Running a business in your home sounds like a good plan. It can be considered as a great idea because it brings more convenience and is a money-saver. Surely, running your business from your home means you can save more money because the less expenses you need to pay. You don’t have to rent a building for the office.
You also don’t necessarily need transportation cost because you run your business literally from home. Everything seem more controllable especially for expense wise. However, it is not something you can do carelessly either because there are some considerations you need to think before starting it properly.
Starting a business in home
Starting your own business regardless of the scale should be planned carefully especially if you have goal to make it last in the long run. Even if you plan to run a business in your home, you need to consider various factors so it can run smoothly. Here are things you need to consider:
1. Make your business legal and registered
You must run legal business to avoid legal consequences in the future. Therefore, you need to consider zoning waiver before running your home business.
You should actively get information regarding to this matter so you know what to prepare to get the approval. This matter may be different depending on the city and its regulations. Sometimes, you’re the neighbours’ approval is also required if you want to get approval to run a home-based business.
2. Financial resources
Just because home business is considered as a money-saver doesn’t mean you can ignore the finance. No matter how small your business is, you will still have to plan your finance.
If you don’t have personal cash ready to fund your business, you might need to propose a loan to lenders or banks. However, not all lenders or banks are willing to lend you money to operate home-based business. Most of the lenders ask you to prepare a well-thorough business plan to get their approval.
3. Business insurance
Another issue you need to consider before starting a home-based business is the insurance. Keep in mind that homeowners policies do not include or cover business liability coverage. Therefore, you might need to consider having separate business insurance coverage which specified in business property and business incidents. The liability coverage is important especially if you will have employees or customers in your home.
4. Commuting expenses?
Travel expense should be included into consideration as well even though you think it won’t appear in your business expenses. The good news is, it is actually deductible. Meanwhile, commuting expenses are never deductible.
5. How professional you are treating your home-based business?
It is also important to treat your home-based business like a business. Just because you operate it form home doesn’t mean you can mix the finance with your personal finance.
Business is business so you need to ensure yourself that you can commit to it properly. You still need to separate business and personal bank accounts and use sufficient tools and systems to run your business. You can figure out some ways to deduct your expenses especially a portion of your home expenses.