So, you’ve decided to take the plunge and start your ownhome-based business. Congratulations! You’re on your wayto true financial independence. Protect your business andyour livelihood by making sure you have paid properattention to the following:
1. Cash Flow
Do you have the adequate working capital to support yourbusiness (to support you!)during its early stages? Have youstarted your business part-time while continuing to workfull-time to make sure it is a viable income producer foryou and that income is adequate for your needs? DON’T giveup your day job until you can give an unequivocal YES tothese questions most opportunities are best severed by training.
2. Business Licensing
Have you obtained all the necessary licenses and registrationsfor your business? Are you working with someone that is a leader in the industry you’re looking to go into? Do you comply with your local zoningregulations? This is especially important for both legal andinsurance reasons if you expect to have clients visit yourhome office.
If you expect to have clients visit your home office, haveyou have taken out insurance in case they are injured on yourpremises? Your normal homeowner’s insurance will NOT coverbusiness visitors unless you notify your insurance companythat you are operating a business from home and the insurancethe company endorses your policy to include this risk.
In all other cases, you should take out a separate policyto cover your business visitors. In this regard, whetheryou comply with local zoning regulations may be important.Your insurance company may refuse to cover you if you areconducting your business illegally. For these reasons, it
is imperative that you obtain all proper registrations andlicenses for your business.
Another type of insurance you should take out in publicrisk insurance. No matter the nature of your business,if you are dealing with other people (and what businessisn’t?), you should have public risk insurance to cover youin case of a claim for negligence.
A third type of insurance to consider is income protectioninsurance. If you have made the transition from paidemployment to self-employment, you no longer have thebenefits that went along with your paid job which may haveincluded disability or income protection insurance. You willneed to purchase this cover for yourself.
Once you have left the paid workforce, you may find that youhave also left behind your medical, dental and optical benefits. You need to make sure you purchase adequateinsurance for these expenses.
5. Accounting and Tax Advice
The best time to seek accounting and tax advice is beforeyou start your new business. Your accountant will be ableto advise you about things such as the most tax-effectivestructure for your particular business and what types ofexpenses you can claim against your business income. It isimportant to obtain this advice at the beginning of yourbusiness venture so you know exactly what records you shouldbe keeping and whether it is best for you to purchase orrent capital equipment such as your computer.
6. Time Management
Make sure you have thought through how you will deal withthe day to day distractions that will come up when you workfrom home and plan accordingly. For example, if you knowyou will not be working from 3:00 pm until 8:00 pm becausethis is the time between when your children return fromschool and when they go to bed, try to schedule as manynon-business activities for this time period as possiblerather than taking breaks during your business hours. Needmilk? Get it when you’re out picking the kids up fromschool, not at 11:00 am because it’s easier than startingthat new webpage. Remember, self-discipline is your bestfriend and vital when working from home. Procrastination,on the other hand, is your greatest enemy.
Working from home is the dream of many. Don’t let thatdream turn to ashes by overlooking the “basics” of soundbusiness and risk management.
Sean Grant / by Elena Fawkner
Does all this seem like a lot to process? Don’t worry! The insurance experts at Elite Insurace Brokers are here to help answer your questions, address your concerns, and guide you in the direction of a final expense life insurance policy that fits your needs and your budget. Visit us today to get a free, no-strings-attached quote, and then come back often for more information and inspiration about life and life insurance!
In the spirit of transparency, this blog post is for informational purposes only. We know how quickly things change, so we can’t guarantee the content and links to unaffiliated parties are up to date.