Is a Home Based Business Site Allowable?

Now you will want to investigate potential legal and community problems associated with operating the business from home. You should gather read and digest specialized information concerning laws and regulations concerning home based business operations.

Check first! Get the facts in writing. Keep a topical file for future reference. Some facts and forms will be needed for your business plan. There may be limitations enforced that can make your planned business impossible or require expensive modifications to your property

Items to be investigated, recorded and studied are:

County or city zoning code restrictions

Necessary permits and licenses for operation

Laws and codes regarding zoning

Deed or lease restrictions such as covenants and restrictive conditions of purchase

Parking and customer access; deliveries

Sanitation, traffic and noise codes

Signs and advertising

Code requirements for space, ventilation, heat and light

Limitations on the number and types of workers If not, check with the local Chamber of Commerce office

Reservations that neighbors may have about a business next to or near them

Is the Home Based Business Site Insurable?

In addition to community investigations, contact your insurance company or agent. It is almost certain that significant changes will be required in your coverage and limits when you start a home based business. When you have written a good description of your business, call your agent for help in insuring you properly against new hazards resulting from your business operations such as:

fire, theft and casualty damage to inventories and equipment

business interruption coverage

fidelity bonds for employees

liability for customers, vendors and others visiting the business

workmen's compensation

group health and life insurance

product liability coverage if you make and/or sell a product; workmanship liability for services

business use of vehicle coverage

Overall Home Site Evaluation

After you have gathered as much information as seems practical you may wish to evaluate a home based site vs. one or more other nearby locations. Here's a handy checklist. Using the "0" to "10" scale, grade these vital factors:

Factors To Consider Grades for each factor: Home / Other

1. Customer convenience ______ ______

2. Availability of merchandise or raw materials ______ ______

3. Nearby competition ______ ______

4. Transportation availability and rates ______ ______

5. Quality and quantity of employees available ______ ______

6. Availability of parking facilities ______ ______

7. Adequacy of utilities (sewer water, power, gas) ______ ______

8. Traffic flow ______ ______

9. Tax burden ______ ______

10. Quality of police and fire services ______ ______

11. Environmental factors ______ ______

12. Physical suitability of building ______ ______

13. Provision for future expansion ______ ______

14. Vendor delivery access ______ ______

15. Personal convenience ______ ______

16. Cost of operation ______ ______

17. Other factors including how big can you get without moving ______ ______

The greater the difference between the totals of the two columns, the clearer your decision should be. In the space below. write out what your decision and the reasons that support it.

Decision:

__________

Writing the Business Plan

Now that your research and plan development is nearing completion, it is time to move into action. If you are still in favor of going ahead, it is time to take several specific steps. The key one is to organize your dream scheme into a business plan.

What is it?

Is written by the home based business owner with outside help as needed

Is accurate and concise as a result of careful study

Explains how the business will function in the marketplace

Clearly depicts its operational characteristics

Details how it will be financed

Outlines how it will be managed

Is the management and financial "blueprint" for startup and profitable operation

Serves as a prospectus for potential investors and lenders

Why create it?

The process of putting the business plan together including the thought that you put in before writing it, forces you to take an objective, critical, unemotional look at your entire business proposal

The finished written plan is an operational tool which, when properly used, will help you manage your business and work toward its success

The completed business plan is a means for communicating your ideas to others and provides the basis for your financing your business

Who should write it?

The home based owner to the extent possible

Seek assistance in weak areas, such as:

accounting

insurance

capital requirements

operational forecasting

tax and legal requirements

When should a Business Plan be used?

To make crucial startup decisions

To reassure lenders or backers

To measure operational progress

To test planning assumptions

As a basis for adjusting forecasts

To anticipate ongoing capital and cash requirements

As the benchmark for good operational management

Proposed Outline For Home Based Business Plan

This outline is suggested for a small proprietorship or family business. Shape it to fit your unique needs.

Part I. - Business Organization

cover Page:

A. Business Name: __________

Street Address: __________

Mailing Address: __________

Telephone number: __________

Owner(s) Name(s): __________

Inside Pages:

B. Business Form: __________

(proprietorship, partnership, corporation)

Include copies of key subsidiary documents in an appendix. Remember even partnerships require written agreements of terms and conditions to avoid later conflicts, and to establish legal entities and equities. Corporations require charters, articles of incorporation and by-laws.

