Owning and managing a home company has never been easier thanks to modern technologies. To contact consumers, all you need is a mobile phone and a laptop. But there are a few things you should know before you put up your sign and start promoting
Advantages of a Home Business
A home-based business is both easy and cost-effective. The costs of starting a conventional brick and mortar firm are significantly lower. You don't have to worry about paying rent, utilities, or commute costs. Low overhead implies less risk and greater profit potential.
Home companies also provide independence and flexibility to its proprietors. You may work on your business in your jammies during your leisure time. Running a home company also has tax advantages.
Choosing the Right Business
The possibilities for a home company are virtually limitless. A few suggestions are photography, dog walking, house painting, and home décor. A virtual assistant, graphic designer, or social media professional are all options. Consider your passions and hobbies. What do you excel at? What do you like to do in your spare time? What is the most common topic on which individuals seek your advice? The answers to these questions may be able to assist you in making the appropriate decision.
Many people work as associates or consultants for a well-established firm. This "company in a box" option assists novice entrepreneurs with marketing and communications. You'll also get the opportunity to work with seasoned mentors.
Picking a Business Structure
After you've decided on a business name, you'll need to decide on a business structure. Sole proprietorships, limited liability companies (LLCs), and S corporations are the most common types of home enterprises. You can create a partnership if you have two or more owners.
For many company owners, a single proprietorship is the most convenient choice. A sole proprietorship, on the other hand, does not provide personal liability protection against your business's debts and other responsibilities. Instead, if your company has the potential for legal liability, you should consider forming an LLC. Make sure you do your homework on the many business entity options and which one is ideal for you.
Securing a Business License
Location-specific licensing and permission restrictions apply. Visit the Small Business Administration for a list of state-specific regulations. Home companies, in general, require a business license from the local government. The needed license can be obtained through your city's business or tax department.
You should also look at zoning laws. Operating a company from your house may be prohibited by homeowner's associations or zoning regulations. You might be able to acquire a variance if this is the case. Before you open, make sure you have the permissions you need.
Health & Safety Permits
Additional licenses may be required for some enterprises. A fire permit may be required if you welcome consumers into your house or keep hazardous merchandise.
Food and personal care product manufacturers and sellers are frequently subjected to health inspections. It's possible that you'll need to obtain a health or environmental permit. For additional information, contact your local business office.
Professional and Sales Tax Licenses
Professional certification is also required in businesses such as hairdressers, legal and financial advisers, and home childcare services. For a comprehensive list of businesses that require professional license, go to your state's business website.
A sales tax license may be required if you offer goods or services. This is sometimes included with the business license, and other times it is a distinct document.
Your business is not covered by your homeowner's insurance. If you run a company out of your house, your insurance coverage may be voided. Notifying your homeowner's insurance carrier about your business venture is a smart idea.
To safeguard against business losses, you should get business insurance. General liability insurance is required by all enterprises. Property damage, inventory and product damage, and personal injury coverage are all available. Data breach insurance is required for every company that stores sensitive information online. In the event of a calamity, business interruption insurance replaces revenue. Make careful to read the tiny print to understand what the policy does not cover.
Bookkeeping and Accounting
Keep track of your company's revenue and expenditures. You may use a basic Excel spreadsheet or accounting software to track all of the money coming in and out of your firm, but you must keep track of it all.
To keep your personal and company funds distinct, open a separate banking account for your business. It's also a good idea to get a separate credit card for your business.
To keep track of your finances, make copies of all receipts and income statements. Make sure you're on top of your documentation. Set aside one day every week to focus on invoicing, bill payment, and record keeping.
You are self-employed when you run a home business. Taxes, including Social Security and Medicare, are your responsibility. The IRS usually requires you to make estimated quarterly payments.
All home business owners may deduct ordinary and necessary business expenses. These include:
The Home Office Deduction
You could be eligible for a home office deduction. This deduction is only applicable to spaces that are only utilized for business. You cannot claim the deduction if you work from your bedroom or kitchen. The storage of merchandise and samples, as well as home daycares, are the only exceptions.
You can deduct a percentage of your homeowner's insurance, homeowners' association fees, cleaning fees, mortgage and interest, and utilities under the home office deduction. Home repair expenditures can also be deducted, however the amount depends on whether the repairs are direct or indirect.
Yoel Molina, Esq. (AKA “Mo”)
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Yoel “Mo” Molina, I am a lifelong resident of Miami, Fl. I am a graduate of Miami Senior High, Class of 1992, Georgia Institute of Technology, B.S. 1997 and University of Maine School of Law, J.D. 2001. I have been practicing law in Miami Since 2001. I am a former training prosecutor in the Miami-Dade State Attorney’s Office. I have experience in jury trials, appeals, and administrative hearings. I have appeared before judges across the State. My experience ranges from civil litigation matters, collection matters, foreclosure, business and corporate, contracts, real estate, leases and employment matters..
"Mr. Molina has always been there for us with timely, reliable and competent advice. He is an important and valuable part of our team." Corporate Client Eric Delgado, President of American International Export, Inc., a worldwide importer and exporter of brand name appliance parts.
"Yoel has been responsive and attentive to our company’s best interests and needs. He has been a valuable resource to our company. Any company that enlists his services would be in good hands-- including our own clients.” Corporate Client Gibran Flynn - Co-Owner and Founder of Eleva Solutions, Inc., the South Florida leader of outsourced HR, Staffing, Training, and Loss Prevention.
"My name is Anastasia Yecke Gude and I am the owner of Healing Hands Therapeutic Massage LLC. In the process of my company’s growth and expansion, I suddenly found myself a few weeks ago in need of a 1099 contractor agreement, and I needed it ASAP. As in, the very next day! I contacted the Law Office of Yoel Molina and his assistant put me in touch with Mo. I sent him what I had drafted up and he replied within a few hours with suggested revisions and clarifications, as well as a few insights I had not even considered. I was thoroughly impressed by the quality of work he provided, especially considering the time crunch I put him in (sorry, Mo!). I definitely recommend his services to anyone in need of a good contract attorney, and I will be calling him again for future work…hopefully in less of a rush next time!"