Fifty million home-based businesses will be operational, in 1997, according to Link Resource’s National Work-at-Home Study. Across the country, people who want more control over their lives (at home and at work) are starting home businesses.
Related Articles 5 Easy Steps To Start Your Own Internet Business At The Newbie Forum The 50 Plus Generation, an Untapped Home Based Business Nicheâ€¦ Could I Really Start My Own Business? Do Not Fall Into These Mistakes With Your Home Based Business In New Orleans, Louisiana, Rick Hart’s home based Cajun Cargo ships seafood nationwide. In Palatine, Illinois, Stephaine Heavey works from home designing and selling original patterns for cloth dolls. And in Dallas, Texas, Lisa McElya published the Dallas Party & Event Planners Guidebook from the entire first floor of her two-story home.
These three people are living the American dream of owning a new company and their own business, but without the burden and overhead cost of having a physical business location. Virtual or Internet businesses are ideal because their start-up cost or initial investment to get set-up tend to be much lower. For example and in general, online affiliate marketing businesses do not require anything more than an Internet connection and perhaps a website. If the idea of working from home is appealing to you, but you do not know where to start, then here is your step by step guide brought to you by CompuLinear Software’s iMarketing Group.
STEP #1 DECIDE WHAT PART OF THE HOUSE TO USE
Select an area away from family activity, noise, and distractions. The perfect space is a separate room (or perhaps the garage, basement, or attic). Almost any area will do if it can accommodate all of your business supplies and equipment; in addition, you will need to provide enough workspace for computer hardware, desks, tables, etc.
STEP #2 DETERMINE HOW MUCH TIME YOU CAN SPEND ON THE BUSINESS
Many people start a home-based business on a part-time basis while raising children or working outside their home. Others start fulltime when family and finances allow or have been forced to do so in light of the recent recession, massive layoffs, and corporate downsizing here in the United States. However you begin, you must have a plan first and foremost; you will need to figure out how may hours per week you can devote to your new business; and how much seed money you have for your budding business venture. This is where a business plan and a little later a marketing plan are required. Make a weekly chart (see Step #22) of your activities so that you can examine it to determine where your niche business fits into the grand scheme of the marketplace. Do not assume that you will have time to devote to your new business only to discover later on that you that do not. Any new business requires commitment of one’s time especially if you are the sole proprietor who dons many hats daily!
STEP #3 DECIDE ON THE TYPE OF BUSINESS
Make a list of things you like to do, your work and volunteer experience, your knowledge base about a specific subject, and items you own that can be used in a business (see Step #17). Examine your list carefully; using ideas from the list, note all potential businesses to start. Eliminate any business that does not appeal to you or fulfill a need many people have. If you are considering an Internet business, then use Search Engine Marketing and Keyword Research to help you decide on a possibly viable online business.
STEP #4 CHOOSE A LEGAL BUSINESS FORM OR ENTITY
The three basic legal forms are sole proprietorship, partnership (including LLP), and corporation (including C, Sub Chapter S, and LLC). The most common is the sole proprietorship. As its name implies, a sole proprietorship is owned by one individual. It is the oldest form of business, the easiest to form start, and the least complicated to dissolve. However, keep in mind that the sole proprietorship’s personal liability exposure is unlimited; your risk depends upon the nature of your business operations, environment, local economy, cost of goods, trends, and a few other factors. Here are some of the advantages of this business form (entity):
1. You own or keep all of the profits after expenses are paid.
2. Your business is easy and cheap to organize. You do not need any state or federal government formation requirements or approval, although you may be required to carry a city, state or county business and/or excise tax licenses. Your only other obligation is to notify the Internal revenue Service (IRS) for the purposes of sales tax.
3. You are the boss.
4. There are some tax savings and advantages. However, you must pay regular individual taxes on your income, property, and payroll, but these are not levied as special taxes as with a corporation. You will also have to pay sales tax which you have received from your customers’ purchases. Check with the IRS and/or a tax specialist regarding Internet sales and purchases outside of your state of business operation.
5. There tends to be a greater personal incentive and satisfaction because you have a personal investment at stake should your business not become successful; thus, you are more willing to put extra time, thought, and energy into the business. Now when your business becomes successful, you will enjoy a greater sense of accomplishment knowing that its success is solely dependent upon your managerial decisions and skills.
STEP #5 DETERMINE WHERE THE MONEY WILL COME FROM
There are four ways to finance start-up costs: use your own money, obtain a loan, grants, or venture (angel) capital. Using your own money is great if you have it on hand because you will not have to worry about repaying a debt.
STEP #6 GATHER INFORMATION
Spend a few weeks or longer researching home-based businesses, marketing trends, marketing intelligence, and your business niche. The World Wide Web, the library, or bookstore are excellent resources of information.
STEP #7 CHECK ZONING RESTRICTIONS
Find out how your property is zoned then call City Hall and ask about regulations that might apply to home businesses in your zone. Additionally, if you rent or live in a condominium, check your lease or homeowner’s association guide to be certain that a home business is allowed.
STEP #8 CHOOSE A BUSINESS NAME AND REGISTER IT
If the business you choose is different form your name, then file an assumed (or fictitious) name certificate with the county. You are notified if another business already has that name, so you can select a new one. The requirements for business name registration will vary per region.
STEP #9 WRITE A BUSINESS PLAN
A good business plan clarifies your mission, ideas, and establishes a plan of action concerning how you plan to go to market. A good business plan should include a description of what you are selling, your background and qualifications, who the prospective customers are and where they can be found, what is needed to build the business, how you plan to advertise and promote, and how much money will be need for start-up costs. One of the biggest problems many new small businesses have is that they are undercapitalized. A solid business plan will help you plot your course to success!
