Thursday, 5 September 2013

21 STEPS TO HOME BUSINESS SUCCESS




Fifty million home-based businesses will be in operation by 1997,



according to Link Resource's National Work-at Home Survey. All



around the country, people who want more control over their lives



are starting home businesses





In New Orleans, Rick Hart's home based cajun Cargo ships seafood



nation wide. In Palatine, Illinois, Stephaine Heavey works from



home designing and selling original patterns for fabric dolls.



And in Dallas, 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 new American dream of owning a



business, but avoiding the high overhead and start-up costs of a



commercial location. If the idea of working from 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 work space for desks, tables, or counters.





STEP #2 DETERMINE HOW MUCH TIME YOU CAN SPEND ON THE 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 business



Make a weekly chart of your activities, examine it, and determine



where the business 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 work and volunteer



experience, and items you own that can be used in a business.



Look over this line-up, and using ideas from it, list possible



businesses to start. Eliminate any business that isn't appealing



or doesn't fill a need people have.





For ideas on different types of businesses, 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, the easiest to



start, and the least complicated to dissolve. Here are some of



the advantages of this business form:





1. You own all the profits



2. Your business 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 business is not successful, you



should be more willing to put time, thought, and energy into the



business. And when your business is successful, you enjoy maximum



sense of accomplishment since you know its success was dependent



upon your decisions about your management ability alone.





For more information about this and other forms of business, send



for the U.S. Small Business Administration (SBA) Publication



MP25. Selecting the Legal Structure for Your BUsiness (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 business 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 success of your idea is proven.





STEP #6 GATHER INFORMATION



Spend a few weeks researching home-based businesses. A library or



bookstore can provide numerous books on business basics, and on



the specific type of business that interest you. Homemade Money



by Barbara Brabee (see sources) is an excellent book to start



with.





If you are considering a computer business, 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 National Home Business report, P.O. Box



2137, Naperville, IL 60566, for subscription information; and



Mothers Home 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 home businesses 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 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



business at home. The neighbors may not even be aware of the



business, 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 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 business 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 business



name from being used by someone else in the county.





STEP #9 WRITE A BUSINESS PLAN





A good business plan clarifies your ideas and establishes a plan



of action. 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 promote, and how



much money is need for start-up costs.





SBA Publication #M925, The Business Plan for Home-Based Business



($1) is helpful.





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. 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



business 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 BUSINESS CARDS, STATIONERY, BROCHURES





Spend time on the color, design and paper for these items. They



make a definite impression-good or bad- on the people who receive



them. If you are not certain what is most suitable and effective,



consult a graphics designer or a creative printer whose work you



like.





STEP #14 OPEN A BUSINESS 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 business account. when you open



your account, you may need to show the assumed name certificate



and business 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 business mileage, and filing



system for correspondence, invoices, supplier catalogs, client



records, etc. are two other useful tools.





For more information on record-keeping, see IRS publication #583,



Information for Business 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 more



detailed information, IRS publication #587, Business 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





Make a list of everything needed to start the business, but



before you buy anything, look around 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 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. 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 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, 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 business policy. Also



make sure you have adequate personal and product liability



coverage. Shop around, as each company has different rules



regarding home businesses





To save money on medical insurance, join an association and



participate in their group plan. One such body is The National



association for the Self-Employed: they can be reached at



800-527-5504.





STEP #21 ORGANIZE THE HOUSE & YOURSELF





To have more time for business, 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 work 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.







SOURCES





SMALL BUSINESS ADMINISTRATION. Pamphlets mentioned in this



article are available by calling the nearest SBA office or



ordering from SBA, P.O. Box 15434, Ft. Worth, TX 76119.





NEWSLETTERS





HOMEWORKING MOTHERS. Mothers' Home Business Network, dept. 10-6,



P.O. Box 423. East Meadow, NY 11554: sample available for $2 and



SASE.





NATIONAL HOME BUSINESS REPORT, Barbara Brabec Productions, Dept



10-6, P.O. Box 2137, Naperville, IL 60588; $18/year, quarterly.



(Sample issue, $4.00)





BOOKS, REPORTS





ELECTRONIC COTTAGE HANDBOOK #2 MAKING $$ WITH YOUR HOME COMPUTER



by Lis Fleming. Fleming, Ltd., P.O. Box 1738, Davis, CA



95617-1738; $7.00 ppd.





HOMEMADE MONEY by Barbara Brabec, Barbara Brabec Productions,



P.O. Box 2137, Naperville, IL 60566; $16.95





HELP FOR YOUR GROWING HOMEBASED BUSINESS by Babara Brabec.



Barbara Brabec Productions, P.O. Box 2137, Naperville, IL 60566;



$13.45.





THE #1 HOME BUSINESS BOOK by George and Sandra Delany. Liberty



Publishing Publishing Co. Inc., Dept 10-6, 50 Scott Adam Rd.,



Cockeysville, MD 21030; $4.95.





THE COMPLETE WORK-AT-HOME DIRECTORY AND IDEA BOOK. E.A. Morgan



Publishing Co.,Dept. 10-6, P.O. Box 1375, Huntington, NY 11743;



$15. (Includes free report: " The Legalities and Tax Advantages



In a Home Business.")





THE WORK-AT-HOME SOURCEBOOK by Lynie Arden. Live Oak



Publications, Dept. 10-6, 6003 N. 51st Street, Suite 106,



Boulder, CO 80301; $13.95





STAY HOME AND MIND YOUR OWN BUSINESS by Jo Frohbieter-Mueller.



Betterway Publications, Box 219, Crozet, VA 22932; $11.45





101 BEST BUSINESSES TO STAR by Sharon Kahn & The Philip Lief



Group (Doubleday, 1983, $19.85). Many of the businesses profiled



are suitable for running at home.





ASSOCIATIONS





AMERICAN HOME BUSINESS ASSOCIATION, 60 Arch St.,Greenwich, CT



06830.





NATIONAL ALLIANCE OF HOME-BASED BUSINESS WOMEN, Dept. 10-6, P.O.



Box 95, Norwood, NJ 07648; $30 annual membership.





NATIONAL ASSOCIATION FOR THE COTTAGE INDUSTRY, Dept. 10-6 P.O.



Box 14850, Chicago, IL 60614; $45 membership.

No comments:

Post a Comment