Starting a home business is a good option for new entrepreneurs as they can pursue their passion with freedom and maintain an excellent work-life balance. Being at home means flexible timing and more devotion for business which increases the chances for the business gaining quick traction. Starting a business at home follows the same template of business startups that consists of a business plan that includes a budget, arranging finance, and considering the business structure, explains Eric Dalius. Most home-based businesses are proprietorship businesses or one-man shows that can operate virtually and draw inspiration from legendary entrepreneurs like Steve Jobs and Steve Wozniak, the founders of Apple who started their enterprise from a garage in Los Altos.
Think about the legal complications, warns Eric Dalius
Before starting a home-based business, check the legalities about zoning in your area. Some strict zoning laws might prevent you from starting the business at home. Other zoning laws permit some businesses from home like legal or psychological counseling or setting up a coaching center that does not create noise or interrupt traffic. Focus on the business you are passionate about and do not compromise for the sake of starting any business from home.
Create appropriate boundaries to demarcate the office area from the domestic area and have a separate entrance to the office so that there is no interference to your professional work due to any overlap with the domestic work schedule.
Other legal considerations
After ensuring that your business complies with the local zoning laws, you must look at other laws at the local, state, and federal levels to decide on a business structure. The business structure determines the manner of filing taxes and the liabilities that you must shoulder in case of any legal issues. Since home-based businesses are usually proprietorship in nature, all liabilities rest on the owner. You might also consider other business structures like a partnership, a Limited Liability Company, and a corporation based on your consultation with an attorney.
Registering your business
Federal registration is not necessary for most small businesses, but to trademark your product or business, you must apply with the United States Patent and Trade Mark Office. The need for registering your business with the state depends on the business structure. To register your business with the state, you must file with a business agency or your Secretary of State. The structure of your business decides whether you need a registered agent.
The documents required for submission depend on the structure of the business. For example, to get an employer identification number, you must file with IRS, but only if you plan to employ people for your company. However, it is helpful for proprietorship firms to get an EIN, which you can apply online and complete the tax forms instead of using your social security number.
You may need a license for your business which varies according to the type of business.
Taxes for home-based businesses are more complex, but you can handle them by using a business tax program.