Bad Credit Lenders
Learn How to Get Approved for a Loan with Bad Credit Today! CanDoFinance.com/BadCredit
How I Removed Bad Credit
1 simple trick & my credit score jumped 217 pts. Banks hate this! http://www.thecreditsolutionprogram.com
STEP #10 GET AN IDENTIFYING NUMBER
If you are the sole proprietor of the business and have no employees, you may either use your Social Security number or an Employee Identification Number (EIN) as the business number on official forms. If you have employees, or the business is set up as a partnership or corporation, you must obtain an EIN. To do this, complete IRS Form SS-4 (Application for Employer Identification Number) and file it with the nearest IRS Center.
STEP #11 OBTAIN A SALES TAX PERMIT
If the product or service you sell is taxable, you need a state sales tax permit. Call the local tax agency, explain the type of business you have and what you sell, and ask if you need to collect sales tax. If you do, they will send you the necessary information and forms to complete. This tax number can be used for purchasing products you plan to resell. If you plan to operate a non-profit, then you will want to apply for 501(c)(3) tax-exempt status.
STEP #12 OBTAIN LICENSES & PERMITS
It’s very important not to overlook any necessary license or permit. For example, some cities and counties require a general business license, and most have special laws regarding the preparation and sale of food. Contact your local county office for the requirements.
STEP #13 SELECT BUSINESS CARDS, STATIONERY & BROCHURES
Spend time on the color, design, and paper for these items. Make sure that your business’ logo is relevant to your product or service. These are marketing tools and you want to present your business in the best light and as competitively as possible. If you are creative, then there are a variety of professional grade business card / stationery software at your disposal; otherwise, consult a graphic designer.
STEP #14 OPEN A BUSINESS CHECKING ACCOUNT
Call several banks to compare services they offer, minimum balances, credit cards, credit lines, rates, and service charges. When you open your business account, you may need to show your business license. Obtain a credit card in the business’ name; if this is not possible, then set aside a personal credit card for business expenses.
STEP #15 SET UP RECORD-KEEPING SYSTEMS
After doing a little online research, one will find a wide selection of affordable record-keeping, financial, bookkeeping / accounting, and sales CRM software.
STEP #16 CHECK IRS REQUIREMENTS
If you comply with basic IRS guidelines, you may be able to deduct a percentage of your normal household expenses (mortgage, interest, taxes, insurance, utilities, repairs, etc.) as a business expense. For further information, seeâ€”IRS publication #587, Business Use of the Home; IRS forms: Schedule SE (compensation of Social Security Self Employment Tax) and Schedule 1040 ES (estimated Tax for Individuals).
STEP #17 OUTFIT THE BUSINESS
Make a list of everything needed to start your business. Look around the house for items that are usable; you will save a lot of money by doing this. Always keep an eye out for quality, inexpensive items for your home-based office.
STEP #18 DECIDE ON TELEPHONE REQUIREMENTS
Contact the telephone company to find out the cost of a business phone in your area. If you cannot afford a separate business line, investigate the telephone company’s regulations on using your personal phone in a business. It may be possible to do this if you follow certain guidelines. Keep a record of long distance business calls as they are a deductible expense. See if you can save money by bundling your Internet and telephone services for a lower price. Pre-paid calling card services will save your business some money too.
Finally, consider the benefits of an answering machine or service to capture important telephone calls when you are out of the office or away on vacation. And always remember to return calls in a timely and professional manner.
STEP #19 CHECK OUT THE POST OFFICE & SHIPPING
Using a post office box as the business address down plays the fact you are home-based. It also prevents customers from dropping in at all hours. While looking into box rental, ask for information on the various postal rates, particularly bulk rate, if you plan to do large or specialized mailings. If you mail many packages locally or internationally, then check out the many parcel / shipping services that are available and definitely be conscious of shipping, handling, and insurance costs.
STEP #20 PURCHASE THE NECESSARY INSURANCE
Check with your homeowner’s insurance agent about a rider for your existing policy or the need for a separate business policy. Also, make sure you have adequate personal and product liability coverage. If you are a renter, then check with your insurance agent or broker to see if your business is covered. In some instances, you may be required to carry Errors and Omissions (i.e., business liability insurance) insurance, especially if you engage in a professional service type of business such real estate, insurance, notary, financial services, architecture, engineering, etc.
Shop around, as each insurance company and each state have different rules, regulations, and requirements concerning home business operations.
To save money on medical insurance, join an association and participate in their group medical / health plan. Discount health care cards are another option for your employees and yourself.
STEP #21 ORGANIZE THE HOUSE & YOURSELF
To have more time for business activities and functions, organize and simplify your household routines. Start by holding a garage sale to get rid of unnecessary possessions. Next, have a family conference and divide household duties and chores while making sure each person does his or her own part. There are numerous personal organizational management software, PDAs, and tools which can help you and your business get organized.
Set up a work schedule so you won’t get sidetracked by TV, neighbor’s visits, snacking, surfing the Internet, and non-business related telephone calls. This also means that you should set a specific time of day for telephone prospecting / sales calls as well as for returning calls.
STEP #22 START AN ELECTRONIC BUSINESS JOURNAL
From the pre-planning stages to Day 1 and throughout the life of your new business, keep an electronic journal of your business’ day-to-day activities, business cases and challenges, planning, action items, and of course its progress. Use your favorite word processing and/or spreadsheet program. By doing so, you will be amazed at how much more organized and efficient your business will be and how you will be much more on top of your business’ daily operations. This is also a great customer service tool.
In conclusion, forming and operating a home-based business is a wonderful, challenging, and often rewarding venture. There is nothing else like being your own boss and being the sole or top decision-maker. The satisfaction is not only in the money earned and the growth of your, but in actually doing what makes you happy and truly enjoy doing.
To your success!