A home based business often represents the ultimate in personal freedom for many people. A control over their work hours, their income and even time spent with their family. The lure of no more commutes, no crazy bosses or office politics and perhaps even the ability to live and work from anywhere in the world often drives many people to make the jump.
However, there are some pitfalls that must be avoided to have any chance at successfully running a home business, particularly a home business online. Some of these will be related to staying motivated and keeping your productivity high, some will be basic business related procedures that you may have not been familiar with if you weren’t managing a business or have previous business ownership experience.
I’ll break these down into manageable pieces through my articles here and talk about why some of these seemingly mundane tasks can hold the keys to your business on line success or failure. So stay with me, we’ll make it as painless as possible and I invite you to join me in social media (links at the bottom of the page) to ask your questions and further the conversation about how a home based business online can work for you!
Let’s begin by setting the stage for receiving income, the goal of your businessonline. Record keeping will be the key to measuring the success or lack of for every effort you pursue related to your online business. Your expenses, profits, taxes and more will all be determined by how you handle these tasks so it’s critical to set up your habits from the beginning to not only track the finances of yoru home based, online business, but to do it in an efficient way so that your labor for these tasks stays very low while providing you with information that will drive all of your decisions, at your fingertips!
Let’s start with your office expenses. In most areas, a home office can be deducted as a business expense. So for a home based business, even a business that works primarily online, we want to keep a good, solid record of the expenses allowed for deductions.
When running a business from home be sure to save every receipt from expenses incurred such as mortgage, energy, phone and insurance payments. A percentage of expenses incurred in maintaining your home can be included in your deductible expenses when filing your taxes. The percentage of your home used for the home business is the percentage of the expenses you can deduct from your taxable earnings.
With a home business, even an online based home business, be sure to schedule specific business hours. It can be extremely difficult when you start a home business to stay out of the office, but if you want to keep your sanity and maintain a positive relationship with others you want to be sure to make time for each, and set a standard that others can expect from you.
Ensure the continuity of your business by setting aside funds for a rainy day and growth of your businessonline. Things may happen unexpectedly and you may need extra money. Only withdraw money from the emergency fund when an emergency occurs though. Remember you are only borrowing money from yourself and that money may be needed at any given time to take advantage of opportunities that could expand your business. Don’t get caught shorthanded because you didn’t plan ahead!
If you are selling products, be sure to charge your customers the appropriate tax for their state, province or country. It is up to you to find out what the state tax is, if it’s applicable, where they are and add that amount to the cost of the item that they are buying. Many carts and online markets have tools to do this for you, but be aware of it and make sure you address it so that you don’t get a nasty surprise down the line somewhere.
Research the legal aspects of owning a home business very well. There could be additional paperwork, filing, and other legal requirements for your type of business in your area, so it is always a must to ensure that you are aware of any legal or permit issues that might surround your business, no matter what it may be.
Every expenditure you have should come with a receipt, yes, even for online businesses, even for online transactions. If it’s not emailed to you, print it as a pdf and put it into an electronic folder for tracking. In person receipts for business related expenses including auto travel, business luncheons, office supplies and more should also be collected and filed for tracking. This makes it easy to keep track of how much you spend on home business supplies. It also helps you keep track of the cost of running your business every month. Keeping accurate records of your expenditures is also useful in the event that you ever get audited.
Look around for applicable affiliate programs. Affiliating your online home business with other businesses of similar relevance will boost your traffic between websites and build you a valuable network of allies. You’ll boost your legitimacy on web search engines and get traffic from your affiliate neighbors, building word of mouth and trust along the way.
Finding the right name for your home business can often be critical to being remembered or even for online search purposes. Have a marketing agency help you if necessary. Your name should evoke the service or products you offer and encourage your customers to trust you and remember you. Think about different names and ask for people’s opinions. Put a copyright on your business name.
When it comes to taxes and your home business, be aware of the fact that any equipment that is used specifically for your business is tax deductible. So track those expenses as well and keep receipts of everything! Equipment is often on a depreciation schedule instead of an outright expense, so be sure to talk that over with your bookkeeper or accountant. This will help you out when you are paying your taxes. Be sure not to claim items that are obviously for personal use.
Integrate these three words into your home business strategy, ESPECIALLY for online/internet related businesses: loyalty, consistency, and work habits. Let these be the drivers for how you perform your work. Loyalty to your business ideas and principles and good work habits applied consistently will help you make continued progress. These things become especially important if you go through any rough patches.
A home business can be started by anyone, anywhere and with the tips given to you in the article above, you can take the steps needed to start your own home business, and control your own company from home.