Event: Starting your home-based business ...

BigIdeas4Biz 50 posts since
Feb 7, 2008

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15. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:16 PM

in response to: Interpreter

No one knows for sure because the IRS doesn't say. However, if you meet the requirements for claiming a home office deduction (e.g., it is your principal place of business and you use the space regularly and exclusively for business) and you have good records of the expenses, then even if you are questioned, you'll win. It's a good idea to take a photo of your home office to show that it's used for business and isn't just the kitchen table.

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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16. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:18 PM

in response to: KyAnnadesigns

A small business owner needs to stay focused in order to deal with the myriad of responsibilities that arise everyday. One way to help complete tasks on time is to schedule them and refer to your schedule throughout the day. Use a BlackBerry, Outlook Express, or any other scheduling tool which allows you to easily input your activities and receive reminders.

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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17. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:20 PM

in response to: KyAnnadesigns

Being organized is important to running a home-based business. You need to find space in your home that can accommodate your business activities. You can't squeeze a size 10 foot into a size 5 shoe, so if your home doesn't have the room, your business may not be workable there. However, there are many space-saving items to help you fit is limited space. For instance, consider getting an all-in-one machine to print, copy and fax rather than separate machines. Check out organizers and space savers at office supply companies, such as Staples.

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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18. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:24 PM

in response to: KyAnnadesigns

Business owners can't fly off in a million directions; it wastes time and money. To be more focused and weed out false starts in the wrong direction, it can be helpful to use an advisory board, a group of business experts who can act as a sounding board for your ideas as well as a resource providing their own suggestions for business direction and growth. If you go it alone, you'll need to evaluate every idea before investing time and money in it. Decide whether it makes business sense and it not just a neat idea that you might enjoy.

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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19. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:29 PM

in response to: Elite1

There are several types of business entities. The most common are sole proprietorship, partnership, limited liability company (LLC), S corporation, and C (regular) corporation. The decision on which entity to use depends on several factors. For example, if you want personal liability protection so business creditors can't touch your home and other personal assets, you'll need to use an LLC or a corporation (C or S). The number of owners may also impact your decision (you can't be a partnership if you're the only owner). Other factors that come into play include state income tax treatment, audit risk (the IRS audits certain entities more than others), and access to certain fringe benefits. Most home-based businesses are sole proprietorships while LLCs are the most popular choice for new businesses in general; these may not be the best choice for you.

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SBOCTeam 328 posts since
Jul 27, 2007

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20. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:31 PM

We're half way through the event with Barbara. Don't be shy, ask a question about starting YOUR home-based business!

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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21. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:32 PM

Keep it legal
Before starting a home-based business, make sure you're allowed to operate from home. It depends, of course, on the type of work you'll be doing. For a freelancer writer, there's no problem; someone detailing cars in their front yard may have issues with the town. Check local zoning rules to be certain. If you live in a community, check homeowner's association rules. Also check rules on posting business signs (there may be limits on size, location, etc.).

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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22. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:37 PM

Protect your home
If your business computer, inventory or supplies are destroyed during a fire or other disaster in your home, are you protected? If a customer to your home slips on the steps and is injured, do you have liability protection for this? Check with your homeowner's policy; usually business property isn't covered or there are strict limitations, and business guests may not be covered either. Talk with your insurance agent. You may be able to add onto your current homeowner's policy (for only a few dollars) to cover your business. Or you may want to purchase a business owners policy (BOP) to maximize your coverage.

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Tori 79 posts since
Aug 15, 2008

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23. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:39 PM

Hi Barbara,

Thanks for making your second appearance on the SBOC! I was hoping you could answer some of the questions in the original post.

What additional expenses should I have to take into account? (e.g. health insurance) What savings can I immediately see when working from home? If I have more than one great idea for a home-based business, how do I choose which one to go with? How do I separate business from my personal life?

~Tori

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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24. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:44 PM

in response to: Tori

When you start a business from home, be sure to have health insurance coverage. Many people who start home-based businesses do so after they leave a job and continue their coverage through COBRA. This only lasts 18 months and can be costly, so don't automatically sign up for COBRA before looking into other options. Check on availability of coverage through a spouse or domestic partner, as well as through local chambers of commerce and business or professional associations. Also talk with an insurance agent who can help you find coverage. Consider, for example, a health savings account (HSA), which combines a high-deductible (low cost) health plan with an IRA-like savings account. The cost of the insurance as well as contributions to the HSA (within the limits allowed by law) are fully tax deductible.

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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25. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:47 PM

in response to: Tori

Operating from home can save you money to start up and run your business. You save on rent and utilities; you're already paying for your space (and you get a start write-off in the form of a home office deduction). You save on commuting costs. You may also save on work clothes, lunch expenses, and other items you needed to pay for when you worked outside the home.

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Vince 91 posts since
Aug 15, 2008

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26. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:48 PM

Barbara,

It seems as though you are very well-rounded when it comes to small business topics. How do you stay so well-informed on the subjects? Do you subscribe to news feeds? Belong to business associations or organizations?

Thanks Vince

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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27. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:53 PM

in response to: Vince

Thanks for your kind words. It's a daily chore to stay up on small business information.. Many of my resources are from government agencies, like the IRS and Department of Labor. I also belong to several small business advocacy groups that send out emails and other information. And, because I publish an e-newsletter, Big Ideas for Small Business, and an Idea of the Day, public relations firms and companies send me information on new products and developments. I translate what I've learned into information that I publish. You can subscribe for free to my information at www.barbaraweltman.com.

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BigIdeas4Biz 50 posts since
Feb 7, 2008

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28. Re: Event January 27: Starting your home-based business Jan 27, 2009 2:58 PM

in response to: Tori

Separating your personal life from your business life within the confines of your home is challenging. There's always temptation to attend to a personal chore during business hours (working too little) or to visit the home office 24/7. To be successful when working from home, you need to find a balance. It's helpful to set regular hours (whatever works for you) and stick with it. A separate phone line for business is a good idea. And educate your family that you aren't to be disturbed while working (this is easier said than done).

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SBOCTeam 328 posts since
Jul 27, 2007

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29. Re: Event January 27: Starting your home-based business Jan 27, 2009 3:04 PM

Barbara,
On behalf of the Community, we truly appreciate your time today as well as your professional responses.

Community,
Although our time with Barbara has concluded, feel free to discuss today's event amongst yourselves and feel free to leverage Barbara's responses in your small business. And don't forget, for more information about Barbara, please visit http://www.barbaraweltman.com

Thanks again!
The SBOC Team

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