10 Steps Before Starting a Home Business
Starting a business is a major decision that requires advance planning and preparation. Your have a greater chance of success when you research the required steps beforehand. Home businesses must address special issues, such as deed restrictions, traffic impact studies and zoning laws, since they are in a residential area. Even with these additional restrictions, half of all American companies are home businesses, according to Business.gov.
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Write a Business Plan
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Write a business plan that states the purpose and goals of your company along with your plan for achieving the goals. You need a detailed business plan to accompany the application if you are applying for start-up financing at the bank.
Learn Management Skills
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Take any necessary classes to learn the management tasks required of all business owners. Some topics that you need to understand are bookkeeping, budgeting, how to market your products or services as well as laws and zoning regulations that affect your home business.
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Choose a Location
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Choose a location for your business within your home. If you plan to claim the home office deduction when filing your taxes, then speak with an accountant about the requirements. Additionally, homeowner association, zoning or Fire Marshal regulations may restrict your home business activities to one part of the house.
Estimate Start-Up Costs
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Estimate your start-up costs and obtain financing, if necessary. Otherwise, decide how you will pay the expenses of running the company until it earns a profit.
Choose a Business Structure
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Choose a business structure that meets the goals of your company. It is expensive to change the business structure a few years later. Seek the advice of an attorney familiar with start-up businesses and their implications on your personal assets.
Register the Business Name
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Register the business name with the appropriate government authorities. Have a second choice name ready in case your first choice is already taken. You may have additional requirements if you plan to operate under a fictitious name.
Federal Tax Identification Number
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Obtain a federal tax identification number from the Internal Revenue Service. Find out if you are required to pay quarterly taxes and when they are due.
State Tax Identification Number
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Obtain any necessary state tax identification numbers, depending on the laws in your area. Additionally, find out if you need to register this number with the city or county government.
Licenses
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Pay the necessary fees for any occupational, professional or business licenses or permits required for your type of home business. Your regulating authority may do a home inspection.
Employee Laws
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Learn about your tax and legal obligations if you plan to hire employees. An attorney can advise you about the laws in your state.
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References
- Photo Credit business lady image by Paul Moore from Fotolia.com
