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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