Home Business

Studying Relevant Planning and Development Restrictions

How will you use your home to operate your home business? That question is a big one - and one you will have to answer to the satisfaction of your local planning commission, as well as your landlord if you rent. Those living in condominiums or other planned developments will need to review their CC&Rs (Covenants, Conditions, and Restrictions), which might restrict or forbid a home business. Whether you need to speak to a city planner, your homeowners association, or your landlord, their concerns will be the same:

They do not want you doing anything that will create noise, traffic, or eyesores that will in any way interfere with the quality of life in your neighborhood. Homeowners and planners will particularly be concerned with a possible decrease in property values. The following sections discuss specific ways you can track down and familiarize yourself with the relevant rules and restrictions governing small businesses in your neighborhood.

Determine That Your Business “Fits” As a Home Business

Is your business suitable as a home business? To make that determination, ask yourself how well your situation matches these descriptions:

• Almost no clients will visit your office. When they do, it will be rare and will be one car/one person at a time. Someone viewing your home from the outside would not know that a business is being run inside.

• You will rely heavily on phone, fax, email, and regular or “snail mail,” and you will frequently visit clients at their offices or meet them at a coffee house or restaurant - if you have to visit them at all.

• You are probably offering a service. If you are offering a product, it is either solely offered over the Internet or through mail order; or it is in conjunction with, or resulting from, your service business.(For example, as a writer, I offer both a service and products (books), but people don’t come to my house to buy them.

• You regularly employ only yourself and can run the business without permanent, full-time employees. (Occasional or temporary help is fine. More on this later in the article.)

• Your business does not require exterior signage or equipment that’s too large or otherwise incompatible with in-home use.

• It would be virtually impossible for someone passing by your home on foot to know that you are conducting business.

• Your home can accommodate any special needs the business will require - such as adequate space for activities and necessary equipment (copiers or printers for a small printing business, room for temporarily holding dogs for a dog-walking business, space for producing soap and bath salts for a small toiletries business, and so on). The less your business fits the preceding profile, the more difficult (but not necessarily impossible) it might be to actually operate your business from home.

Two important factors might give you the setting you need even if your business differs radically from what is detailed previously: the specifications of your own home and your local area’s planning guidelines. If your home is a studio apartment, you will be much more limited than if your home is a 10-room house with one or two acres of land. Setting aside a storage room, or setting up a shed, for your business is much easier if you have the space for it. The long-term development goals of your community - as expressed by your city or county’s planning department in the form of building codes, use regulations, and other rules - will also greatly determine how close your business must fit the previous description. Which leads us to our next “make or break” consideration.

Overcome Your Inexperience

Everyone has to start somewhere no matter what kind of home business your getting into or getting involved with. So don’t let that hinder or slow down or be an excuse that your inexperienced in the home based business industry!

I noted that ageism actually works in your favor when you strike out on your own. Owning your own business remakes you from an employee who seems “too old” into a consultant who is wise and experienced.

Conversely, if you are on the opposite end of the experience ladder, you might struggle gaining the confidence of potential clients. If you don’t have at least three to five years of experience in your chosen line of work, you will need to prove to prospective customers that you have what it takes to work for them. (And no, a college degree, in and of itself, won’t cut it.) For those with little or no experience, you might have the necessary credibility if you:

• Started a business (and operated it successfully) earlier in your life

• Worked at a job in your chosen field while attending school

• Have a solid background in business in general and possess sufficient basic business and interpersonal skills (often called “transferable skills”) In all three cases, however, you will be working harder than other business owners, who have the experience you don’t. Seriously consider this. The average 12-hour day of a new business owner might be 14 or 16 hours for you, as you gain experience others already possess.

Calculate the Cost of Home Business Health Insurance

Pick up any newspaper, visit any news site on the Internet, and the current health insurance situation screams from the headlines. Health insurance can be expensive, tough to get, and insufficient when it comes to covering chronic illnesses or prescription drugs.

Is the need for health insurance a deal killer? Perhaps not. Consider these options:

• Check whether your spouse or partner’s employer can cover you.

• Join a group offering health insurance. Check with your local chamber of commerce or professional industry group. These plans often allow participation without minimal restrictions on prior conditions, and are less likely to require a physical or reject you for a health condition.

• Choose to form a partnership or corporation, which might qualify you for group rates. Talk to a benefits specialist about the minimum requirements for obtaining group insurance and the difference in pricing between an individual and group policy.

