Insurance

Insurance helps to safeguard your business against losses from fire, illness, and injury. You cannot operate without it. Talk with an insurance representative about your business needs. Check with the insurance carriers on your home policy and make sure business use of your home is compatible with your homeowner's policy. In addition to a homeowner's policy (personal plan), now that you have a business, you will need a commercial policy for full protection. Discuss these other possible needs with your agent:

* Product Liability Coverage--to protect you in case your product causes injury to the user

* Auto Liability and "Non-owned" Auto Liability Insurance--if a car is ever used to support the business in any way

* Medical Payments Insurance--payable if someone is injured in your home whether or not it was your fault

* Worker's Compensation--if you have employees

* Business Interruption Insurance or Earnings Insurance--in case your business is damaged by fire
or some other cause and you must totally or partially suspend operations
* Disability Income Protection--a form of health insurance in case you become disabled

* Business Life Insurance--to provide funds for transition if you die

Be sure to keep all your insurance records and policies in a safe place--either with your accountant or in a safe deposit box. If you keep them at home for convenience sake, then give your policy numbers and insurance company names to your accountant or lawyer or put it in your safe deposit box.

Final advice for the wise business person is to read and understand the fine print in all policies and to reevaluate business insurance needs about every six months.

Other Considerations

Another aspect of planning is sheltering tax dollars through a Keogh Plan or corporate pension and profit-sharing plans, if your business is incorporated, or a retirement plan.

If you have a partnership, consider making a Buy and Sell Agreement with your partner(s). This agreement requires the surviving partner(s) to buy, and the heirs to sell, the deceased partner's interest. The surviving partner(s) then becomes the sole owner(s) and the heirs receive cash for their share of the business.

Dealing With Laws: Zoning, Licensing, Permits, and Others

Unfortunately, many home-based business people try to "slide" into business, saying "I'll just try it for a few months and see how things go" or "It's not really a business. I have only ten clients." This attitude can lead to a lack of planning and big disappointments. If you set up your studio, print business cards and flyers announcing classes, and then find that regulations make it illegal to operate out of your home, you may have to start all over.

Zoning

Before you start your home-based business, do a thorough investigation of the zoning laws in your community. Zoning regulations spell out activities permitted and prohibited in specific portions of a city or county. Call your town hall, zoning office, or local library to get a copy of zoning laws. Find out the structure of your local zoning groups. Most areas have Planning, Zoning, and Appeals Boards.

If the home business you are planning conforms to zoning regulations, then all you need to do is keep abreast of new proposals that may affect your situation. It's a good idea to stay in touch with others operating from their homes by joining business organizations or neighborhood groups in case you ever need to band together to propose or oppose new regulations. Maintaining a low profile and friendly relations with your neighbors will result in more support from them should adverse regulations affecting your business ever be proposed.

If through your research you discover that the home business you are planning would violate the zoning code, there are several possible ways to proceed. You might wish to check with an attorney who specializes in zoning law to look for a legal way around the regulation. You might decide to apply to the Zoning Board for a variance or exception. Or you may be able to change your business enough to make the operation fit the law. If the regulation outlaws businesses that employ people other than the owner at home, maybe you can have employees take work to their own homes. If your business will create too much traffic, consider another strategy for product distribution. If your business will create too much noise, maybe you can soundproof your house. At last resort, ask yourself "Is it worth it to organize a drive to change the law?" Considering the rapid growth in the number of home-based businesses, you just might find other entrepreneurs who are also interested in submitting a change in the regulations to the Zoning Board. Go to meetings of the Board and try to identify the person who appears most active and most sympathetic to your position.

In the unfortunate and unlikely (most zoning officers don't have time to chase people who aren't bothering anybody) event that you are issued a "cease and desist" order, you should: 1) file an appeal immediately with the Appeals Board (if you interpret the regulations differently than they do); or 2) submit a change in the regulation to the Zoning Board to allow your business, which may enable you to continue to operate without fines until the Board reaches a decision. You may need a lawyer if you are not entirely familiar with the regulations and the workings of the Board.

Cultural and national trends point in the direction of zoning regulations that allow quiet, nonpolluting, low-traffic kinds of home businesses. More and more corporations are employing people to work at home. Most neighborhoods will adopt a "live and let live" attitude if you keep your premises neat and quiet and don't create traffic and parking problems.

