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Here's the SCORE

By Hannah Wallace February 29, 2008

The downturn in the housing market has motivated many people to start a home-based business. The overhead is low, it’s easier to start than a traditional business, and technology has made it possible to work just about anywhere.

In Sarasota and Manatee counties, about 47,000 businesses—75 percent of all businesses—are “nonemployers,” according to the U.S. Census Bureau. That means they are one-person operations, typically consultants or professionals working out of their homes, says Bill Murray, district director for Manasota SCORE, an arm of the Small Business Administration that offers free counseling. “We’re seeing a lot of people tied to the housing market looking for ways to supplement their incomes,” he says.

Lounging in your PJs while working may sound appealing, but it’s not as easy as it sounds. The failure rate for new businesses is high. To make sure you’re not one of the casualties, Murray offers the following advice to make your home-based enterprise a success:

Home Alone Tips

1. Prepare a business plan. “Most businesses that don’t make it cite a lack of planning” as the main issue, says Murray. “That’s why we are so big on doing a business plan.”

2. Determine local and state requirements for licensing and zoning.

Home-based businesses are allowed in both counties, but there are some activities you can’t do from your home, such as prepare food for commercial sale. Some homeowners associations may ban businesses in your home, but operating a home office typically isn’t a problem as long as there is no signage and not an excessive amount of traffic, or work trucks in the driveway. Many industries require a license. Check the state’s Web site on doing business in Florida: www.stateofflorida.com.

3. Register your fictitious name with the state at sunbiz.org. Give some thought to protecting your business name. “Typically, people will start as sole proprietors and later may incorporate,” Murray says. But you can run into problems if that corporate name is taken. If you plan to have a company Web site and sell outside Florida, you may want to consider seeking a U.S. trademark to protect your name.

4. Rent a post office box or commercial address offered at mailing centers.

Use the address on promotional material, making it less obvious that you are working from home.

5. Use a dedicated phone line for business. “The real issue is making it look like a business” and presenting a professional image, Murray says.

6. Organize your work space with great care, making sure you have sufficient space to meet your needs.

7. Schedule appoints at your clients’ office or rent a conference room.

8. Establish contacts with your competitors and join associations. Ask clients to refer you to other businesses.

9. Keep detailed records of business and travel expenses. “The IRS tends to audit home businesses more frequently,” Murray says. A percentage of your mortgage, taxes and utilities for a home office is deductible, but it has to be exclusively used for business. “It can’t be the kind of thing that you use the couch in your office for company occasionally,” Murray says.

10. Put aside some of your earnings for a rainy day. Slumps will happen.

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