When working from home, it can be very easy to cut some corners and leave things out. Falling into this trap can be a huge error on your part and can cost you loss in profits and potentially even a loss of your business. Setting things up the right way will help you to build a strong foundation for your business to grow on.
Having a system for accounting in place for your business in imperative for success. Just like with your personal finances, you need to be able to account for the money coming in as well as for the money going out. Not only will this information be important for you, personally, but it will be needed come tax time. Another time that your financial documents will come in to play is if you need to prove the success of your business for loan purposes; business and personal alike.
Keeping track of your income and expenses does not mean that you have to go out any buy special software and then try to learn how to navigate through it all. Accounting can be done in just about any fashion that you are able to do. If you are computer savvy, you can get software that can ease the process of tracking your finances, there are plenty of programs that are already loaded on most computers, or an Excel spreadsheet can be used. If you are not comfortable with a computer, there is no reason why you can’t use the tried and true paper, pencil, and calculator. Regardless of what you use, make sure that you are comfortable using it so that you can maintain it.
Not every business needs to have a business license, but many do. Before you begin anything where money is trading hands, find out if you need a license to do business. Do not operate your business without a license if one is required as you will then be liable for anything that may go wrong as you will most likely not be covered by insurance.
Depending upon what the business is that you are running out of your home, you may need special insurance coverage. Do not overlook this as you could have issues you do not want to be involved in should an issue arise. It is often thought that just because you do not need a business license or that you are not doing a business that could potentially harm another (like massage), that insurance is not needed. This is a costly misconception. Before you open your doors for business, call your insurance company, or one that deals with business insurance, to find out if you need to have coverage. Even if you do not need coverage, you may need to change your current insurance policy in order to cover your new business. If you have people coming in and out of your home or even hold a significant amount in inventory, your insurance company may want you to have additional coverage. Auto insurance could need to be changed as well, especially if you are carrying any sort of inventory that needs to be covered in case of a loss.
Operating a home-based business should be treated as seriously as if you operated one out of a building. Any business is just as important as another, regardless of where the headquarters are. Having a strong foundation in which to build on will help you to see the growth that you desire.