6 Things to Consider When Starting a Home Business
Statistics show that nearly half of all NEW businesses are based out of the owner’s home. But while many entrepreneurs dream of working from home, few actually do it. If you’re thinking of starting a Home-Based Business, you should consider the following:
What TYPE of Home Business do you intend to start? This is undoubtedly one of the most important decisions to make when starting a business. Some entrepreneurs choose businesses based solely on earning potential, turning a blind eye to what really matters: passion. If you aren’t passionate about your idea, you’ll lack the motivation to follow through with it. Only choose a business that you enjoy, because as the saying goes, “Do what you LOVE and you’ll never work another day in your life“.
Just because you run your business from home doesn’t mean you should overlook the importance of using the right business structure. As explained by the Small Business Administration (SBA), nuances between the different business structures have both tax and legal implications. If you don’t choose a specific structure, your business will operate as a Sole Proprietorship. This single-person structure is the easiest to use, although it has some caveats. Sole Proprietorships offer no legal protection of personal assets. If someone sues your business and wins, they could take your personal assets. This is why many business owners prefer alternative structures, such as Limited Liability Company (LLC), Partnership or S-Corp, ALL of which provide greater protection of personal assets from business liabilities.
Depending on where you live, you may need a Business License and/or other Permits when running a business from your home. This serves two primary functions: it protects the residents by identifying and regulating businesses operating in their area, and it generates revenue for the government. Check with your local city planning office for more information on how to obtain a Business License, if it is necessary. Business owners typically pay a small upfront fee for a license (around $20 to $100), after which they must renew it annually. Failure to obtain and maintain an active Business License could cost you hefty fines, or in some cases, a temporary ban on your Home Business.
Does your Home-Based Business have room to grow? It’s always good to have an optimistic view when jumping into a new business. Hopefully, your idea grows into large, successful business that dominates its niche. With that said, some ideas have limited room for growth and expansion. Choosing one of these ideas ultimately defines the limits your success.
How do you plan to FUND your Home Business? Whether it’s Online Marketing, drop-shipping, graphic design, e-commerce, etc., you’ll need capital to get your business up and running. According to a 2009 study conducted by the Kauffman Foundation, the cost for starting a business is roughly $30,000. Of course, some businesses require more capital, while others require less. Some of the most common funding options for Home-Based Businesses include the following:
- Personal cash
- Personal credit cards
- Draw from your 401(k)
- Small Business Loans
- Angel Investors
- Crowd Funding
Keep in mind that some financing options force you to give up partial ownership of your business. Angel Investors, for instance, typically want a share of your business in exchange for capital. Opting for a Small Business Loan, on the other hand, does not require you to give up partial ownership.
You’ll also need a PLAN for tracking income and expenses. It’s no secret that many small businesses fail because of poor or non-existent bookkeeping. Even if you have bank records showing how much money comes in to your business and how much goes out, you still need receipts of business-related purchases; otherwise, you can’t deduct them on your taxes.
For more information about Home Business Start Up opportunities you may want to consider, feel free to visit us today at OmniTech Enterprises, LLC. We teach digital entrepreneurs how to start and grow a profitable Online Marketing business with our unique training & coaching products and world-class live events. Not to mention that we also help to support small business entrepreneurs worldwide who need funding to manage or grow their businesses. For more ideas, please peruse our Blog site http://OnlineMarketingHomeBusiness.com today. We look forward to hearing from you, and assisting you in the best way possible.