Home based businesses are a fast growing trend as more people want to have a better work-life balance, reduce time to commute and prefer to be their boss. Technology has helped this trend as businesses can now function from anywhere in the world. Here are some tips to help you start a home-based business.
Do you need a permit or license? – Check with your local municipalities and neighborhood to find out if they require any special permits or licenses to start a home-based business.
Does your homeowner’s insurance cover a home-based business? – Most home insurance policies will not cover home-based businesses. You could, however, check with your insurer on how you could add your home-based business to your current policy.
Establish your legal structure – Most home-based businesses are sole proprietorships and therefore will not require any formal legal documentation.
Establish professional business practices – Avoid mixing your business income and expenses with your own. Open a separate checking account and a credit card for your business dealing. It is also a good idea to set up a bookkeeping system to keep track of your business’s financials. If you are taking the home business tax reduction, the chances are that the IRS will audit your home business. Therefore, ensure that you keep excellent track of your business activities and transactions.
Consider security – It is a good idea to rent a separate post office box for business mailing purposes. A separate post office box will mean that people and other businesses will not know where you reside.