The David Storrs Group - Suggestions for Home Business

Working from Home – PJ's and the New Work-Place?
Corporate Website:  http://www.davidstorrsgroup.com
Colleague Recommendations: http://davidalanstorrs.blogspot.com/2013_09_01_archive.html

Sometimes it’ s hard to be taken seriously when you work from home. The stereotype of the typical home office worker is someone who spends most of the day in a robe. Yet how much of that is reality?

Sure, there are days when I start writing early, get on a roll and look up to see it’ s noon or later and I haven’ t taken a shower. But most of the time I try to get ready before I sit down to work. It’ s too easy to spend the day in pajamas. It’ s not fair, but it’ s true that when you work from home you have to be more organized, more disciplined and more professional than your corporate counterpart.

In its recent study, The Entrepreneur Next Door, the Kauffman Foundation indicates that entrepreneurship is as widespread in the United States as getting married or having a baby.  More than 10 million U.S. adults are actively engaged in creating businesses, often with a friend or colleague. With lay-offs and corporate downsizing filling the news, no wonder sources as mainstream as USA Today and MSN are recommending entrepreneurship as the new corporate lifestyle.

Laid-off and downsized workers are “making lemonade.”  Instead of sending resumes, they are investing in themselves by starting businesses or purchasing franchises. Gladys Edmunds, USA Today, says it best—when you leave your job, you take with you the skills and talents that you own—plus the experience you got during employment. 

Many choose to become consultants or independent contractors in familiar industries. Others take transferable skills like salesmanship or project management and apply them to new ventures.  Some use their newfound freedom to turn a hobby into a profit center.      
Whichever entrepreneurial direction you choose, select a business structure that works for you and your family. Many businesses start as sole proprietorships or partnerships. 

However, these structures have unlimited personal liability for company debts. As a result, many business owners opt to incorporate or form a limited liability company (LLC) to protect their families and financial interests. Businesses may change structure at any time.  Here are the most critical items to consider when selecting—or re-selecting—your business structure.

1. Protection of personal assets—Sole proprietors and partners have unlimited personal liability for business debt or law suits against their company. Creditors can attach homes, cars, savings or other personal assets. Incorporating or forming an LLC helps separate your personal identity from your business identity. Corporation shareholders or LLC members have only the money they put into the company to lose.

2. Pass-Through Taxation—For sole proprietors and partners, company profits/losses pass directly through to their personal tax returns. For corporations, profits are taxed, then the profits that are distributed to shareholders as dividends are taxed again on the personal level.  This “double taxation” can be avoided while still enjoying the benefits of personal asset protection by forming an LLC or by electing an S Corporation. S Corporations and LLCs can be taxed just like partnerships.

3. Uninterrupted business—Sole proprietorships and partnerships may automatically end or become legally entangled when one owner dies or retires.  Corporations and LLCs are enduring legal business structures. They may continue regardless of individual officers, managers or shareholders. Corporation ownership may be transferred, without substantially disrupting operations, through sale of stock.

4. Access to Capital—Sole proprietorships and partnerships may find investors hard to attract because of personal liability. Investors are more likely to purchase shares in a corporation where they can separate personal and business assets.

5. Credibility with vendors and customers—Adding “Inc.” or “LLC” to your company name helps your business seem larger and more established!
Next, you will need a business plan. Take time to think through the suggestions below:

·       Take the long view and do long-term planning. Map out where you want to be five years from now and how you plan to get there.

·       Write the plan yourself. You will learn more about your business by doing so.

·       Think of your plan as a living document. Review it regularly to make sure you are on track or to adjust it to market changes.

·       Share the plan with others who can help you get where you want to go—such as lenders, key employees and advisors.

·       Understand that you might pay a price in the short run to obtain long-term business growth and health.

      Don't worry .... If you stay with it, be consistent and true to your clients, partners, brand, yourself and what you stand for, it will be worth it!