Flying Without a Net

Flying Without a Net

© 2003 Elena Fawkner

One of the most exciting and daunting things about
starting your own home-based business as your sole
means of income is the reality that no one is responsible
for your success or failure but you. The lure of the
home-based business is undeniable. But before joining
the revolution, take the time to think about the real
implications of self-responsibility. In the past, you've
always had the security of knowing that your employer
was taking care of the background details ... you know,
those little things like retirement plans, health insurance
and capital investment. And making enough money to
cover your salary and vacation time. Now it's all down
to you.

So, let's take a look at four of the biggies: health and
safety, insurance, tax issues and zoning.

HEALTH AND SAFETY

No matter how much you've invested in setting up your
business, nothing is more valuable to your business or
to you as your good health and safety.

Apart from obvious measures such as ensuring you have
adequate health insurance, keep the following basics in
mind.

=> You Are Not A Machine

Take regular breaks. These are important for your
physical and mental health, not to mention your
productivity. Breaks can be particularly important if your
livelihood requires you to spend hours on end in front of
a computer. The last thing you or your business needs
is for you to develop carpal tunnel syndrome!

Avoid the temptation to do household chores or errands on
your break time. That's not a break. Do something that
breaks the mental spell, something that gets you out of
your work environment for fifteen minutes every couple of
hours. Go wander around outside and take some deep
breaths to cleanse your lungs. Lift weights. Call a friend.
Go sit in the backyard with a cup of cocoa and enjoy the
sunshine. It doesn't matter what you do, but make yourself
do it. Set an alarm to remind yourself if you must.

=> Use the Correct Equipment the Right Way

Make sure you use the correct equipment for the task at
hand. If your work requires long hours in front of a computer,
make sure that your desk and chair are properly aligned and
your work area is well lit. Ensure you maintain good posture.

=> Nap when sleepy

Many home-based business owners work odd hours. That,
after all, is one of the advantages! But if you start working
very early or work very late into the night, your sleep patterns
need to adjust accordingly. Therefore, if you find yourself
feeling sleepy mid-afternoon, take an hour's nap. Any longer
though and you'll risk waking sluggish and tired. Set an alarm
to wake you if think you'll go longer than an hour or 45 minutes.
Don't tell yourself you can't afford the time to take a nap. A
nap will do wonders for your productivity and you will be
refreshed and ready to get back to work. You'll find you'll
accomplish much more by the end of the day than you would
have if you forced yourself to keep ploughing ahead even
though you were so sleepy you couldn't think straight.

=> Home Alone Security

Security is an issue for any home-based worker. Apart from
personal security which is always an issue for everyone
wherever they work, the home-based office with its usual
array of expensive computer and other office equipment, and
heaven knows whatever else electronic gadgetry is a prime
target for thieves. So take these basic precautions:

* Don't expose your expensive office equipment to the
view of casual passersby. Obscure the view with foliage
(but not so much that you provide a place for would-be
intruders to hide) and draw the blinds when you're away
from home.

* Keep your doors deadbolted when you're home as well
as when you're away.

* Think twice about inviting new clients to your home office.
Try and meet at the client's office wherever possible or, if
not, at a neutral location.

* Ensure your property is well lit at night to deter intruders.

* Don't advertise the fact that you work from home.

* Consider using a post office box for your office address.
This is particularly useful if you run an online business and
are concerned about revealing your residential address to
all and sundry.

* Get an alarm system installed and display the alarm
company's sign prominently on your property.

* A dog can be a great security device, not to mention
company for the solo worker!

INSURANCE

Don't rely on your homeowner's insurance to cover your
business. Most policies limit loss of business property
to $2,500 and don't cover losses away from the home.

And you can just forget about claiming on your homeowner's
policy for injury sustained by a client visiting your home
office.

So ensure you obtain business insurance separate from
your homeowner's policy or, if your insurance company
offers it, an endorsement to your existing policies. This
type of extension, where available, can be as low as an
additional $200 or so annually.

The kinds of risks to consider, depending of course on
the nature of your business, include:

=> Health and Disability

Check with any trade or professional associations of
which you are a member for health insurance packages.
Many such associations will have negotiated insurance
packages for their members and this can be a good way
of getting good cover for a cost-effective price.

Other types of insurance to consider are disability
insurance in case you can't work due to illness or
disability and workers' compensation (remember, you may
be an employee of your business). Depending on your
personal situation, you may also want to consider key
man insurance which protects your business in the event
of your death. The business becomes the beneficiary
under this type of policy and this cover is intended to enable
the business to replace you.

=> Property

This covers your physical assets - furniture and
equipment, inventory and supplies including, where
required, cover for equipment taken away from the
premises such as laptop computers.

=> Liability

There are three main types of liability insurance.
Depending on your business you may need only
one or two or all three. The three types are (a) general
liability which covers you for accidental injuries sustained
by business visitors; (b) professional liability if you are a
member of a professional occupation such as a lawyer
or an accountant; and (c) product liability which protects
you against damage caused to a third party as a result
of a defective product.

=> Business Interruption

This type of insurance covers your lost profits as a
result of some insured event which makes it impossible for
you to carry on your business such as a fire or flood.

TAX ISSUES

One expenditure you should definitely not try and avoid
is an accountant to prepare your taxes. There are many
home office tax deductions available but they are scrutinized
carefully by the IRS so make sure you get professional
help in this area.

The types of deductions available to the home business
owner include a proportion of your housing costs and
expenses if you use a part of your home exclusively for
your business; use of your car for business purposes;
health insurance; postage; trade magazines and other
business-related publications; and capital equipment.

The best way to save money on accountant's fees is to
keep accurate, organized and complete records. Keep
your receipts organized so that when tax time comes you
can hand everything over to your accountant in a nice
neat package.

In addition, do not hestitate to contact your accountant
for advice if and when you intend to take on employees.
A whole slew of responsibilities goes along with
employing others in your business including withholding
tax and social security benefits and workers' compensation
to name just a couple.

ZONING

Finally, a word about zoning. Zoning laws can be
inconsistent so just because your friend Dave can run
a business out of his garage in town X doesn't mean you
can do the same thing here in town Y. Some municipalities
will give you a hard time if you're receiving clients on the
premises but will turn a blind eye if you're not. Others
focus on the detriment your business causes to the
amenity of your neighbors. If your neighbors find they
can't park their car in their own street because of the
flood of traffic to your door, expect problems. Also, don't
expect to be able to erect a sign in front of your house
or, possibly, anywhere visible from the street, advertising
your business. Still other municipalities will restrict
the numbers of employees that can be employed in the
home business. In these municipalities you often won't
have a problem if you're a solo worker but once you start
hiring employees to work on the premises you may have
trouble.

So, before you start your business and invest a lot of
capital in getting set up, check with your local authorities
what, if any, zoning restrictions you need to be aware of.

These are just a few of the major headache areas when
you cut the ties and set out on your own. By taking the
time to get these things in order before you get underway,
you'll create a safety net for yourself and your business so
that when things go wrong, as they inevitably will, your
dream of a home-based business of your own will continue
to be a happy reality and not a nightmare.

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Elena Fawkner is editor of A Home-Based Business Online ...
practical business ideas, opportunities and solutions for the
work-from-home entrepreneur.
http://www.ahbbo.com