Successful Home Business Opportunities, for years you’ve dreamed of being the owner of a successful business. One of the successful real home based businesses. You’ve even imagined your business at the top of the best home business list. The problem is you don’t know where to start.
Where you start is with an idea. Where, you might ask, do you the right idea for your business from the multitude of successful home based businesses available? Well, how about your own home?
That’s right. One of the most popular and most Successful Home Business Opportunities is online auctioning. Start looking in your closets, your CD rack, your bookshelves, your garage. You’ll find things that people out there want. All you have to do is sign up at any of the online auction sites and let the bidding wars begin.
You’ll be amazed at how much money you can make. And to become an even more successful home based business, invest the profits from your sells in higher-ticket items you can buy at a discount or on sale, then resell them. Keep this cycle going, and you’ll create a highly successful home business.
That’s just one example of how easy Successful Home Business Opportunities are to create. In writing, there’s a rule about writing about what you know. The same is true for business: do what you know. Lawn care, childcare, pet sitting, the list is endless. Sit down and write a list of all the things you know how to do, then think of how you can turn any of those things into a business.
Because Successful Home Business Opportunities all have one thing in common: they found a need and filled it. Elderly people love to have their pets walked for them and their errands run for them. People today are all so strapped for time that they’ll pay, and pay well, to have their lawns taken care of. So think of what you know how to do and how those things can be turned into real home businesses.
After you’ve chosen the business you want, you have to go further to make it one of the truly Successful Home Business Opportunities. Here, you have to do some planning. Some questions to think about are:
* Where is the market for my business?
* How do I get the news out about my business?
* Do I need to get a business license?
* Is my neighborhood zoned for at home businesses?
* Should I incorporate?
* Do I want or need a partner?
* Is there any equipment I need to buy?
* Where do I go for accounting services?
* Do I need liability insurance?
* Will I need to hire people to help me?
* What do I do about taxes?
* Do I need any special permits?
These are just some of the questions you need to consider when trying to build a business that joins the ranks of Successful Home Business Opportunities. But don’t freak out. You don’t have to have all the answers right away.
You do, however, need to have an idea of what your business will require in everything ranging from accounting to clean-up, if there is any, as you start and grow your business. Really, it’s like building a house. You start with a blueprint and go from there. You build a business the same way. But you can’t build anything unless you know what it is you’re building. It’s the same when it comes to building successful at home businesses.
Now that you have the idea for your successful home based business and an idea of the steps it will take to make it into a reality, you need to put in the necessary effort. You’ll also need determination.
Article Source: http://EzineArticles.com/?expert=Randy_Wilson
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Every year, several thousand people develop an interest in “going into business.” Many of these people have an idea, a product or a service they hope to promote into an in come producing business which they can operate from their own homes.
If you are one of these people, here are some practical thoughts to consider before hanging out the “Open-for-Business” sign.
In areas zoned “Residential Only,” your proposed business could be illegal. In many areas, zoning restrictions rule out home businesses involving the coming and going of many customers, clients or employees. Many businesses that sell or even store any thing for sale on the premises also fall into this category.
Be sure to check with your local zoning office to see how the ordinances in your particular area may affect your business plans. You may need a special permit to operate your business from your home; and you may find that making small changes in your plan will put you into the position of meeting zoning standards.
Many communities grant home occupation permits for businesses that involve typing, sewing and teaching, but turn thumbs down on requests from photographers, interior decorators and home-improve ment businesses to be run from the home. And often, even if you are permitted to use your home for a given business, there will be restrictions that you may need to take into consideration. By all means, work with your zoning people, and save yourself time, trouble and dollars.
One of the requirements imposed might be off-street parking for your customers or patrons. And, signs are generally forbidden in residential districts. If you teach, there is almost always a limit on the number of students you may have at any one time.
Obtaining zoning approval for your business, then, could be as simple as filling out an application, or it could involve a public hearing. The important points the zoning officials will consider will center around how your business will affect the neighborhood.
Will it increase the traffic noticeably on your street? Will there be a substantial in crease in noise? And how will your neighbors feel about this business alongside their homes?
