An idea based on the interests, talents, contacts, expertise, and experiences of the individual of the basic skills to starts the business. The business can be product-based, service-based, or a combination of both. If you do not already know what type of business you are going to start, consider the following as guidelines:
Turn your current job skills into a business.
(Examples: writing, consulting, auto repair, teaching classes)
Turn something you enjoy doing, such as a hobby, into a business.
(Examples: sewing, gardening, childcare)
Start a business doing things other people hate to do.
(Examples: cleaning service, income tax service, and repair service)
Turn a talent into a business.
(Examples: teaching piano, singing, dancing, or exercising)
Turn technology into a business.
(Examples: word processing, computer programming, computer servicing)
Turn your kitchen into a business.
(Examples: catering, specialty foods, canning)
Turn your property into a business.
(Examples: herb farming, fee-fishing/hunting, organic gardening)
Use your vehicle to start a business.
(Examples: yard service, pick-up/delivery service, moving service)
Turn your knowledge into a business.
(Examples: teaching classes/workshops/seminars, planning events)
These suggestions offered are just to get your thinking started. The possibilities are limitless. For additional help on deciding what type of business to start, read the many books available.
Forms Of Business
When starting a home-based business, you must choose the best form of organization and ownership for you. The form of organization used depends on the type of business, how many owners or investors are involved, and how tax and liability issues will be handled.
Sole Proprietorship
The sole proprietorship form usually is advantageous to a new business because of its ease of organization. The business owner is responsible for all financing, management decisions, and liabilities of the business.
Merits
- The owner receives all profits.
- The owner is in direct control.
- It's the form with the least government regulation.
- This form offers ease of formation and a simple structure.
- There is no double taxation.
- Business losses can offset personal income (for tax purposes).
- There are low start-up (organizational) costs.
Demerits
- The business has limited financial resources (capital).
- There is a lack of continuity if the owner is disabled or dies.
- All profit is taxed as personal income.
- The business can expand only with after-tax dollars.
- The owner has total (unlimited) personal liability.
- The owner may have limited managerial expertise.
Most home-based businesses use the sole proprietorship form. It is simple, inexpensive, and requires less complex record keeping methods than the other forms of ownership.
