How to Start A Home Business

The most common business structures for home-based companies have a downside: they make the individual responsible for the debts and liabilities of the business. If you separate your finances effectively, though, you should be able to protect your personal assets. Other benefits to maintaining separate finances are that they make filing taxes, bookkeeping, and keeping a general sense of organization much easier.

• Keeping Finances Separate: Personal and Business

We keep emphasizing the importance of keeping your personal finances apart from your business gains and losses, but what are some easy ways to do this? One of these is to open a business bank account. A separate account quickly helps to organize things like profits and payments to suppliers, merchants, services, and employees.

• Business Bank Account

While there is a range of business-based bank accounts out there, it might be easiest to start with a bank where you already have an account. There are also free checking accounts and other sign-up deals to take advantage of. It also helps to decide what you want out of your banking experience: are you more focused on online/mobile banking or more interested in things such as free ACH payments?

• Business Credit Card

A credit card that is designated for business use only is another way to ensure financial organization and separation. It also comes with the added benefit of creating business credit. Use this card for any and all transactions related to your company; you will not only build valuable credit but also make tax filing much easier. Depending on your credit rating, you can find a card that provides points with each purchase or other benefits. Start with your bank, consider the rewards preferences you prefer, and find the perfect card for you.

• Accounting Software

These days, home-based businesses cannot function without the well-oiled machine that is accounting software. The home companies that you look up to probably use some version of this software simply because they can streamline your accounting process, your bookkeeping, and your tax filing process. If you are just starting out and do not want to add another cost to your ledger, there are free versions of accounting software that hold up well and other versions that are specifically designed for smaller companies. You should be able to tailor your software to your new business.

Step 8: Acquire Business Funding

When you work from home, you are able to immediately eliminate some traditional startup costs, such as renting a space or opening a physical store. This is one of the most significant benefits of an at-home business because it allows you to start with lower capital and also lower stress levels, and focus on new means of profit and exposure.

Learn more: Free money to start a business

However, at some point, you will need to search for and acquire funding. Whether it is at the start of your business journey or later, as you wish to grow your company, securing financing will become a concern. For example, many businesses deal with initial costs stemming from inventory or equipment. While most home-based companies are able to get started for less than $5,000, some businesses—especially those with employees—require more.

So, where do you turn? As opposed to established companies or brands, it can be more difficult for new businesses to secure traditional financing. However, a business-based credit card or a new line of credit or loan can provide a financial lift to your new business. There are also emerging forms of financing that are more creative in nature, such as crowdfunding sites. You also can ask friends or family to invest; just be careful in mixing business with family.

Step 9: Establish Your New Home Office

Running a prosperous home business begins in your home office. While this may seem like an insignificant step, maintaining an office that is professional and provides a separate space to focus on your work is essential.

Working where you live can be a challenge. While you may not have to commute to an office anymore and deal with traffic and the lag time it brings, your productivity can suffer. It is integral to establish your office in a spot that will maintain and increase productivity as well as keep your work life and home life separate.

Distractions are a necessary evil at home, and the ability to filter them out depends not only on your own sense of focus but the manner in which your office is set up. Here are a few tips:

• Make sure that you set up your office in a designated space that will not change. Instead of floating around the house with your laptop, have one single place to go every morning.
• Choose furniture that suits your purpose, the correct tools, and technology that will aid your mission and help you accomplish tasks more quickly and easily.
• Decorate in a way that inspires you to focus and work hard.
• Eliminate needless distractions such as television or the temptation to work on hobbies: if you play guitar, for example, do not have a guitar in your office (unless you’re a music teacher).

The advantages of working from home will continue to outweigh the disadvantages if you establish your office space in the correct way. When you think of your ideal home office, what do you envision?