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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

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