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Home Based Business Start-Up
Information about things to consider
when starting your home based business.
Launching a home
business is the American Dream. From the time most Americans
reach the age of 12 or 13 the idea of making money is one
of the top priorities, as taught to teenagers by their
parents. Teens learn they can make money by babysitting,
mowing lawns, delivering newspapers, tutoring, shoveling
snow...etc. Most kids don't realize it at the time, but they
are sowing seeds to become small work at home business
entreprenauers. Starting a home business and making it
successful is a goal most everyone from the working class is
interested in...
A century ago, before the industrial
revolution, over half the American population had the own
small business in the form of Raising Cattle, The Home Farm,
Mom & POP Corner Store, Laundry, Dairy, etc... Now the
trend is moving back to that. The work at home opportunites
available on the Internet are leading the way.
The
problem that surfaces for our children now is... by the time
they graduate high School the "system" has taught and
conditioned them that they will need to get a job or position
at a big corparation in order to have success in their lives.
They are also taught they need the so called "benefits
package" large corporations offer like health insurance,
retirement...etc.
Our children need to be reconditioned
and taught alternative career paths and so does the entire
adult population who are working for someone else.
The
first thing to consider before deciding to start a home based
business are the advantages and disadvantages of owning your
very own work at home business. Lets take a look at the issues
involved.
The tax advantages of having a home business
are fantastic. Basically, just about everything you spend
money on [from the day you start your home business] is a
tax write off. If you use your home for business purposes,
many of your personal expenses can be converted into
deductible business expenses. For example, when you qualify
for an office at home, the following expenses can be
deducted... Your “office” furniture and equipment, including
any desks, chairs, computers, couches, lamps or other
furnishings that you put into your office. If you buy a sofa
for $1,000 and put it in your family room, it costs you
$1,000. If you’re in the 31% bracket and you put the same sofa
in your home office, the IRS contributes $310 to the purchase
of it.
If your house is 2,000 square feet in size and
you use 400 square feet of it for your office, you depreciate
20% of the cost and improvements to the whole house. If the
improvements relate only to the office space, you can
depreciate 100% of those expenditures. You don't need an
account for this, your local H& R Block office will make
sure you get all the tax benefits for your home
business.
Having a qualified home office also allows
you a greater auto deduction. Commuting is not deductible.
However, with a home office, your commute may be your trip
from the bedroom to the basement. All other business trips
from your home office may be deductible at $.31 per mile. It
adds up quickly.
Let's not forget about your computer,
internet access, and entertainment of clients and potential
clients...etc...etc the list goes on and on. With
all the tax advantages available related to a business, is it
any wonder that large corporations stay in business year after
year with millions of dollars in losses.
You will
likely start as a "sole proprietor" which is just another way
of saying you are declaring yourself as self-employed. This
can be done on a part-time basis while you continue with
your regular full time job. Companies which you do business
with will send you a form 1099 at the end of the year if you
make over $600 with them. At some point you may decide to
incorporate and that is a decesion to be made only after
the money is rolling in on a regular and consistant
basis.
In most all types of businesses, it is an
advantage to set up with your bank a method of handling VISA,
Master Charge, and regional credit cards. The important thing
here is to ultimately set up your account in the bank that
will service all of these credit transactions for you -
one stop for all your banking needs. In most instances,
you'll find that having the capability to fill orders/make
sales via credit card transactions, will increase your volume
of sales considerably. This is assumming your business is
selling a product. The fact is that most successful new
business start-ups actually provide a service instead of
selling something.
Some states require certain
businesses to hold state licenses, such as those required in
many states for Barber or TV Repairmen. These are known as
"occupational permits" and are most often required of
plumbers, real estate people, electricians and a number of
other consumer oriented businesses. If you have any doubts,
check with your state offices for a list of those occupations
that require licensing.
I have put together a short
list of things to consider when starting your home based
business:
Decide on the type of
business
Make a list of things you like to do,
your work and volunteer experience, and items you own that can
be used in a business. Look over these, use ideas from it,
list possible businesses to start. Eliminate any business that
aren't appealing or don't fill a need people have. A service
of some type may be your best option.
How much time
you can devote to the home business
Many people
start a home business on a part-time basis while raising
children or working outside the home. Others start full-time
when family and finances allow. However you begin, figure out
how may hours per week you can devote to the home business.
Consider keeping a journal of your activities, examine it, and
determine where the business fits. Don't assume you have time
and find out later you don't.
Determine how much
capital you need and where the money will come
from
There are different ways to finance home
business start-up costs: use your own money, obtain a loan, or
find investors. If possible, it is better to start small, use
your savings, and not worry about repaying a debt.
Investigation & research
Spend a
fair amount of time researching different home-based
businesses. A library or bookstore can provide numerous books
on business basics, and on the specific type of
business that interest you. The Internet is your best
resource.
Design a plan
A good business
plan clarifies your ideas and establishes a clear course of
action. A good business plan should include a description of
your service or 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 promote, and how much money is need for start-up
costs.
Put your plan into action
After
you've chosen your business, set up your home office, have
your money set aside and ready, and planned a work
schedule...crank it up and go for it!
Your eventual success will be determined by how thoroughly
you researched your choice of business and how well you did
your homework. Bad things can happen having a negative effect
on your business, but if your plan has a solid foundation
- then you can easily overcome any losses or setbacks. Hard
work, perserverance and determination are essential...but a
little luck can also help.
Good luck, and may success
follow you from this instant on to the rest of your
life....
Author : Erich Winnecke Work-at-Home-Directory.com
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