Most “how to start your home business” articles are good on “paperwork issues”. I liked this one because it actually reminds home business people that they need to make a profit.
From Newsday
“There needs to be some planning from a business point of view,” says Rosalind Resnick, president of Axxess Business Centers Inc., a small-business consulting company in Manhattan. “One of the problems a lot of people have is getting organized.”
She suggests putting together a business plan to help focus your efforts. This includes establishing a budget, pinpointing your target market, and setting realistic financial goals and price structures.
Too often, home-based entrepreneurs set their prices too low, and profit margins suffer as a result, says Resnick, 47, a former business journalist turned home-based entrepreneur. Your pricing should factor in future growth, including the possibility of hiring an employee.
“If you’re doing all the work yourself, you really haven’t started a business. All you’ve done is bought yourself a job,” she says.
If your business is so competitive that you have to lowball your prices, it may not be worth getting into, she adds.
The bottom line is you have to do your homework, experts say – the same as if you were opening a brick and mortar business.
“If you really want to have a business, you have to act like a business,” adds Diane Pfadenhauer, 43, president and owner of Employment Practices Advisors, a human resources consulting company in Northport. “It doesn’t matter where you work out of.”
Pfadenhauer, who is also a lawyer, started her home-based business three years ago. One of the first things she did was to incorporate the business, which helps an owner avoid personal liability in case of legal action.
It’s important to consider the legal structure of your business from the beginning, she says, not just for liability reasons but also for tax purposes.
You should also take a hard look at your insurance policies, Pfadenhauer adds. She increased the coverage on her own homeowners insurance to cover some of her office equipment and took out business interruption insurance in case of a disaster.
Added insurance can come in handy, especially if the home business is storing salable merchandise or if clients visit the office, says Frank Ross, home-based business adviser for AllBusiness.com, an online resource for small and midsize businesses.
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