Thinking
About Starting A Home-Based Business?
Maybe
being home with kids is your dream job, but you still have the desire
to be in the business world. Well, you really can have it all and
without ever leaving home! Every year thousands of New Englanders start
home-based businesses. No matter what type of home-based business you
may be cooking up - being legally savvy is a key ingredient to success.
Just
about everyone who dreams about setting up a home-based business is
looking to create a perfect balance between work and family - and it
can happen. You can make money while keeping the business overhead down
or keeping an eye on the kids, but like every real business, you need
proper business and legal planning. So as soon as you have figured out
what your business is going to be, line up a small business attorney to
help you make it a reality. Here are just a few of the things you'll
need to consider:
1.
Carefully choose a name for your business. Do your research. Check with
your town and your Secretary of State's office to make sure the name
you're thinking of is available. If you're going to be doing business
on a national level, you may want to pay for a federal search. The last
thing you need is to set up your new business and then have some other
company's attorney send you a threatening letter or worse - sue you
because the name you choose is the same or too similar to that of an
existing business!
2.
Check to see if there are any zoning restrictions. Regulations vary by
city or town. If you are allowed to run a business from your home, you
may be restricted as to the percentage or parts of your home that can
be used, signage, parking - even the number of employees or customers
you can have going in and out!
3.
As with any business, check to see if you need one or more licenses to
legally operate your business. You may be surprised at what types of
business require a license. We're not just talking about home daycare
centers or hair dressing salons.
Once
you've done your homework and checked these things out, you need to
have a serious discussion about what type of business entity you are
going to have. You don't have to incorporate to have a business, but it
certainly is something to think about - especially if you want to try
and protect yourself and your personal assets! No matter what type of
business you are thinking about, before you open your doors, sit down
with an accountant and an attorney and figure what legal business form
is right for you. The simplest is a sole proprietorship or d/b/a, but
that can leave you and your personal assets wide open in case something
goes wrong. Unincorporated partnerships can even be riskier, because
there are more people to worry about. Very often, tax and legal
advisors recommend a C or S-Corporation, or a Limited Liability Company
(also known as an LLC). Each type of entity has specific legal and tax
implications so don't guess what is right for you - ask the
professionals. After you have identified what entity your business is
going to be, you and your attorney can make it happen. Your accountant
can help you get a tax ID number and get your books set up correctly.
In both cases, don't be afraid to ask what you can do to keep costs
down!
Having
a good insurance advisor is also just as important as having the right
attorney and accountant for your business. There are several insurance
issues to tackle including coverage in case you make a mistake,
coverage if someone gets hurt or your business property gets damaged,
automobile insurance if you use your car at all for business (even if
you personally own the car), and of course insurance the state requires
for employees if you have them. One thing people who start a home-based
business often forget to do is contact their homeowner's carrier to
tell them about the business! This can be a real problem because an
insurance company might terminate your coverage or refuse to pay a
claim if you don't disclose the fact you are running a business out of
your home. Many insurance companies will simply ask you to add an
inexpensive rider to your policy - but if they want more or refuse to
cover you, shop around!
Do
all your research, consider which type of business entity is the best
fit for your business, get the right insurance in place, and work with
a small business attorney and an accountant that understand what you
want to accomplish. And most importantly, remember to have fun getting
your home-based business off the ground! You also can take advantage of
some wonderful programs available for small business owners. The SBA
funds Small Business Development Centers to help people start and run
small businesses, all at no cost! Setting up a home-based business can
be a bit overwhelming, but the financial and personal benefits of doing
it right can mean a world of difference for you and your family.
Copyright
2008 - Law Office of Gina M. Ghioldi, P.C.
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