Home Based Business Is running a business from home a by ramhood17

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									Home-Based Business

Is running a business from home a good idea?

Working at home may sound like a good idea, but it isn’t for everyone.
There are several things you should consider before starting your own
home-based business:
     Family: Having a home-based business can be stressful for the
     whole family. Hold a meeting to discuss the implications of
     working at home, such as household duties and money issues.
     Isolation: Most home-based businesses have few or no
     employees. Depending on the amount of contact you’ll have with
     clients, you may be stuck in solitude all day. If you’re the type of
     person who enjoys working alone, that’s not a problem. But if
     you thrive on social interaction, you may want to reconsider this
     idea.
     Distractions: Kids, housework, and the TV are not conducive to
     hard work at home. Take all possible distractions into
     consideration and decide if you will be able to get the job done.
     Nature of the business: For some occupations, it’s just not
     possible to work at home. If you’re going to have to store large
     amounts of inventory or have lots of customers coming to your
     home, you’ll probably want to relocate to a commercial location.
     Some services such as web design and accounting are good
     choices for home-based businesses.

Zoning laws and other legal issues

Many cities and counties have zoning laws that regulate whether you
can operate a business from home. Selling retail goods, having
employees, displaying prominent signs, the increase of traffic, and
storage of dangerous materials are most often concerns of these laws.
You may be required to obtain a home occupation permit if there’s a
chance you could violate the zoning law. Check with your city clerk for
more information. Also, additional rules may be placed upon you if you
rent or belong to a homeowners’ association. Contact your landlord or
review your lease/contract to make sure you have permission to run a
business on the premises.

It’s a good idea to inform your neighbors of your plans to start a
business before actually opening your doors. Not only is it the
considerate thing to do, but it may also keep you out of trouble.
Increased traffic and other concerns may drive the unknowing
neighbor to contact the police department. Always try to minimize
your business’s negative impacts on the community.

Equipping your home office

The ideal space for your home office is obviously a separate room
with a door, but if that isn’t an option, you may have to settle for a
secluded corner. Privacy is important though, so if you don’t have a
separate room, use a screen or curtain to separate your business from
the rest of your home. Also, it’s best to have a separate entrance for
your office so customers don’t have to walk through your home.

Selecting the proper desk and office chair is an important step. Your
desk should have sufficient space for the equipment you’ll be using,
but should not take up your entire office. A comfortable chair is
important for ergonomic reasons. Make sure it’s adjustable and test-sit
several different models.

These days, it is essential to have a computer to run a business. The
first thing you must decide is if you want a laptop or a desktop. If your
business requires you to travel a lot, or if you want to be able to take
your work to client meetings, a laptop is a logical choice. If most of
your work can be done by just sitting in front of your desk, consider
buying a desktop. Before you buy a computer for your office, think
about what features you need as far as memory, processing speed,
etc. It might be tempting to just buy the “best,” but you should tailor
your technology to your tasks, not your taste.

Another consideration is that of software. At the very least, you’ll
need a word processing program and other basic applications. A
popular choice is Microsoft Office, and it may come already installed on
your computer. Accounting software can help you keep your books in
order, and if you’re going online you may want a web design program.
Other software options will depend on the nature of your business.

A printer is another home office essential. Depending on your needs,
you’ll have to decide whether you want a laser or an inkjet. Laser
printers are more expensive in the beginning, but they also deliver
higher quality, speed, and lower variable costs. On the other hand,
inkjet printers allow you to print in color and the initial hardware cost
is lower. However, inkjet cartridges need to be replaced often, which
can be expensive.
Depending on the nature of your business, you may benefit from
having a fax machine, scanner, and copier in your home. An
alternative to buying several different office machines is to purchase a
multifunction fax/scanner/copier/printer. They are both convenient and
space saving.

Having a separate phone line for your business may help to solve
some problems. For instance, you probably don’t want your small
children answering business calls. When you answer your business
line, you’ll know to use a professional greeting. It’s also useful in
determining which calls are business and which are personal after
hours. In addition, your business should have its own answering
system for when you can’t take calls. An answering machine is one
option, but voice mail may be better. Most phone companies will offer
voice messaging for a nominal monthly fee. Make sure your recording
is professional and concise. Don’t forget to include hours of availability
and other pertinent information in your greeting.

Cellular phones and pagers are important communication tools. It
may make the customer feel more secure to know that he or she will
be able to reach you in case of an emergency. Like everything else,
your decision to buy or not to buy lies in the nature of your business.

Insurance

Inventory, equipment, and customers are all added risks that your
current insurance policy probably doesn’t cover. As a home-based
business owner, you’ll need to investigate liability and property
damage coverage. Some different types of insurance are:
      Business owner’s policy: This policy includes both liability and
      property damage coverage. Some duplications may occur
      between this and your homeowners’ policy.
      Home office policy: A combination of homeowners’ and
      business insurance. It covers general business liability, some off-
      site property, fire, and theft. This may be a good choice for a
      small company with just a few visitors each week.
      “Business pursuits” endorsement: An addition to your
      homeowners’ policy that provides the least protection. It is not
      recommended if you have customers in your home or if you have
      expensive equipment.

Tax deductions
As a home-based business owner, you can certainly deduct business
expenses from your taxes, but you may also be able to deduct a
portion of your household expenses. The catch is that your home-
office space must be used “exclusively” and “regularly” as your
principal place of business. You may need an accountant to decipher
the exact meaning of these IRS terms. To calculate your deduction,
you first need to figure out the percentage of your home you use for
business purposes, either by square foot or the number of rooms.
Then use that same percentage to find out how much in utility,
property tax, and insurance expense can be deducted from your taxes.

								
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