So You Want To Start Your Own
Home-Based Business

Contributed by Elaine Landau

We’ve all said we’re going to do it at one time or another. When your boss takes credit for your ideas, that’s when you think about it. When you put in overtime over a holiday, that’s when you really think about it. When you realize you are missing the most important years of your kids’ lives, that’s when you do it.

We just have to remember that there is an upside and a downside to hanging your own shingle. Before taking that step, be sure you’ve considered a few things.

Money, Money, Money, Money.
How many times have you stumbled upon a new business and wondered why you haven’t heard about it or seen ads for it in the media. Chances are that the business owner’s cash flow ran low and the advertising budget was the first to go. That could mean a quick end to a new business.

Money, and the lack of it, could kill a business before it even has a chance. If it is at all possible, you may want to start your business while working at another job. That way, if your start up is slow, you haven’t put your personal finances in jeopardy. All or nothing is a very romantic concept, but not when it comes to putting all of your own money into one business venture.

Do you have permission to do this?
Before starting your own business, do your homework. Find out if you need licenses, registrations, waivers, whatever to open your doors. Government agencies have a way of wanting a piece of the action. Does your location have to comply with any zoning restrictions? If you have a computer, use it to find information. If you are not Internet savvy, no sweat. Basic Internet training is available online. Most government agencies have sites that provide the information you are seeking when opening a new business.

Working at home? Make sure you have the right kind of insurance.
If you will have visitors and clients doing business with you in your home, keep in mind that your homeowner policy will not come to the rescue if they are hurt or injured on the premises. Your policy most likely does not cover business visitors unless you have alerted them to your in-home business and your policy has been written to cover that risk.

If you are unsure about your coverage, the best thing to do is take out a separate policy. And that brings us back to zoning restrictions, registration, and licenses. If your business is deemed illegal because you have not complied with city and state ordinances and requirements, no insurance company will cover you.

You might also want to consider income protection insurance. Unlike a paid employee with company benefits, including disability coverage and income protection, your situation is now quite different. You need to make sure you have that protection through your own insurance policy.

Since you will be dealing with people in your business, you should definitely consider carrying public risk insurance in case of a negligence claim against you and your company.

Where are the perks?
Remember, when you worked for a company, you probably also had medical, dental, optical, and other benefits as part of your package. When you are the boss and the employee, you need to purchase your own insurance for coverage.

The buck stops where?
Before you open your doors, consult a reputable business accountant and seek professional tax advice. You want to structure your business to be on the most tax-effective schedule possible. You need to know what expenses you can claim and what expenses are giant red flags to the IRS. Good record keeping is essential since city, state, and national government entities can ask to review your records at any time.

You will also find out if it is best to rent capital equipment or purchase it outright. If you have one or more employees that require a lot of paperwork, diligent record keeping is a must. Procrastination and disorganization can lead to disaster in any home-based business. All of these issues should be addressed and sorted out prior to starting your own venture.

Avoid distractions.
I have a friend who simply cannot work out of her home. She would much rather put dishes in the dishwasher than return calls. She cannot sit at her computer knowing there is a pile of dirty laundry a few feet from her office door. She obviously is not a good candidate for having a home-based business.

If you are a professional or semi-professional procrastinator, you may also want to avoid the home-alone business. Why? Because if you tend to put things off, chances are clients won’t appreciate missed deadlines or unfinished work. At least in a company a procrastinator can blame the guy in the next cubicle. Who do you blame when you are a one-person operation?

Educate yourself to be the best.
Not sure you are up on the latest computer programs and your new business depends on your computer savvy to succeed? Log on right now and discover all the knowledge that is right at your fingertips. Advanced tutorials in Word, Excel®, PowerPoint®, and QuickBooks® could prove invaluable to your company’s success. Take advantage of basic Internet training as well. Not only is the Internet a valuable resource, it is a great way to network and get the word out about your new venture.

Size up the competition.
Find out who you will be competing against as soon as you open your doors. Look in the phone book. Carefully study the competitions web sites. Find out what they offer and what they don’t. Find their weaknesses and exploit them. If you can prove from your first day of business that you offer something nobody else does, you’ve got a winner.

Now, if any of the suggestions discussed here have frightened you off, that is indeed unfortunate. Starting your own business is very challenging, but extremely liberating. If you have something to offer and can make a living doing it, that is a dream come true. Please just take these thoughts as words of advice, not warning. Every economy needs forward thinkers, movers and shakers, and those who break away from the norm to start something amazing.

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About the Author:
Elaine Landau is a freelance writer, publicist, web site editor, and television writer with more than 15 years of experience in marketing, advertising, and publicity.

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