21 Techniques To Home Based Business Success2661027
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Fifty million home-based corporations are going to be in procedure by 1997, in accordance to Link Resource's National Work-at Household Survey. All around the region, individuals who want a lot more regulate about their life are starting house organizations In New Orleans, Rick Hart's dwelling primarily based cajun Cargo ships seafood nation broad. In Palatine, Illinois, Stephaine Heavey works from your home creating and promoting authentic styles for material dolls. And in Dallas, Lisa McElya published the Dallas Bash & Event Planners Guidebook from the entire first floor of her two-story home. These three men and women are living the new American dream of owning a company, but avoiding the high overhead and start-up costs of a commercial location. If the idea of working from your home is appealing, but you don't know where to begin, here is a step-by-step guide. STEP #1 DECIDE WHAT PART OF THE HOUSE TO USE Select an area away from family activity. The perfect space is a separate room (or perhaps the garage), but any area will do, if it can hold all the business supplies and equipment, and also provide enough operate space for desks, tables, or counters. STEP #2 DETERMINE HOW MUCH TIME YOU CAN SPEND ON THE Small business Many individuals start a home business on a part-time basis while raising children or working outside the property. Others start full-time when family and finances allow. However you begin, figure out how may hours per week you can devote to the business enterprise Make a weekly chart of your activities, examine it, and determine where the enterprise fits. Don't assume you have time and find out later you don't. STEP #3 DECIDE ON THE TYPE OF Business Make a list of things you like to do, your get the job done and volunteer experience, and items you own that can be used in a company. Look over this line-up, and using ideas from it, list possible corporations to start. Eliminate any business that isn't appealing or doesn't fill a need individuals have. For ideas on different types of firms, consult the end of this article. Other ideas can be found in the source material listed at the end of this article. STEP #4 CHOOSE A LEGAL FORM The three basic legal forms are sole proprietorship, partnership, and corporation. 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 enterprise, the easiest to start, and the least complicated to dissolve. Here are some of the advantages of this enterprise form: 1. You own all the profits
2. Your business enterprise is easy and cheap to organize. You don't need any government approval, although you may be required to carry a city, state or county license. Your only other obligation is to notify the Internal revenue Service (IRS) for the purposes of sales tax.
3. You're the boss
4. You enjoy certain tax savings. 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.
5. Greater personal incentive and satisfaction. Since you have your investment to lose if your enterprise is not successful, you should be extra willing to put time, thought, and energy into the company. And when your organization is successful, you enjoy maximum sense of accomplishment since you know its achievements was dependent upon your decisions about your management ability alone. For more information about this and other forms of small business, send for the U.S. Small Enterprise Administration (SBA) Publication MP25. Selecting the Legal Structure for Your Company (50 cents). It outlines the advantages and disadvantages of each legal type of structure. If after reading it you are still uncertain what form of the enterprise should take, consult an attorney. STEP #5 DETERMINE WHERE THE MONEY WILL COME FROM There are three ways to finance 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. also keep in mind that since you are a home-based, chances of qualifying for a loan or finding investors are slim until the achievement of your idea is proven. STEP #6 GATHER INFORMATION Spend a few weeks researching home-based organizations. A library or bookstore can provide numerous books on company basics, and on the specific type of organization that interest you. Homemade Money by Barbara Brabee (see sources) is an excellent book to start with. If you are considering a computer business enterprise, get in touch with the association of Electronics; Cottagers, P.O. Box 1738, Davis, CA 95617-1738. To keep informed of what is happening in home business world, contact Nationwide Home based business report, P.O. Box 2137, Naperville, IL 60566, for subscription information; and Mothers Home-based business Network, P.O. Box 423, East Meadow, NY 11554 (send SASE for free information). STEP #7 CHECK ON ZONING RESTRICTIONS Find out how your property is zoned, the call City Hall and ask what regulations apply to house firms in that zone. Also, if you rent or live in a condominium, check the lease or homeowner's association rules to be certain a home-based business is allowed. Generally, if you do not annoy your neighbors with excess noise, odors, and traffic, you will not be deterred from running a small business in the home. The neighbors may not even be aware of the enterprise, but it is necessary to know exactly what you can and can't do before you start. This is important should any problems or questions arise later. STEP #8 PICK A Business enterprise NAME AND REGISTER IT If the business you choose is different form your name, file an assumed (or fictitious) name certificate with the county. You are notified if another company already has that name, so you can select a new one. Do this before investing in expensive stationery and brochures. It costs only a few dollars to file, and it protects the enterprise name from being used by someone else in the county. STEP #9 WRITE A Business enterprise PLAN A good organization plan clarifies your ideas and establishes a plan of action. A good business enterprise plan should include a description of what you are marketing, your background and qualifications, who the prospective customers are and where they can be found, what is needed to build the organization, how you plan to promote, and how much money is need for start-up costs. SBA Publication #M925, The Business enterprise Plan for Home-Based Business ($1) is helpful. STEP #10 GET AN IDENTIFYING NUMBER If you are the sole proprietor of the small business and have no employees, you may either use your Social Security number or an Employee Identification Number (EIN) as the business enterprise number on official forms. If you have employees, or the business enterprise 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. You also use this tax number when your purchase items for resale. 