So, you've decided to take the plunge and start your own
home-based business. Congratulations! You're on your way
to true financial independence. Protect your business and
your livelihood by making sure you have paid proper
attention to the following:

1. Cash Flow

Do you have adequate working capital to support your
business (to support you!)during its early stages? Have you
started your business part-time while continuing to work
full-time to make sure it is a viable income producer for
you and that income is adequate for your needs? DON'T give
up your day job until you can give an unequivocal YES to
these questions.

2. Business Licensing

Have you obtained all necessary licenses and registrations
for your business? Do you comply with ACRA and governemnt agencies
regulations? This is especially important for both legal and
insurance reasons if you expect to have clients visit your
home office.

3. Insurance

If you expect to have clients visit your home office, have
you taken out insurance in case they are injured on your
premises? Your normal homeowner's insurance will NOT cover
business visitors unless you notify your insurance company
that you are operating a business from home and the insurance
company endorses your policy to include this risk.

In all other cases you should take out a separate policy
to cover your business visitors. In this regard, whether
you comply with local zoning regulations may be important.
Your insurance company may refuse to cover you if you are
conducting your business illegally. For these reasons it
is imperative that you obtain all proper registrations and
licenses for your business.

Another type of insurance you should take out is public
risk insurance. No matter the nature of your business,
if you are dealing with other people (and what business
isn't?), you should have public risk insurance to cover you
in case of a claim for negligence.

A third type of insurance to consider is income protection
insurance. If you have made the transition from paid
employment to self-employment, you no longer have the
benefits that went along with your paid job which may have
included disability or income protection insurance. You will
need to purchase this cover for yourself.

4. Benefits

Once you have left the paid workforce, you may find that you
have also left behind your medical, dental and optical
benefits. You need to make sure you purchase adequate
insurance for these expenses.

5. Accounting and Tax Advice

The best time to seek accounting and tax advice is before
you start your new business. Your accountant will be able
to advise you about things such as the most tax-effective
structure for your particular business and what types of
expenses you can claim against your business income. It is
important to obtain this advice at the beginning of your
business venture so you know exactly what records you should
be keeping and whether it is best for you to purchase or
rent capital equipment such as your computer.

6. Time Management

Make sure you have thought through how you will deal with
the day to day distractions that will come up when you work
from home and plan accordingly. For example, if you know
you will not be working from 3:00 pm until 8:00 pm because
this is the time between when your children return from
school and when they go to bed, try to schedule as many
non-business activities for this time period as possible
rather than taking breaks during your business hours. Need
milk? Get it when you're out picking the kids up from
school, not at 11:00 am because it's easier than starting
that new webpage. Remember, self-discipline is your best
friend and vital when working from home. Procrastination,
on the other hand, is your greatest enemy.

Working from home is the dream of many. Don't let that
dream turn to ashes by overlooking the "basics" of sound
business and risk management.

Some helpful tips for your Home Business

When starting out on your path to financial independence and freedom from the rat race that a Home Business can provide, there is some conventional pieces of wisdom to consider to help guide you from those that have gone on this journey before you. While you will probably blaze a trail in a way that is unique in it's own way, there are nonetheless some tips that can help anyone that is starting their own business. The first tip regards your taxes: Be careful that you do not over deduct. A good rule of thumb is that deducting expenses which are equal to around 60 percent of your income, or more, may be inviting a tax audit. Another important thing to remember in this vein is that if you employ anyone, be sure to pay all the applicable taxes. You must pay unemployment tax, Social Security and Medicare, and of course withhold federal and state income tax. Another tax tip is to be aware of offer-in-compromise. If you are behind on your personal income taxes, you may be able to get caught up fairly easily with this program. If you are just starting your business and are not a Corporation, you are well advised to form one, in my firm opinion. There are too many tax advantages not to and perhaps more importantly, you cut down your personal liability to virtually zero. Just talk to a competent professional about which type of corporate entity is best for your needs. When choosing where to incorporate, The majority of Home Businesses are advised to incorporate in a State in which they do the greatest part of their business. Out-of-State incorporation usually results in additional taxes and/or fees. But not setting up a corporation is perhaps one of the the biggest mistakes you can make. As previously mentioned, a corporation is your shield from personal liability and business debts.

Another important facet of success for your Home Business is to have a Mission Statement. This is like your business philosophy, ultimate goal, and long term plan rolled into one. It will be your guiding light and motivation in dark times. One way to look at a Mission Statement is to consider it the spiritual side of your business. All entities have (or should have) spirits, including your Business. Just do it. A Mission Statement for a real estate development business could be "To provide affordable housing to the maximum number of people", for example. Businesses that have clear goals and a clear mission Statement have a better chance of success than businesses that do not, in my opinion. Remember that once you write out your mission statement, it is not set in stone. You can take it out and modify it from time to time. Have a meeting with the other members of your business and decide which Mission Statement is right for you.