Working from home is growing in popularity among America's workforce for many reasons. If for no other reason, missing the daily commute is an advantage and a cost savings. With the advent of new technologies such as the computer, telephone, fax machine, etc., the worker can simply do most of the things at home, previously done in the office. So how does one build a business and create wealth at home?
First, you should have a designated office area for your business. Not only does the IRS require this in order for you to get a tax break, but it adds some formality to the fact that you are working at home. Overcoming the informality of working at home will be your biggest task. Just as you get up and dress for work, it is a good idea to do the same if working at home. If you are to succeed you will need to work just as many hours at home as you did when going to the office.
Schedule your work and prioritize your clients in the order in which the jobs came in. If you are running your own business, you will soon learn the value of your customer. Your best advertising is still word of mouth. They will tell their friends, and those recommendations will grow with time.
Have a set fee schedule. This allows consistency in pricing your work. Do no undervalue your time and effort. Remember one rule with regard to your work: Anything that is free will not be valued or appreciated. You would think that when you do someone a favor, they would appreciate it, but the contrary is true. The person to whom you do all the favors will become your most demanding and unhappy customer.
Avoid like the plague the desire to open an office outside the home. Monthly overhead means you will need to make the money for rent, utilities, etc. before you can take a dime for yourself. While working from home has its limitations, at least contributing to the overhead there is helping you not only with your business, but with your home as well.
Many small businesses will not survive the downturn in the current business environment. Working from home will certainly help with expenses. Pay off any business loans you have to better your position.
Avoid anything requiring reoccurring monthly payments. By the same token, advertise discretely and cheaply. Evaluate carefully where you put your advertising dollars to ensure you are getting the best return on your investment.
Every home business should be incorporated. Usually, the limited liability corporation is best suited for a home business. Check the requirements for your state. The application process is not difficult and you should do the work yourself. I saved more than $750 by doing my own application. All sales should come into a bank account set up for your LLC. Only the money taken from the account as salary should be subject to with-holdings. Consult a good CPA to get the details for your state. Keep good records. Be sure to get the maximum benefit from your business set up.
Be sure to page regularly into a Roth-IRA. This money is basically tax free for a small business owner and is a great way to defer taxes on income. Again, check with your CPA for details.
Good organization to maximize space, tax deductions, and advertising will come back in cash. The benefits far outweigh the issues of a home office.