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 company license, and most have special laws regarding the preparation and sale of food. Call City Hall to find out what is need for your particular business. In addition, Chamber of Commerce provide information on city, county and state licenses and permits. STEP #13 SELECT Organization CARDS, STATIONERY, BROCHURES Spend time on the color, design and paper for these items. They make a definite impression-good or bad- on the individuals that receive them. If you are not certain what is most suitable and effective, consult a graphics designer or a creative printer whose get the job done you like. STEP #14 OPEN A Enterprise CHECKING ACCOUNT Call several banks to find out what services they offer, and what minimum balance, if any, must be maintained to avoid paying a service charge. Also ask about credit card if you plan to offer this convenience to your customers. Bank fees can be significant, so shop around for the best deal. If your personal checking account is with a credit union, see if it can also provide a separate organization account. when you open your account, you may need to show the assumed name certificate and business enterprise license. Finally, investigate obtaining a credit card in the business's name. If this is not possible, set aside a personal credit card to use for business expenses. STEP #15 SET UP RECORD-KEEPING SYSTEMS Put together a simple and effective bookkeeping system with an 8 1/2 x 11" three-ring binder, columnar pad sheets and twelve pocket dividers from the office supply store. For each month, set up columnar sheets for income and expenses. Use a pocket divider for each month's receipts, bank statement, deposit tickets, and canceled checks. In addition, an automobile log for organization mileage, and filing system for correspondence, invoices, supplier catalogs, client records, etc. are two other useful tools. For extra information on record-keeping, see IRS publication #583, Information for Company taxpayers. STEP #16 CHECK IRS REQUIREMENTS If you comply with basic IRS guidelines, you can deduct a percentage of normal household expenses (mortgage, interest, taxes, insurance, utilities, repairs, etc.) as a business expense. see the box accompanying this article and, for much more detailed information, IRS publication #587, Business enterprise Use of the Home. Also become familiar with these IRS forms: Schedule SE (compensation of Social Security Self-Employment Tax) and Schedule 1040 ES (estimated Tax for Individuals). Depending on circumstances, you may have to file them. STEP #17 OUTFIT THE Business enterprise Make a list of everything needed to start the business, but before you buy anything, look within the house for things you already own that are usable. When you are ready to start purchasing, check the classified ads and garage sales. Both are good, inexpensive sources for office furniture, typewriters, computers, answering machines, etc. But only what is absolutely necessary for start-up, and wait until the business is off the ground to get the extras. STEP #18 DECIDE ON TELEPHONE REQUIREMENTS Call the telephone company to find out the cost of a organization phone in your area. If you cannot afford a separate business enterprise line, investigate the telephone company's regulations on using your personal phone in a enterprise. It may be possible to do this if you follow certain guidelines. Keep a record of long distance small business calls as they are a deductible expense. Finally, consider the benefits of an answering machine to catch calls when you are out. STEP #19 CHECK OUT THE POST OFFICE & UPS Using a post office box as the company 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, check out United Parcel Service (UPS), as it is less expensive than the Post Office. STEP #20 PURCHASE THE NECESSARY INSURANCE Check with your homeowners insurance agent about a rider for your existing policy or the need for a separate small business policy. Also make sure you have adequate personal and product liability coverage. Shop all around, as each company has different rules regarding property corporations To save money on medical insurance, join an association and participate in their group plan. One such body is The Nationwide association for the Self-Employed: they can be reached at 800-527-5504. STEP #21 ORGANIZE THE HOUSE & YOURSELF To have far more time for business enterprise, organize and simplify household routines. Start by holding a garage sale to get rid of unnecessary possessions. Next, have a family conference and divide household duties, making sure each person does his or her part. The, set up a planning notebook to keep track of appointments, things to do, calls to make, errands to run, shopping, etc. Finally, set up a perform schedule so you won't get sidetracked by TV, neighbor's visits, snacking, and telephone calls. Creating and operating a home business is a wonderful and rewarding challenge. The satisfaction is not only in the money earned, but in doing what makes you happy.
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