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Home-Based Businesses

Going to work used to mean traveling from home to a plant, store or office. Today many people do some or all their work at home.  Garages, basements and attics are being transformed into the corporate headquarters of the newest entrepreneurs – home-based business owners.

Getting Started

Before diving headfirst into a home-based business, you must know why you are doing it.  To succeed, your business must be based on something greater than a desire to be your own boss.  You must plan and make improvements and adjustments along the road.

Ask yourself these questions – and remember, there are no best or right reasons for starting a home-based business.  But it is important to understand what the venture involves.

Working under the same roof where your family lives may not prove to be as easy as it seems. It’s important to work in a professional environment. One suggestion is to set up a separate office in your home to create this professional environment.

Ask yourself:

·         Can I switch from home responsibilities to business work?

·         Do I have the self-discipline to maintain schedules?

·         Can I deal with the isolation of working from home?

·         Am I a self-starter?

Finding Your Niche

Choosing a home business must be approached carefully.  Ask yourself:

·         Does my home have the space for a business?

·         Can I identify and describe the business I want to establish?

·         Can I identify my business product or service?

·         Is there a demand for that product or service?

·         Can I successfully run the business from home?

Legal Requirements

A home-based business is subject to many of the same laws and regulations affecting other businesses.

Some general areas include:

·         Zoning regulations. If your business operates in violation of them, you could be fined or shut down.

·         Product restrictions.  Certain products cannot be produced in the home.  Most states outlaw home production of fireworks, drugs, poisons, explosives, sanitary or medical products and toys.  Some states also prohibit home-based businesses from making food, drink or clothing.

Be sure to consult an attorney and your local, city and state departments of labor to find out which laws and regulations will affect your business.  Additionally, check on registration and accounting requirements needed to open your home-based business.

You may need a work certificate or license from the state.  Your business name may need to be registered with the state.  A separate business telephone and bank account are good business practices.

Also remember, if you have employees you are responsible for withholding income and social-security taxes, and for complying with minimum wage and employee health and safety laws.

If you’re convinced that working from home is for you, it’s time to create your business plan.  The SBA and its resource partners, such as SCORE, SBDCs and WBCs can help make the process easier.

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