It is increasingly common for people to start a business from the comfort of home. Sometimes the appeal to be your own boss is the driving factor. Sometimes it's because you can keep an eye on the kids at the same time. Sometimes the knowledge of being able to work at your own pace, at the hours you choose, is the deciding factor. Possibly it is a combination of the above.
Whatever your reasons for working from home, if you are just starting or still thinking about making this step, there are a few things to keep in mind.
First and foremost is your budget. When you leave behind paid employment, you need to be able to support yourself for, possibly, months to come. It is common for a business to make a loss in its first year. And even if you are able to make a profit, it is only rarely that the amount made, after taxes, will be significant. Will you be able to cope with this? Do you have money set aside? Do you have the start-up funds needed for your business or do you need to take out a loan? If you need to take out a loan, will you be able to make the monthly payments? These are all important things to consider.
If you can answer these questions in a positive manner, the next step to take is to look for a bookkeeper. Unless you have the skills needed for this job, having the aid of a bookkeeper will help you avoid problems in the long run. There are many bookkeepers who will be willing to advise you and who will be able to aid with end of year paperwork at a fair and affordable price.
The bookkeeper will undoubtedly be able to answer questions about how and where to register your business for tax purposes. Other legal requirements will depend on the country you are doing business in. Make sure to ask which expenses class as tax-deductible. Keep receipts of these expenses.
Keep receipts of anything significant, for that matter, and file away these receipts safely. You will need them at the end of the business year. If you can keep them filed by week or month, this is even better because it will save time sorting them all later on.
Make records of your expenses and income. If you have a bookkeeper, this does not need to be all technical. Your bookkeeper will aid you with that. But a standard record, preferably filled in on a weekly basis, will help you keep track of everything and will soon give an insight into whether or not you are achieving your goals. You will also need this record for tax purposes.
Do not keep all your records on the computer. If you do choose to do it this way, make sure you make backups on a regular basis. Computers do crash, hard drives need renewing and a computer virus could cause devastation. It is safer to use a paper notebook and to keep the notebook in a sensible place.
Once you start making money, keep in mind that you will have to pay taxes on your earnings at the end of the financial year. It is good practice to keep this money aside (your bookkeeper will be able to advise you on the rates relevant to you), so that you have this ready when needed.
Almost every business will need a computer, printer and telephone/fax. If you are unsure whether or not your skills match up to the needs of your business, free courses tend to be available for those new to this technology. A certificate in IT is always helpful and will look good on your list of qualifications.
If you have children around the home during work hours, and you expect to be receiving phone calls from potential clients, it can be helpful to ask a friend to keep an eye on the children. Children demanding your attention during an important call can be stressful, and can give an unprofessional impression to your customer. The same goes for barking dogs or anything similarly distracting.
Try to have an office space at home for that very purpose. The office should be a place for work, and should be off bounds to others not involved in business activities during work hours. This might take some getting used to by other members of the family, but it will be worth it in the long run.
All this might sound daunting, but once you get into the routine of keeping notes, filing and all the technical aspects of your business, it can make for a rewarding experience.
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