To repeat, check into the zoning restrictions, and then check again to determine if you will need a city license. If you’re selling something, you may need a vendor’s license, and be required to collect sales taxes on your transactions. The sales tax requirement would result in the need for careful record keeping.
Licensing can be an involved process, and depending upon the type of business, it could even involve the inspection of your home to determine if it meets with local health and building and fire codes. Should this be the case, you will need t o bring your facilities up to the local standards. Usually this will involve some simple repairs or adjustments that you can either do personally, or hire out to a handyman at a nominal cost.
Still more items to consider: Will your homeowner’s insurance cover the property and liability involved in your new business? This must definitely be resolved, so be sure to talk it over with your insurance agent.
Tax deductions, which were once one of the beauties of engaging in a home business, are not what they once were. To be eligible for business related deductions today, you must use that part of your home claimed exclusively and regularly as either the principal location of your business, or the place reserved to meet patients, clients or customers.
An interesting case in point: If you use your den or a spare bedroom as the principal place of business, working there from 8:00 to 5:00 every day, but permit your children to watch TV in that room during the evening hours, the IRS dictates that you cannot claim a deduction for that room as your office or place of business.
There are, however, a couple of exceptions we will note to the “exclusive use” rule. One is the storage of inventory in your home, where your home is the location of your trade or business, and approval for your business, then, could be as sour trade or business is the selling of products at retail or wholesale. According to the IRS, such storage space must be used on a regular basis, and be a separately identifiable space.
Another exception applies to day care services that are provided for children, the elderly, or physically or mentally handicapped. This exception applies only if the owner of the facility complies with the state laws for licensing.
To be eligible for business deductions, your business must be an activity under taken with the intent of making a profit. It’s presumed you meet this requirement if your business makes a profit in any two years of a five-year period.
Once you are this far along, you can deduct business expenses such as supplies, subscriptions to professional journals, and an allowance for the business use of your car or truck. You can also claim deductions for home related business expenses such as utilities, and in some cases, even a new paint job for your home.
The IRS is going to treat the part of your home you use for business as though it were a separate piece of property. This means that you’ll have to keep good records and take care not to mix business and personal matters. No specific method of record keeping is required, but your records must clearly justify any deductions you claim.
You can begin by calculating what percentage of the house is used for business, either by number of rooms or by area in square footage. Thus, if you use one of five rooms for your business, the business portion is 20 percent. If you run you r business out of a room that’s 10 by 12 feet, and the total area of your home is 1,200 square feet, the business-space factor is 10 percent.
An extra computation is required if your business is a home day care center. This is one of the exempted activities in which the exclusive use rule doesn’t apply. Check with your tax preparer and the IRS for an exact determination.
If you’re a renter, you can deduct the part of your rent which is attributable to the business share of your house or apartment. Homeowners can take a deduction based on the depreciation of the business portion of their house.
There is a limit to the amount you can deduct. This is the amount equal to the gross income generated by the business, minus those home expenses you could deduct even if you weren’t operating a business from your home. As an example, real estate taxes and mortgage interest are deductible regardless of any business activity in your home, so you must subtract from your business’ gross income the percentage that’s allocable to the business portion of your home. You thus arrive at the maximum amount for home-related business deductions.
If you are self-employed, you claim your business deductions on Schedule C, Profit (or Loss) for Business or Profession. The IRS emphasizes that claiming business-at-home deductions does not automatically trigger an audit of your tax return. Even so, it is always wise to keep meticulously within the proper guidelines, and of course keep detailed records if you claim business related expenses when you are working out of your home. You should discuss this aspect of your operation with your tax preparer or a person qualified in the field of small business tax requirements.
If your business earnings aren’t subject to withholding tax, and your estimated federal taxes are $100 or more, you’ll probably be filing a Declaration of Estimated Tax, Form 1040-ES. To complete this form, you will have to estimate your income for the coming year and also make a computation of the income tax and self-employment tax you will owe. The self-employment taxes pay for Social Security coverage.
