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Home Based Business - Overview and Basics

Aug 18, 2007
So, you think that you're ready to start your own home-based business? Are you sure about that? While there are many benefits to running a business out of your home, all-too-often new entrepreneurs underestimate the amount of work, time and money it takes to make it a success.

Working from home doesn't mean working fewer hours or having it easier than starting a traditional storefront or office business. What it does mean is that you have less of a commute (but often longer hours), and often fewer overhead costs.

Before committing to nay solid business plan ask yourself if you can handle the unstructured environment associated with working from home. Are you a lone ranger who can take on a challenge and follow through with it without having a superior looking over your shoulder, or do you work better amongst a creative group of cohorts? Starting a business from your home can be very solitary and lonely; at least in the early stages. So, if you don't work well in a lonely environment, you may want to reconsider your options.

Next, think about the reasons why you want to leave the corporate environment. If it's to spend more time with your family, be honest with yourself about the time and energy it will take to get a new business off he ground. Unfortunately many people find that they actually work more hours, and spend even less time with their family when they switch from a normal office environment to a home based business venture. Be clear on your expectations about what you want and need from your nee home based working adventure.

Finances too are something you should closely consider. No matter what type of business you start from your home there will be a variety of expenses involved: inventory (if you're selling something); advertising & marketing fees; licenses and insurances; office furniture; computers; website design and maintenance and more. And don't forget the extra taxes! You will no longer be eligible for employer paid benefits such as disability insurance; unemployment; health and life insurances; social security taxes; vacation; sick time and personal days and more. While most employees kick in a portion of these costs, few have any idea how much their employer pays.

For instance, those who are self employed must pay nearly 16% in social security taxes alone, not counting other local, state, and federal taxes, plus all the other benefits listed above. Be sure you completely understand all the financial considerations of starting your own business before making your final decision.

Once you've considered whether or not you have the right personality and work structure to handle a more solitary work life and understand the financial burdens it may cause your family, then it's time to find out what types of licenses and approvals you may need to work from home. Many home based businesses never need municipality approval to use their home as an office, but if you are considering opening your home to clients as in the case of a daycare, or by giving music lessons, you may need to obtain special licenses and follow certain restrictions regarding signage, parking and the like. Always check with your local government authorities before setting up shop to be sure you are within your legal rights.

If, after handling all those concerns, you are still ready to start your own home-based business, then great, get started and good luck!
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