can see from all the above home business ideas, all of them require a large amount of digital marketing apart from the home-based businesses.

So you must be prepared for a big learning curve to not only learn about your new online business, but also how to promote it via digital marketing.

The good news is that there are many forms of digital marketing but you only need to to master one or two digital marketing activities to get enough visitors to your chosen online business to make enough sales to earn $1,000+ per month.

Related Reading
The Six Main Types of Digital Marketing
Activities To Explode Your Traffic

Side-Note: If you run an offline business, then the best marketing activities are generally word-of-mouth and flyers.

I will write a post about offline marketing strategies soon, so stay posted!

30+ Home Business Ideas

So this is the part what you’ve probably be wanting to see.

Business Ideas for WomenBut I hope you understood why I wrote this blog post.

You need to know what each type of business entails first to see if it suits you and your lifestyle before you go ahead and invest your time and money into it.

So I hope that you have found this post helpful before you read my 30+ home business ideas free guide.

Good luck and let me know how you get on!





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