Many aspiring entrepreneurs — particularly stay-at-home moms — start their businesses at home. This minimizes some of the startup costs and risks, but also has some down sides. Below are five important elements to keep in mind when first starting a home-based business.
Choose the right location
If you decide to run a business out of your home, try to set aside a separate room for your business in order to avoiding distractions. You can deduct the space on your business taxes. If you decide to run your company outside the home, choosing the right location is important. A local commercial realtor who knows the area, traffic patterns — and maybe even something about your industry — can be helpful. Tip: Never sign a lease before having an attorney review the contract.
Get your family’s buy-in
Whether your business is home-based or not, your family will feel the impact of the startup, so it’s crucial to make sure your spouse and children are willing to do what it takes to support you. You might even want to get them involved in the business, so they feel a part of the action.
What equipment will you need for your business? Decide what you absolutely need now and what can wait on purchasing until your business grows. Don’t plan to just use the family computer or the same tablet computer your kids play games on. Make sure your equipment is separate and specifically designated for the business, or the IRS may decide you are working on a hobby, not a business (not to mention you’re exposing yourself to potential computer viruses).
Set ground rules
Make sure your family, friends and neighbors understand that you’re running a business. Otherwise, you could face constant interruptions, or neighbors who think you’re available to help run their errands or watch their kids for a few minutes.
Plan for childcare
Don’t expect to get much work done if you have young children at home. Even if your children are in school most of the day, figure out how you will handle the hours when they’re home and what backup options you can put in place during school vacations or when the kids are home sick.