 

 

If you manage a factory, wholesale outlet, retail store, Service store, or are a contractor, you'll have to sell. However great
your product is, no matter what consumers think of it, you must sell to endure.

Direct selling approaches are through private sales efforts, Advertising and, for most businesses, display - including the
packaging and styling of this item itself - in windows, at the institution, or even both. Establishing a fantastic reputation with
the general public through anyhow and distinctive services is a direct process of selling. While the latter shouldn't be
disregarded, this short discussion will be confined to direct selling methods.

To establish Your Company on a business footing requires a Whole Lot Of aggressive personal selling. You might have established
competition to conquer. Or, if your idea is new with little or no competition, you've got the extra difficulty of convincing
people of the value of this new thought. Personal selling work is nearly always essential to accomplish this. If you aren't a good
salesperson, seek an employee or asociate who is.

Another way to create sales is by advertising. This may be achieved Through newspapers, shopping newspapers, the yellow pages
section of the phone directory, and other printed periodicals; radio and tv; handbills, and direct email. The media you select, in
addition to the message and kind of presentation, depends upon the specific customers you would like to reach. Plan and prepare
advertising with care or it'll be unsuccessful. Most media are going to be able to describe the characteristics of their viewers
(readers, listeners, etc.). Since your first planning described the characteristics of your potential customers, you need to match
these characteristics with the media audience. If you're selling expensive jewelry, then do not market in high school papers.
Should you fix bicycles, you probably should.

Advertising can be quite expensive. It is wise to place a limit upon An amount to spend, then remain within that limit. To help
you in deciding how much to spend, study the working ratios of similar businesses. Media advertising salespeople can allow you to
plan and even prepare ads for you. Make sure you tell them your budget limits.

A third Way of stimulating sales is effective displays both in Your place of company and outside it. If you've had no previous
expertise in screen work, you will want to examine the subject or turn the task over to somebody else. Observe screens of other
businesses and read books, trade magazines, as well as the literature supplied by equipment manufacturers. It may be smart to hire
a display expert for your opening display and special occasions, or you could get the help of one on a part time basis. Much
depends on your kind of business and what it takes.

The proper amount and types of marketing campaign to utilize vary from business to business and from owner to owner. Some
companies prosper with low-key sales efforts. Others, like the used-car lots, flourish on competitive, hoop-la promotions. In any
case, the importance of successful selling can't be over-emphasized.

On the other hand, don't Eliminate sight of your major goal - to Earn a profit. Anyone can generate a large sales volume selling
dollar bills for ninety bucks. But that will not last long. So keep control of your own costs, and price your product carefully.

Record Keeping. 1 essential element of company management is the keeping of adequate records. Study after study shows that many
supervisor failures could result from insufficient records or the owner's failure to make use of what information was accessible .
Without documents, the businessperson cannot see in advance that way the company is going. Up-to-date records may forecast
impending disaster, forewarning you to take action to prevent it. While extra work must maintain an adequate set of records,
you'll be more than repaid for the effort and cost.

If You Aren't prepared to keep adequate records - or have someone Keep them for you - you shouldn't try and operate a small
business. At a minimum, records are needed to substantiate:

1. Your returns under tax laws, such as income tax and social Security legislation;

2. Your request for credit from equipment manufacturers or even a loan From a bank;

3. Your claims about the company, in case you wish to market it.

But most important, you need them to run your business successfully And to raise your profits. Having an adequate. Yet simple,
bookkeeping system you can answer these questions as:

How much business I doing? What are my expenses? Which seem to be too high? What is my gross Profit margin? My net gain? How much
am I piling on my charge business? What is the condition of my working capital? How much cash do I have on hand? How much in the
bank? How much do I owe my Suppliers? What is my net worth? That is, What's the worth of my possession of The enterprise? What are
the trends in my Receipts, expenses, gains, and net value? Is my financial situation improving Or growing worse? How can my
resources compare with what I owe? What's the Percent of return on my investment? How many cents out of each dollar of Earnings
are net gain? Answer these and other questions by planning and studying balance sheets and profit-and-loss statements. To do this,
it's Important to record information regarding trades as they happen. Keep This information in a detailed and organized manner and
you will be able to answer the above questions. You will also possess the answers to such other vital questions About your company
as: What services or products do my customers enjoy best? Next best? Not at all? Do I take the product most often asked? Am I
Qualified to render the professional services that they demand most? How many of my charge Clients are slow payers? Shall I change
to cash only, or use a credit card Bill program?

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