If you have a salaried job covered by Social Security, the self-employment tax applies only to the amount of your home business income that, when added to your salary, reaches the current ceiling. When you file your Form 1040-ES, which is due April 15, you must make the first of four equal installment payments on your estimated tax bill.
Another good way to trim your taxes is by setting up a Keogh plan or an Individual Retirement Account. With either of these, you can shelter some of your home business income from taxes by investing it for your retirement.
Copyright 2004 Joe Featherston
About The Author
I started this website to offer articles and resources for making your home base business a success. Learn from other’s mistakes and build a more profitable home base business.
Your Resources For Home Base Success,
Article Source: http://EzineArticles.com/?expert=Joe Featherston
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Faulty information costs you money! Which of these
popular business misconceptions do you believe?
Popular Misconception #1:
“We Only Need Our Books Done Once A Year For Tax Purposes.”
Are Your Accounting Records Adequate To Run Your Business?
Although it is important to keep records for tax purposes,
it is not the only reason (or even the primary reason) good
accounting records should be kept. Another frequent reason
clients request financial statement preparation is to obtain
bank financing. Although important, this also is not the
primary purpose of keeping good records for your business.
Good recordkeeping will enable you to extract meaningful
financial information for your business that will help you
to manage it properly. If you can`t access this information,
you will not be able to manage your business properly. Bad
management leads to business failure.
Yes, the primary reason good accounting records should be
kept is to produce periodic (at least on a monthly basis)
financial statements for management information purposes.
Only with this current financial information can you properly
manage your business. This information can alert you to
declining sales, excessive expenses, tax opportunities,
cashflow problems, and many other vital concerns for your
business.
To be of value, this accounting system should be set up
with meaningful account categories and departments. It may
be cost-effective to have an outside accounting service do
the monthly bookkeeping. However, with accounting software
that is readily available, you don`t have to be an expert
bookkeeper to do your own books and extract meaningful
financial information.
If you do your monthly statements yourself, it would still
be prudent to have your accountant or business advisor help
you set up your system and, as well review such information
with you to discuss problems and opportunities.
Popular Misconception #2:
“Writing My Hobby Off As A Business Loss
Saves Me A Lot Of Income Tax!”
Is Your Hobby A Tax Write-Off?
If your business has no reasonable expectation of profit, if it is a
hobby and not really a business, you will ultimately fail in your tax
objective. Since your losses are being incurred for a hobby and not a
true profit generating business, the tax authorities will take the
position that you aren`t entitled to any deductions. This is a double
blow. First, you`re losing money. Second, you`re denied tax deductions.
It is true, however, that if you enjoy what you`re doing, you`ll do
better at it. You`ll be willing to work longer hours and you`ll be
willing to put up with more hardships in order to make your business a
success.
Rather than attempting to have the tax system subsidize your hobby,
why not turn that favorite pasttime into a real, profit generating
business? This is a doubly rewarding. First, you make money at
something you love doing. Secondly, the tax authorities legally have to
allow your reasonable expenses to earn your now substantial business
income.
Prove that you`re running a business by running a business. Prepare and
follow a proper business plan. Keep good accounting records with at
least monthly financial statements to give you the information you need
to manage your business. Above all, make money from what you do.
Popular Misconception #3:
“I Don`t Make Enough Money to Incorporate!”
Will Incorporating Really Benefit You?
Some persons resist the idea of incorporating themselves because
the tax savings may not justify the added costs of incorporation,
annual minutes, and extra tax returns. However, incorporation gives
advantages that go far beyond tax savings.
Insurance may give you some protection against loss. However, you
may suffer business losses and lawsuits that may not be covered. For
extra protection, consider incorporating yourself. The limited
liability of your own corporation alone may justify the additional cost
and complexity.
Corporations may also be used for income-splitting with your family,
as well as estate planning and retirement planning objectives.
Additionally, corporations lend some credibility to smaller businesses
and may enhance your image and prestige in the eyes of clients or
suppliers.
Lower corporate tax rates will generally apply on small business income.
