The hardest part of starting a home based business? Not knowing what you don’t know. Between writing a business plan, filing forms, and building your brand, there are a lot of little decisions to make when starting your home-based business. In some cases, making the wrong one could cost your business big. That’s why we’ve put together these nine quick tips on how to start running a business from home – the right way.
Running a Business from Home: Equipping a Home Office
What do you need when starting a business from home and what’s overpriced hype? These are the essentials that every home-based business needs, no matter how shoestring your budget.
1. Don’t skimp on high-speed internet
If there’s one thing you need to work effectively from home, it’s fast, reliable internet service. For home-based business owners, it’s worth springing for business internet service that includes faster speeds, guaranteed uptime, and improved customer service.
2. Invest in ergonomics
It’s well-known that entrepreneurs put in long hours. Make sure they’re pain-free ones by investing in an ergonomic office chair and desk setup. That includes buying a desktop so you’re not constantly hunched over a laptop screen.
3. Take cybersecurity seriously
Being lax on cybersecurity could cost your business: 60% of small businesses that are targeted by a cyberattack go out of business within six months. Investing in firewalls, antivirus, and a VPN protects home-based businesses from hacking, identity theft, and other types of cybercrime.
Running a Business from Home: Stay Productive
A well-appointed workspace is the first piece of the productivity puzzle, but it’s not all you need to stay on task while working from home. These tips will make your home a great place to work and live.
4. Keep your workspace sacred
The secret to work-life balance while working from home? Making sure that when you’re at work, you’re actually working. This is much easier if your office is in a quiet area that your family understands is off-limits during work hours.
5. Set aside time to take calls
Are emails, calls, and notifications constantly interrupting your focus? Instead of letting interruptions derail your workday, set aside time to take calls and answer emails. Then, keep your phone on silent the rest of the day.
6. Outsource your time sucks
Don’t waste hours dragging your feet through invoicing, emailing, and other tasks that don’t make your business money. Outsourcing mundane tasks to a virtual assistant lets you make the most of your time on the clock.
Running a Business from Home: Paying Taxes
Tax time shouldn’t fill you with dread. In fact, with smart planning and helpful tax tips like these, you can make paying small business taxes a breeze.
7. Choose the right business structure
Many home-based entrepreneurs operate as a sole proprietor, but this business structure may not be the best choice for tax purposes. Instead, consider forming a corporation or LLC with S-corp status to minimize your self-employment tax liability.
8. Understand the home office deduction
If you want to claim the home office deduction — and you do — you need to think ahead. In order for office space to qualify for this tax deduction, it needs to be used exclusively for business. That means entrepreneurs need a dedicated workspace in order to take the home office deduction, whether it’s an entire room or just a corner.
9. Keep good records
In addition to the home office deduction, you can deduct expenses associated with furnishing, equipping, and upgrading your home office — but only if you keep good records. Keep in mind that deducting using the actual expense method also requires you to depreciate the value of your home and may impact capital gains taxes.
Running a Business from Home – Ending Remarks
When it comes to running a successful home based business, expertise comes with experience. However, that doesn’t mean first-time entrepreneurs should jump in blind. Making the wrong mistakes in the early phases could cost your small business big. Make sure you’re heeding tips like these and consulting with your tax professional as you prepare to open up shop at your home-based business.