How to Plan a Home-based Business - written by Aaron Wilmont

As you start on your entrepreneurial business path, many things must be considered, or failure becomes a distinct possibility. You should not allow your business asset to wilt just because of mistakes in your fundamentals. With regards to time management, you should think through how you will deal with the day to day issues that will surely occur and plan for them. Always combine tasks when you are able.

Do your best to anticipate your expenses and then be prepared for unexpected expenses along the way. Keep your expenses minimal, especially in the launch phase. You must of course get well informed tax advice from a certified professional before you launch your home-based business, not after you have launched it. In this way you can structure for the best tax advantages based on your specific needs. You should definately set this up beforehand so that you know which records you should be keeping. Be sure to look into all the benefits you will require because you will not be getting them through an employer any more. You will also want to ask a certified professional who has experience in corporate law about which entity will best protect your business and reduce your tax burden. For instance, should you form a subchapter S corporation, C-Corporation or an LLC? Each of these entities has their own unique tax advantages and disadvantages(it is rarely adviseable to form a limited partnership for liability reasons). For the majority of home-based businesses an S-corp is often the best bet. You should check with a qualified accountant first to be sure about
your specific circumstances. It is also adviseable to have the right insurance coverage. Do not overlook this. As an example, your standard homeowner's insurance probably won't cover business visitors unless you notify your insurance provider first and let them know that you will be running a business from home and that they approve your policy to include this.

Obtain all the needed licenses and/or registrations for your home business and be certain this includes state, federal, county, etc. Be extremely careful to comply with your local zoning restrictions. Also find out what percentage of sales you need to set aside for taxes as well as whether or not you'll need to make quarterly tax payments. This can be an important area so you will want some professional council here. This is important for both legal and insurance reasons if you are going to have your customers visit your home office. Then there is the funding issue of your home-based business. Make certain ahead of time that you have the right amount of capital during the early phases, which is atender time. Undercapitalization is one of the main factors in small business failure. So do not quit you "day" job before your Business can support you comfortably.
You also must control your cash flow. Cash flow planning helps eliminate uncertainty. This is vital. Try to identify obstacles and move forward armed with data. With this data you can make plans and changes to improve your home business.