Keeping Up With Zoning Legislation

There are two ways to keep up with zoning legislation in your community (and with other topics of interest to home-based entrepreneurs). One way is to read local newspapers, especially the business section and the local or "neighborhood" sections. Be sure you notice local items about such things as proposed subway stations or the county's plan for revitalization. Changes like these could eventually influence zoning in your area. The other way to keep abreast of trends and zoning issues is to join the local chapter of a business group, such as the Rotary Club, the National Association of Women Business Owners, the National Family Business Council, or a Business and Professional Women's Club. Through newsletters, meetings, and friendships that develop, you will hear all the latest local (and national) issues discussed while you learn valuable business skills and make useful contacts.

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

Direct selling approaches are through personal sales efforts, Advertising and, for most companies, display - including the styling
and packaging of this item itself - in kitchens, in the institution, or even both. Establishing a good reputation with the general
public through anyhow and special services is a direct method of selling. While the latter should never be disregarded, this short
discussion will be restricted to direct marketing methods.

To establish your business on a business footing requires a Whole Lot Of competitive personal selling. You may have established
competition to conquer. Or, if your idea is fresh with little or no competition, you have the extra problem of convincing people
of the value of the new idea. Private selling work is almost always essential to achieve this. If you are not a good salesperson,
seek a worker or asociate who is.

Another way to create sales is by advertising. This may be done Through newspapers, shopping newspapers, the yellow pages section
of the telephone directory, and other published periodicals; radio and television; handbills, and direct email. The media you
select, as well as the message and style of presentation, depends upon the specific customers you would like to reach. Plan and
prepare advertisements carefully, or it will be ineffective. Most media are going to be able to describe the features of their
viewers (readers, listeners, etc.). Since your initial planning described the characteristics of your potential clients, you need
to match these characteristics with the media audience. If you are selling expensive jewelry, don't advertise in high school
papers. Should you fix bicycles, you probably should.

Advertising can be quite costly. It is wise to put a limitation upon An amount to spend, then stay within that limitation. To
assist you in determining how much to spend, study the working ratios of similar companies. Media advertising salespeople can help
you plan and even prepare advertisements for you. Be sure to tell them your budget limits.

A third Way of sparking sales is successful displays both in Your place of company and outside it. If you have had no previous
experience in screen function, you are going to want to study the topic or turn the job over to somebody else. Observe displays of
different companies and read novels, trade magazines, and the literature supplied by equipment manufacturers. It may be wise to
hire a display expert on your opening display and special events, or you could obtain the help of one on a part time foundation.
Much is dependent on your type of business and what it takes.

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

On the other hand, do not lose sight of your major objective - to Earn a profit. Everyone can produce a large sales volume selling
dollar bills for ninety cents. But that won't last long. Keep control of your own costs, and price your merchandise carefully.

Record Keeping. 1 essential element of business management is the keeping of adequate records. Study after study indicates that
many supervisor failures could be attributed to insufficient records or the owner's failure to make use of what information was
available . Without records, the businessperson can't see in advance which way the business is going. Up-to-date records may
predict impending disaster, forewarning you to take action to prevent it. While additional work is required to maintain an
adequate set of documents, you'll be more than paid for the effort and cost.

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

1. Your yields under tax legislation, including income tax and social Security legislation;

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

3. Your claims about the business, should you would like to market it.

But most important, you want them to run Your Company successfully And to increase your profits. With an adequate. Yet easy,
accounting system you can answer such questions as:

How much company am I doing? What are my costs? Which appear to be too large? What's my gross Profit margin? My net gain? How much
am I collecting in my charge business? What's the state of my operating capital? How much cash do I have on hand? Just how much in
your bank? How much do I owe my Suppliers? What is my net worth? That is, what is the worth of my possession of The business? What
are the tendencies in my Receipts, expenses, gains, and net value? Is my financial situation improving Or growing worse? How do my
assets compare with what I owe? What is the Percent of return on my investment? How many cents out of every dollar of Earnings are
net profit? Answer these and other questions by preparing and studying balance sheets and profit-and-loss statements. To do this,
it is Important that you record information about trades as they occur. Keep This data in a detailed and organized fashion and you
will be able to answer the above questions. You will also possess the answers to these other vital questions About your business
as: What products or services do my clients like best? Next best? Not at all? Do I take the product most often requested? Am I
Qualified to render the professional services that they need most? Just how many of my charge Clients are slow payers? Shall I
switch to money only, or use a charge card Bill program?

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