Even in loss years, wages can be paid by the corporation to you so that
you may utilize personal tax credits available. If unincorporated, these
credits might be lost forever. The now larger corporate losses can be
carried forward to future (hopefully more profitable) years.
A full analysis of the advantages and disadvantages of incorporation is
beyond the scope of this report. However, being incorporated may give
you more flexibility and advantages than you originally anticipated.
Certainly, it is not prudent to reject it as an option simply because it
is more complicated and costly. In fact, it may be one of the best
investments you ever made.
Popular Misconception #4:
“I really need an office out.
Being home-based makes me look amateur!”
Is A Home Office REALLY Professional?
Many times small business persons make the mistake of generating
unnecessary overhead in order to impress clients and prospects. Often
this attitude leads to escalating debt and business failure. One such
example is getting an impressive, but expensive, commercial office
space.
Customers aren`t stupid. They can see when such outside space is
necessary or advantageous for them. They can also see when it is a
waste of money and designed to fuel your ego. What matters most to
clients is whether they are getting cost-effective results or not. If
your product or service delivers such excellent value, your customers
will be impressed and come back. In contrast, if one allows his ego to
get in the way of satisfying the customers` needs, they will go
elsewhere.
With the move to telecommuting, downsizing, networked communications,
and home-based businesses, operating from your home office is actually
smart and trendy. Can you think of a more appropriate location for a
consulting firm specializing in home-based businesses? They of all
businesses should set the example in cutting unnecessary expenses and
operating efficiently.
This is not to say that there aren`t any disadvantages to being
home-based. One certainly must be well organized, disciplined, and
willing to follow good time management principles. This alone could
mark you as more professional than other businesses, home-based or not.
Expensive office space is not the answer to reflecting a professional
image. If you are truly concerned about your image, offer quality
service. Make sure that all your corporate communications (telephone,
websites, printed materials, et cetera) reflect the professional nature
of your business.
Popular Misconception #5:
“Since we`re not seeking financing,
we don`t need a business plan.”
Do You REALLY Need a Business Plan?
To obtain financing, many persons will prepare a business plan.
Although entrepreneurs will go to great lengths to get their loan or
capital, these same business persons will not bother to plan ahead very
far or analyse their business. Even if you required no additional
money, preparing a business plan can help you to succeed in your
business.
Running a business without a plan is like going on a trip without a
map,sufficient gas, money, or even a destination. Just as you wouldn`t
go on a vacation without some planning, no business can be successful
without it. Putting that plan in writing helps you to think out a
strategy for successfully operating and growing your business.
Where is your business today? Where will it be tomorrow? What is your
mission statement? What product lines are profitable? Which ones
aren`t? What business do you think you are in? What business do your
clients think you are in? Should you be in a different business? Is
your product or service less attractive to your clients? How are
competition, global commerce, technological and social changes affecting
your company? What is your competitive strength? What are your
weaknesses? Who are your biggest competitors? What are their
weaknesses and strengths? What is your marketing strategy?
What are your projected income and expenses and cashflow for the next
year? How about the next five years? Do you have a capital budget?
What determines whether you buy an asset or not? Do you have an exit
strategy? How will you manage growth? Do you have a financial plan? Do
you have an operations plan? What definite sales and net profit targets
have you set for this year and the next five years? What factors could
interfere with the attaining of these goals? What contingency plans have
you made to deal with such problems?
The purpose of these questions is to get you thinking and planning.
If you fail to plan, you plan to fail. Although your accountant or
business advisor can help you prepare your business plan, only you can
set the appropriate goals and follow through on them. Yes, you
definitely need a business plan, not just for obtaining capital, but as
a roadmap for your business.
Popular Misconception #6:
“I like bartering with clients
because it saves paperwork and taxes.”
Are You Reporting Barter Transactions?
Bartering is an excellent way of doing business. However, contrary to
popular belief, some barter transactions are taxable, both for income
and sales tax purposes.
Legally, you must maintain adequate financial records for your business.
Barter transactions made by your business must be reported to the
appropriate taxation authorities and taxes paid. However, transactions
between friends not engaging in business with each other may not be
taxable.