• Continue your employer’s coverage via COBRA (Consolidated Omnibus Budget Reconciliation Act), national legislation enacted that allows an employee to continue health insurance through his or her employer, even after leaving. There are a number of restrictions and requirements—for example, you must be working for an employer with at least 20 employees or more and be currently enrolled in the health plan. If eligible, you (and possibly dependents you also covered via your employer’s health plan) would be able to continue this coverage for 18–36 months, depending on your circumstances. However, this does not mean that you will pay the same amount currently deducted from your paycheck—you will be paying your employer’s contributions to your health premiums as well, making the total cost higher, and often prohibitive. (For more information, visit dol.gov/dol/topic/health-plans/ cobra.htm and www.dol.gov/ebsa/faqs/faq_consumer_cobra.html.)

Not sure who to contact as a benefits specialist? My recommendation is Maria Poroy, Access Business Services, Inc. She can be reached at accessbenefitsgroup.com. Based in California, she is licensed in some other states as well. Maria has been invaluable to me when assessing health insurance options. Or, you might want to check with the National Association of Professional Insurance Agents (pianet.com) or the Independent Insurance Agents and Brokers of America (iiaa.org). See Appendix A, “References and Resources,” for more insurance resources.

Clear Up Outstanding Legal Issues

Is there a student loan that you “forgot” about? Do you need to attend traffic school—but haven’t, even though the ticket was five years ago? Are you in the middle of a divorce, or waiting for the divorce to be finalized? Are you aware of any outstanding arrest warrants? Is the IRS trying to collect money from you? Do you have a lien against your house or other property? Do you owe property, state, or local taxes? These issues will come back to haunt you, especially when you begin the process of launching a home business.

Starting a business means that you will be filling out paperwork - and that paperwork will enable many government entities to find you. What’s more, your marketing efforts will be telling everyone about you and your new business. The entire world will know about you, so if you have to clean up some neglected legal or tax issues, now is the time to do it. When you take care of the problem, be sure that you know how long any such delinquency will appear on your credit report or criminal record. Credit problems, once fixed, might remain on your record for as long as 7 to 10 years. Criminal matters might stay on your record indefinitely.

Be sure that you know what consequences are likely as a result of tax or legal issues. Most problems won’t necessarily prohibit you from owning a business, but you will need to know, for example, that a bankruptcy on your credit report means that you won’t be able to get a business loan for quite some time.

For criminal matters, enlist the help of an attorney. (You can usually obtain a referral from your local bar association.) Tax and financial matters can be resolved with the help of an accountant or credit counselor. If you need a credit counselor, be sure to use a nonprofit agency. Avoid scams that offer to clean up your credit for a price.

Tomorrow we will talk about health insurance for work at home businesses!

Review Your Employment Contract

Before you put the first word on your business plan, take out your current employment contract and read it carefully, word for word. If you have emails, letters, or other documents instead of, or in addition to, a formal contract, read those, too. Don’t assume that stipulations agreed to in email are not binding because you “didn’t sign anything.” In many instances, such emails can be considered evidence of what is called an oral contract, and therefore legally binding.

If you are unsure whether you would be held to the terms, consult an attorney. Did you agree not to contact customers about your impending departure from the company or for a given period of time after leaving the company’s employment? Are you required to provide a certain amount of notice? Are you allowed to pursue a business that competes with your current employer? Employment contracts often include language that restricts or prohibits direct competition, taking customers, and similar activities. Be sure that you know what limitations you must abide by prior to starting your business. But what do these limitations mean, in terms of your business? It depends:

• If you are planning to start a business in direct competition with your employer, and your employment contract forbids it, your home business plans might be thwarted. However, if the non competition language seems broad, you might want to have an attorney review it to determine whether it is enforceable. But bear in mind that you might have to fight your employer in court to prove how unenforceable it is.

• If you are not allowed to take current customers with you, you might have to allow for a higher marketing budget. Check whether your contract allows you to have any contact with these customers at all - even if they cannot be your customers, perhaps they would be willing to refer others, thus partially circumventing this restriction. As your excitement about your business escalates, you will want to tell the world. Don’t do it (not yet, anyway).

Although you might be very excited about your new venture, your co-workers might have very different feelings. They might be jealous, longing for the courage you have and envying your ability to make such a transition. Meanwhile, your boss could become suspicious, wondering if you are stealing supplies or customers, wooing other employees to be part of your new venture, or just not being as loyal as he expects you to be. Depending on your company’s policy and your current job, you could even be escorted out the door as soon as you announce your plans. Keep quiet until you give notice with a specific plan in mind.

