21 Steps to Home Business Success - Part 1
All around the country, people who want more control over their lives
are starting home businesses. The steps below will help you get started down the right path.
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.
21 Steps to Home Business Success - Part 2
