How to Start a Home Business in Illinois
A 2010 report by International Data Corporation estimates that by 2013 75.5% of the workforce in the U.S. will be mobile. These statistics indicated that working from home or out of a non-traditional office is quickly becoming a standard business practice. The State of Illinois supports them with grants, loans, and other services to encourage their establishment and expansion.
The Illinois Department of Commerce and Economic Opportunity and the Illinois State Treasurer's Office are examples of some of the Illinois departments that administer these business incentive programs. The Illinois Department of Commerce and Economic Opportunity administers some of these programs including the Illinois Capital Access Program (CAP) designed to encourage financial institutions to make loans to new business that would not qualify under conventional lending practices. The Illinois State Treasurer's office offers a number subsidized low-interest loans to small businesses for start-up or expansion.
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Things You'll Need
- A business plan
- A tax Accountant
- Accounting Software
- Time to apply for loans, permits, insurance, and licensing
- Space for a home office and business storage
Instructions
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Business Considerations
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Write a business plan for success. A business plan will help define the home business' service or product line. The home business plan will help uncover hidden costs and regulations involved in starting a home business. For example, home business in Plainfield must register their home office with the city government. Lenders request a business plan as part of the application process, so a home business plan is critical to get home business financing. The state of Illinois offers free help and government incentives for home business start-ups through their business web portal.
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Hire an accountant and organize the home business' finances. A home business must pay taxes on incoming revenue. Hiring a good tax accountant will assure that your business is set up to take advantage of all business and home business tax deductions available to them. A good account will help set up the home business' account files by recommending an accounting software package that is right for the home business. An accounting software package will provide accurate accounting and help with year-end tax planning.
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Home business must comply with all levels of Illinois regulations and licensing. This includes state, county, and city. The Illinois Department of Regulation provides home business with the licensing and regulatory information needed to apply for a business license if necessary. For example, someone running a beauty salon out of their home must also comply with the same regulations and licensing as store front location.
In addition, Illinois counties and cities also have local regulations and licensing pertaining to a home business. It is important to contact the local city and county offices for this information. Individuals living in an area with an association must also abide by the associations rules about home businesses.
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Buy business insurance. Business insurance is often overlooked when setting up a home business, but it is a vital way of protecting personal assets in case of litigation. Business insurance is also required for state licensing in professions, but any home business that welcomes customers into the home business needs business insurance. Ask you homeowner's insurance agent if they have home business insurance riders or if they sell business insurance separately. If they do not sell business insurance, your homeowner's insurance agent can recommend a business insurance agent.
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Organize the home office. The U.S. Internal Revenue Service is very specific about what is considered a home business or office. Deductions also change each year, so it is wise to review the home business deductions prior to setting up your office. The IRS Publication 587 for Home Business Tax Deductions is an excellent source of information to help set up your office with the maximum amount of tax deductions. Items such as telephone systems, computers, office furniture, shelving, and office supplies are all tax deductible. Another tax deduction is the rental of a post office box (P.O. Box). A P.O. Box is highly recommended for Internet home businesses for personal safety and privacy.
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References
Resources
- Photo Credit at home office image by Pix by Marti from Fotolia.com