Creating Your Business Plan, Part 1: What, Where, When, and How

Okay, you now know that you can do this. But where do you start? This article takes you through the biggest obstacles first - those half dozen “deal breakers” that might make you seriously rethink starting your home business. Then, step by step, we will outline a business plan for your home business. You will describe your business and its structure, document who your customers are, and define what services you provide and how you get business. Your business plan must also outline the financial plan and structure of your home business;

Home Business To do list

- Review employment contract

- Investigate health insurance options

- Scrutinize experience

- Compare desired business with actual home

- Review planning and development restrictions

- Hold a family/household meeting

Eliminating the Biggest Obstacles

There are six major obstacles to your home business - what business negotiators would call “deal killers.” These obstacles include limitations imposed by your existing employment contract, any outstanding legal issues you might be facing, your health insurance costs, inexperience in your chosen field, neighborhood restrictions, and family objections to the home business. Most of these obstacles can be resolved. But before you consider the cost of a new computer or give notice at your current job, you need to determine whether any of these issues present insurmountable barriers to the success of your new business.

You’ll need list

- Self-employment journal

- Current employment contract and related communications

- Copies of all current rental or homeowners’ restrictions/guidelines

Later we will start with your employment contracts

Summary

Marketing isn’t sleazy, yucky, expensive, or phony - unless you make it that way. (And of course, you won’t.) How you market your business will largely depend on the type of business you run and your own personality. But don’t be fooled into thinking that you are marketing because you’ve responded to Internet ads all day— getting out in front of other people is vital. In fact, marketing isn’t really a separate activity at all, but an integral part of how you operate your business.

Here is a list of the posts that summarize what we talked about.

Work At Home Business Marketing

Marketing Your Home Business

Understanding Home Based Business Marketing

Marketing You and Your Home Business

Announcing Your Home Business

Writing Letters For Your Home Business

Tried and True Home Business Marketing Techniques

More Work At Home Business Marketing Techniques

Few More Work From Home Business Strategies

How Much Home Business Marketing Is Enough

Using Professionals to Help You Market Your Home Business

Finding Professionals to Hone Written Marketing Materials

Using Pros to Craft Your Web Presence

Take care and stay tuned for more information on home based businesses and our work from home opportunities!

Using Pros to Craft Your Web Presence

And what about your web page? There are several basic functions you will need to cover when you have a web presence, and it is very rare to find one person who has all of these skills. However, you should be able to find

• Webmasters, who have the technical know-how to create and maintain the site you want. Some might only create the site, leaving you to go elsewhere for maintenance.

• Web designers, who are more concerned with how the site looks (from a graphic design perspective).

• Web marketers, who can help you drive traffic to your website, and get it noticed.

• Web hosts, of course, merely keep your site on display on the Internet. Because of the many specialties needed, you might have a webmaster who consults with your marketing person and graphic designer (to keep your website focused on your message and to give it the same look and feel as your printed materials, respectively). Covering all the duties involved is more important than what a person might call himself.

Finding Professionals to Hone Written Marketing Materials

Here is a list of the most commonly used professions to help you market your business via written documents - and what to look for:

• Graphic designer - This is someone who takes care of how your marketing materials look. He will take the text, logo, and other information you give him, and lay it out in a way that is visually pleasing. You might believe you can do these tasks yourself, but think carefully about this decision. Layout and design is both an art and science, requiring a professional sense of what catches the eye, how much whitespace is needed, and whether the page is balanced to laying out the materials in a way that fits web or print specifications. Some designers will do web materials as well as printed matter, although most who do will limit their activity to technically simple sites (for example, with no e-commerce or linking databases).

• Printer—Yes, this is the person or business who prints your materials from postcards to flyers to brochures to business cards. When selecting a printer, ask for samples of her work and a written estimate of cost and turnaround time. Look for the little details that can make your life easier, too, such as free local delivery and an explanation of why it is best to print a particular document in a certain way. Don’t be afraid to ask about price breaks, either. Most printers can offer substantial per-piece discounts when more of a particular item is printed. So if you’re thinking about printing brochures, for example, ask for an estimate to print both 500 and 1,000 brochures. The price difference might be minimal. Some printers specialize in environmentally friendly inks and paper, but their prices might be substantially higher than traditional printers.

• Writer - These individuals can craft the language you use in your flyers, brochures, and other printed or web materials. They might also help you write speeches or come up with written handouts to give to audiences when you speak. As with the printer and graphic designer, the writer should be able to provide you with a written cost/time estimate and relevant examples. Delivery of the text should be relatively easy, too - be sure that the writer has the software you need, or can easily email text to you in a useable format.