Whether you need extra money to supplement a full-time income, or are a stay-at-home parent looking to make some extra cash, a home-based business offers benefits, and may even grow to a full-time income. A well-conceived home business can help you financially and provide you with the satisfaction of doing it yourself.
Choosing a Business
If you have a particular skill or interest with the potential to earn income, you are on your way. If you are unsure what makes business sense, then explore your opportunities. Take an inventory of your skills and interests. If you want a service-related business, you could be a freelance writer, blogger, accountant, virtual assistant or call-center operator. If you have handicraft skills, your options range from cooking dog treats to sewing baby clothes, and more. The opportunities are seemingly endless. Pick your idea and develop a plan to see how it will unfold before you take the first steps.
Only you can decide if you are suited to pursue a home-based business. You must ask yourself how well you deal with interruptions -- how you will handle the dog barking while you are on the telephone, and what to do with your preschooler who wants attention. You must also be able to resist the temptation to go outside on a pretty day or spend an hour with a friend at the coffee shop. Your own business is unstructured and it is up to you to make it work.
Before you launch your home-based business, you must address some logistical considerations. Check to see if there are zoning codes that will prevent you from working out of your home. If your business is freelance writing or bookkeeping, it probably will not matter, but if you operate a child-care service where parents will be coming and going, there may be restrictions. Consider the neighborhood and whether your business will generate any complaints. You will also need to decide how much space your business will occupy in your home. You may need to add a land-line telephone for the business.
When you open a business, you will need a business license from your local government. You will also need to apply for a federal ID number for tax purposes. While you can operate as a sole proprietorship, incorporating offers advantages if you are in danger of being sued. And if that is the case, then you will need liability insurance. Check your homeowners insurance to see what it covers and excludes. As you begin to earn money, you will need to file estimated federal taxes quarterly, and if you sell products, you will have to process state income taxes