Running A Business-Week 2–What To Know Before Starting a Home Based Business
January 10th, 2008 | by Jeniffer |There are many kinds of business opportunities.
You can produce a product for sale to customers, either in the public arena, or for others to sell for a profit.
You can supply goods that others have manufactured, deliver products which others sell, or supply a service for hire.
You could also purchase a franchise, sell an unusual idea to a company which will then produce it, and get a share of the profits when the product is sold.
You can also repair or rebuild items which are already in the marketplace.
Alternately, you can rent things to people, such as machinery or movies or places to live.
There are many different types of opportunities to go into business.
Last week, we covered some of the things you should initially consider before starting a business, home based or otherwise.
This week, we’ll be looking more at home based business opportunities.
One pro in having a home based business initially would seem to be the fact that it is based in the home.
However, closer inspection may reveal this as not being a pro at all.
There are many things to take into account in deciding to operate from the home, firstly whether or not you will be allowed to do so. Local regulations differ, and it is important to be certain you are allowed to open and operate a business from your dwelling before you begin to do so.
As well, consider that part of your living area will now be off limits for family based activities. Will your family be OK with this arrangement?
Do you and your loved ones have adequate space for the type of business you are planning to operate?
Will they be able to give you the physical space necessary, without interruptions, to run a business operation?
Do you have parking facilities which may be necessary?
How do your neighbours feel concerning increased traffic to the area, brought about by your business?
Will you require upgrades to the place where you live, such as in the electrical department (wiring, etc), or plumbing, in order to facilitate the home based operation?
Will your business be able to grow without moving, or will you have to consider moving as you expand? How will this impact your company?
Do you have in place services which you may need, such as an accountant, lawyer, insurance broker, etc? Even a home based business will require each of these.
Is there a good pool of available personnel for you to hire in the area, if required?
Would you be better off hiring private contractors, rather than initially offering permanent employment, as a cost saving measure?
Some municipalities require licences, some have restrictions regarding traffic, etc.
Check out local laws and regulations before you begin.
You may also be required to get a business licence.
Even if yours is to be a home based business, if you operate under any name other than your own name, you must register it. Even if using your own name for the business, I would recommend that you file the name of your company.
You must contact the Department of Labour to learn about Labour Standards, and you must register with the Workers’ Compensation Board if you plan to hire anyone.
In Canada, you should also register with Revenue Canada to set up appropriate income tax deductions. Although I was told it was unnecessary to do so, I would register for a GST number, even if your projected yearly income is below $30,000.
I would recommend looking into joining your local Chamber of Commerce, for information, support, and networking opportunities.
As well, it is absolutely vital to get the correct insurance, including liability, vehicle, etc. A qualified insurance broker can discuss your needs and costs with you. Liability insurance is particularly important if clients/customers will be using your premises to meet with you, or for any other purpose. As well, the machinery/supplies, etc, you will be housing for the company must be insured against fire, theft, or other damage.
Next week, I’ll look at funding, and the how and why in the making of a business plan.
