The Essentials for Starting Any Home Business Model
No matter what kind of home business model you decide to start, there are always some things that need to be set up beforehand. It’s not a pleasant experience to get started and then discover later that there are some essentials that you need immediately but never set up. It also ends up turning into an extra unexpected expense that you could do without.
You need a good place to work and the kitchen table isn’t going to cut it. The best workspace is sealed away from your daily life. If you can, set up an office room. Make sure it’s comfortable. It should be a place you want to spend hours of time.
You’ll need a computer with reliable internet connection and a phone. There are providers online that can set you up with your own 800 number and other goodies like voicemail for the phone at reasonable rates. Also, stock up on all the basic software you’ll need, depending on the business you’re planning.
Become an Entity
You’ll need to become a legal entity. Decide whether you’re company will be a sole proprietorship, an LLC or a corporation. The main difference is who has control. With a sole proprietorship, you’re the owner and company in one. An LLC (limited liability Company) separates the business from the owner. A corporation is run by a board of directors. If you want to make all of the decisions yourself, be a sole proprietorship. If you think you may someday sell the business or pass it on to someone else, choose to be an LLC or corporation. Do your research and get advice from a lawyer or tax accountant to help you determine which is best for you.
Pay and Get Paid
If you’re going to be selling anything, you need to decide which payment methods you’ll use. You’ll need some type of merchant account. This is a third party that processes payments for you. It can be an online provider like PayPal, a credit card company, a bank, or another provider. If you accept credit cards, you need to be PCI compliant. PCI stands for ‘Payment Card Industry’ and it’s a standard for handling credit card information.
Work out Your Budget
Calculate to the best of your ability your projected income and expenses. It’s tough to know when you haven’t started yet and don’t have a track record, so set goals and have a back-up plan. Try to realistically estimate expenses and always assume that you’ll make less and spend more. The important thing is to be organized and write down every penny you spend or take in. After a month or so, you’ll start to get a realistic picture of how you’re doing.
Track Your Finances
You’ll need a system for tracking your finances. Keep your business and personal accounts separate. Open a separate checking account for your business. Write down a memo of every transaction and what it was for. Software programs can help you do this. Create a filing system for your documents and keep everything in labeled folders. You should also have some way to check your finances at a glance, such as an Excel Spreadsheet for easy reference.
Finally, there’s one important thing many new entrepreneurs don’t consider – make sure you have a Plan B. You hear great stories about how people sacrificed everything to start their business and it succeeded. You don’t often hear the stories about people who lost everything. Always know what you’re going to do if your business model doesn’t quite work out as you planned.