If you are an auto mechanic and I am an accountant and I swap accounting
services for your car repair services, the transaction in this case is
most likely taxable, even if we are friends. However, your accounting
fees should be deductible as a business expense and so should the
business portion of my car expenses. Note also that sales and similar
taxes may apply on this transaction.
On the other hand, if I trade accounting services for a vacation for my
family, I should really declare the value of such services as income.
The firm supplying the vacation would be able to deduct that value as
accounting fees. Any sales or similar taxes would have to be paid on
such transaction.
Many persons don`t record such transactions. For some, it may be a
matter of wanting to believe that you don`t need to be bothered with the
extra paperwork or taxes. Remember, though, that ignorance of the law
is no excuse. Legally, you must keep proper records and pay all taxes
due.
Popular Misconception #7:
“All My Workers Are Self-Employed, So I Don`t Need
To Bother With Payroll Or Workers` Compensation.”
Do You Need To Pay Payroll Taxes?
To save on payroll taxes and workers` compensation premiums, many
employers arrange their affairs in such a way that those working for
them are self-employed, independent contractors. This is good tax
planning.
On the other hand, some employers take the position that all those
working for them are self-employed, whether they are or not. Although
it is tempting to eliminate payroll taxes and workers` compensation
premiums, care should be taken to do so legally.
Whether those working for you are employed or self-employed is a
question of fact (which can be determined by the Courts). Do you supply
the tools and vehicles? Do you determine the working hours? Do you
have the right to control how the job will be done? Do you pay a
flat-rate or by-the-hour or a salary? Does your worker have other
clients?
By asking several such questions, a pattern will emerge as to whether
your worker is employed or self-employed. If it turns out that your
worker fits all the criteria of an employee, don`t say he`s
self-employed. On audit, you would still be responsible for the payroll
taxes (and penalties and interest as well).
Even if your workers are considered independent contractors by the
Income Tax Department, it is still possible that they will be considered
to be “workers” for purposes of Workers` Compensation legislation.
Thus, it is the responsibility of the employer to determine whether such
coverage is necessary or not. Failure to obtain proper coverage could
subject you to substantial (and unnecessary) costs.
In review, calling someone self-employed, doesn`t necessarily make them
self-employed. If you have a dog, call it a dog. Your position that
your dog is really a cat will not be successful. Likewise, make sure
that your position regarding your workers is legally correct.
Popular Misconception #8:
“My Accountant Charges Too Much.
I Can`t Afford It Anymore.”
Is Your Accountant Worth His Fee?
Many business persons view bookkeeping, accounting, and tax preparation
as necessary evils. In their view, accounting fees are an expense to be
reduced, deferred or even completely eliminated.
A good accountant, however, can give you benefits far in excess of the
fees charged. Well-designed accounting systems will enable you to
extract meaningful financial information for your business that will
help you to manage it properly, avoid business failure, and alert you to
declining sales, excessive expenses, tax opportunities, cashflow
problems, and many other vital concerns for your business.
Your accountant can save you lots of money with the advice you receive
on tax and other business matters. As well, a competent accountant can
be a valuable resource in discussing business problems and opportunities
with you.
Popular Misconception #9:
“Nobody Makes Money On The Internet.”
Can You REALLY Profit From The Internet?
Many people feel that the Internet is all hype. Many others feel that
it is overrated. Still others are of the opinion that it may be good
for some types of business, but not theirs.
Typical comments heard include: “I`ve lost money on the Internet…Major
corporations have lost millions…Do you personally know anyone who has
made money from the Internet?”
However, if you check out the list of recent billionaires, a high
proportion of these are Internet-related, and many of them under
forty years of age. As well as the very rich, you can find many cases
of more modest financial prosperity resulting from Internet commerce.
It is true that many are losing money on the Internet. It is also true
that many don`t know what they`re doing. However, with the proper
assistance, you, too, could profit from the net.
Article Source: http://EzineArticles.com/?expert=J._Stephen_Pope
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