Running a home business often feels more like a hobby or a sideline than a real business with office space and tons of employees, but that is not really the case. If you run a business, no matter if it’s just selling your knitting on Etsy or offering your writing services to other companies, then there are some things that you will (probably) need to do, including the following:
Officially Register Your Business
Just because your office is a hop, skip, and a jump from your bedroom doesn’t mean it shouldn’t be official. Registering your business gives it legit status and, depending on how you register, can protect your personal assets from business debts and decisions. By obtaining a virtual registered office address, you can also prevent people from identifying your home address via your business. Think of it as making your business wear a suit, even if you’re in sweatpants.
Yes, Get an EIN
If you’re thinking of hiring an employee—even if it’s just your nephew to manage tweets, then providing you are paying them, you’ll need an Employer Identification Number (EIN). It’s kind of like a social security number, but if covers your business rather than you as an individual. The good news is, getting an EIN is free and less painful than stepping on a Lego, especially if you use EIN number application service so definitely put it on your to-do list. Keep things nice and legal!
Open a Business Bank Account
It’s never a good idea to mix your personal finance with your business ones, not least because it can get confusing for you when you need to file your taxes. So it goes without saying that opening a business bank account is the smart move you need to make. Plus, it makes you look all professional when you whip out your business card to pay for business expenses.
Get Insured
No, it’s not just a scheme to get your money—it’s protecting your money. Depending on what your home business does, you’ll want different types of insurance. Think property insurance, professional liability, or even home-based business insurance to cover all your bases. It’s like an umbrella for when life decides to rain on your parade.
Understand Your Tax Obligations
Taxes are no one’s favorite thing, but if you are going to run a business, then you need to get to grips with commercial taxes and that means, to start with, keeping meticulous records of all your income and expenses, and getting familiar with which tax forms you’ll need to file. It might seem like a lot to take in, but once you’ve gotten to grips with it, it’s pretty easy to keep things running, and hey, there are always tax professionals to help you fi you get stuck.
Create a Dedicated Work Space
Setting up a specific area for work not only keeps you organized but also helps mentally separate work from home life. Plus, a dedicated work space can be a tax write-off. Make sure it’s comfortable and functional—ergonomics are your friend.
Set Work Hours
Just because your commute is approximately 30 seconds doesn’t mean you should be ‘at work’ 24/7. Set designated work hours to keep the work-life balance (and to prevent you from burning out faster than a cheap candle). Inform your clients of your work hours too, so they know when they can reach you—and when you’re off duty.
Running a home business can be incredibly rewarding, but it also requires you to meet certain obligations, so make sure you do it right!
