Small Business
Home Based

Home Work
Working independently at home appeals to many people!
In fact, the Small Business Administration estimates 7.4 million home business owners – including those with a side business – and 7.2 million freelance workers, total 14.6 million home-based businesses operating in the United States. The majority of these business owners are women (54.6%) and if you add tele-commuters and full time workers who do some work at home, it becomes apparent that working from home is a meaningful option.

Is it for me?
Before you turn that guest room into your corporate office, you must know why you are motivated to work at home… Ask yourself these questions
Is it the type of business that can be successfully run from my home?
Is there a demand for my product or service?
Do I have the self-discipline and motivation it takes to be my own boss?
Does my family understand what working at home means?
Can I deal with the isolation from peers and colleagues?
Will the home office image affect my business image?
Does our home have the space for a business?
What advantages do I have over my competitors?
Do I have enough capital for start-up costs?

Many of the issues facing home-based businesses are similar to those experienced by small business owners, such as writing a business plan, obtaining financing, planning for marketing and hiring employees.

Legal Requirements
Home-based businesses are subject to many of the same laws and regulations affecting other businesses. Following is a general overview, however, you are well advised to consult an attorney, an accountant and the relevant county and state departments before you proceed.

Be aware of your city’s zoning regulations. If your business operates in violation of existing regulations, you could be fined or closed down.
Certain products cannot be produced in your home. Consult an expert before you begin.
Review any home occupation business license needed from the city, county and/or state.
A sales tax number must be obtained for many businesses.
Your business’ name must be registered with the state, even if you are a sole-proprietor.
A separate business telephone and bank account normally are required, or at least highly recommended.
Your current house and liability insurance may not be sufficient to cover your home office. Check with your agent.

Taxes
The Taxpayer Relief Act of 1997 has expanded the home-business deduction. Beginning in the 1999 Tax Year, you can qualify for a home-office decduction even if you work from home instead of at home. The new law still requires two conditions in addition to the exclusive and regular use tests that have always applied:
You must use your home office for administrative or management activities
You may not conduct substantial administrative or managerial activities anywhere else.

For more information, check out the IRS website at www.Irs.ustreas.gov/prod/bus_info.

Home-based business taxes can change each year, so check with your accountant.

Other Resources
www.sba.gov
www.ivillage.com/work/
www.smalloffice.com
www.hoaa.com/
www.gohome.com
www.hellosoho.com
www.homeofficemag.com
www.bizoffice.com/homebased
www.yourhomebiz.com