How To Set Up a Home-based Business

Home-based businesses are fast becoming a popular way to operate your small company, while reducing expensive start-up costs such as leasing space, lease hold improvements, utility and phone deposits and major office equipment.

Thousands of people across the country are finding that working from home provides them with the advantages of earning an income with the flexibility to work when it is best for them and take care of family and other responsibilities that often arise throughout the work day.

However, before starting your home-based business, consider the following advice:

• Determine local and state requirements for licensing and zoning regulations. Be sure to check with your local zoning office to find out how the zoning regulations in your area may affect your business plans. Determine if your business requires any licenses and file the necessary forms.
• Rent a post office box and use that address on your promotional mail and stationery, doing this will make it less obvious that you are working from home. The professional image you portray is very important to your clientele.
• Install a phone line in your home dedicated to your business.
• Use an answering machine for incoming business calls.
• Organize your work space with great care. Make sure that you have sufficient space to meet your needs.
• When scheduling appointments with clients, consider meeting at your client's office or renting a conference room to maintain a professional image.
• Establish contacts with your competitors and join associations pertinent to your business. Have your clients suggest possible new clients and ask if they will recommend you.
• Keep excellent records of entertainment and travel expenses. The Internal Revenue Service (IRS) tends to audit home-based businesses more frequently—especially when they are writing off a variety of expenses, including the percentage of the mortgage or rent for your office space. There are several good record keepers such as Day Timer®, Franklin Quest® and Day Planner that will help you keep track of your expenses. Your accountant, a CPA is recommended, can advise you on deductions you can take and records you must keep for the IRS.
• And above all, put some of your earnings into a savings account for those times when your business is in a slump . . . and it will happen.
• Discipline yourself. You must be a self-starter and follow a routine, just as if you were working for any other business. In many cases, you are the only person you can rely on to get the job done. Unless it's an emergency, do not baby-sit or chat with your neighbors.

Brought to you by SCORE, America's small business mentors, at www.score.org.

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