Is Your Home Office and Business Protected?

Did you know that your renter’s or home owners insurance may not cover all aspects of your home-based business? According to Nolo, if your home burns down, and your insurance company didn’t know there was a home office, you may end up with a voided policy.  But insurance isn’t just about protecting your property. Its also about you and your staff’s health as well as protecting you from liability.

• Insurance needs you should check out include:
• Property coverage and loss of business
• Auto coverage
• Liability coverage for products as well as seeing clients in your home
• Disability insurance
• Health insurance for you and your staff

There are many options for finding coverage. Some companies now offer a joint home/home business coverage, which may be cheaper than adding riders to your existing policy. You’ll want to shop and compare to find the best business insurance quote and group health insurance rates. Fortunately, there are many options available.

You’ll also want to protect your business from your employees. It’s not unusual these days for employers to do background checks on their employees through companies like IIX. These companies can provide verification of social security numbers, driving history, and criminal background checks.

Don’t take a chance on your business’ financial future by not having adequate insurance coverage. Do the research and make sure you’ve got all your assets covered.

Save Money to Afford to Work-At-Home

One of the things that prevented me from working at home sooner was not recognizing that working at home cost less than working outside the home. Once I realized this, I also figured that the more I saved at home, the less I’d have to earn and the faster I could quit my job and be home.

I was recently introduced to Savings.com which says, “We have the best deals on all the things you want, making it easier than ever to search, find and share big savings from all your favorite brands and stores.”

But the site goes beyond the regular coupons for major retailers to include savings car rental coupons such as Enterprise Coupons to be used at Enterprise Car Rental that can include hotel rentals or upgrades. Other great discounts can be found for HP and Apple products, Old Navy and Gap, and Dick’s and Nike.

There are three reasons that I really like this site.

First, searching for savings is really easy. The main page will give you the deal of the day and staff picks, but if you’re searching for something specific you can search by store or brand as well.

Second, if you’re needing help on finding savings resources, it offers the ability to ask the experts. Not only will you get answers, but often coupons to go with it.

And third, is the blog which includes articles, tips and more about how to save.

And did I mention it’s FREE?

If you’re concerned about saving money and affording to work at home, check out Savings.com.



Brought to you by Savings.com.

WAHS Podcast #97: Afford to Work At Home with Kristen Hagopian

This week I interview Kristen Hagopian author of Brilliant Frugal Living.

If you’d like to download any episode you’ll notice a new “Download MP3″ below the player. You can get the podcasts through iTunes as well.
Listen here:

You can also subscribe through iTunes.

Resources Mentioned On the Show

Brilliant Frugal Living
Can You Afford Not to Work From Home?

Buying a Business Checklist – What you need to know before you buy!

Did you know that you can start a business today…right now? While building a business from scratch has its own advantages, buying a business is one of the fastest ways to start working from home. There are many advantages to buying a business including brand recognition, working systems, existing customers, available inventory, and support and training. Nevertheless, buying a business also comes with potential problems and issues such as costs, risks, and sometimes limited control such as when buying a franchise.

There are four different ways to buy a business:

1) Buy an existing business that was started from scratch by someone else.

2) Buy a franchise.

3) Buy business opportunity

4) Buy into a direct sales company

All offer a host of advantages and disadvantages, so before signing a contract and paying your money, do your research and get answers to the following questions.

Buying a Business Checklist

Below are a set of questions you should answer before buying a business whether its an existing business, franchise, biz op or direct sales. This is a generic checklist. You can get business type specific check lists such as Franchise Buying Checklist in The Work-At-Home Success Bible.

1. Who is the seller/company? Did he/she start the business and if not, who did?
2. How long has the business been in existence? How long has the seller owned it?
3. Why is it for sale?
4. What is the price? How was the price determined?
5. What does the price include?
6. Is there inventory? What is its value?
7. Are there any equipment or materials included in the sale?
8. Does the purchase include ownership or use of logos and the brand?
9. Is a customer database included? What is the size and purchase history?
10. Does intellectual property rights convey with the sale (trademarkes, patents, copyrights)?
11. Will the seller provide training and support?
12. What is the current financial state of the business? Debs? Assets? Accounts receivable?
13. Does the business/seller have contracts with specific ventors/contractors and will those relationships transfer to you?
14. Is the business required to operate under any laws, franchise or license rules, or other agreements?
15. What is the history and track record? What are the last two years of sales and returns?
16. What current marketing campaigns are running?
17. What is the reputation of the business?
18. What is the quality of customer service?

What is crucial to know is 1) what EXACTLY are you getting for your money. If you buy a business but the sale doesn’t include the brand or customer database, you actually aren’t buying very much. You also want to make sure you’re not buying a business that is on the verge of bankruptcy. Finally you want to know what laws or legal obligations the business is required to work under or uphold.

Five Reasons You Need to Start a Home Business

It used to be that going to work for forty years would provide you with enough income to support your family today and a nice pension to support your retirement tomorrow. Those days are gone. Financial gurus today are stressing the importance not relying on a job for your financial security. They are recommending that the best way to secure your family’s finances now and in the future is through a part-time home based business.

Here are five reasons you NEED to start a home business:

1)      Jobs are not secure or keeping up with the cost of living. More and more people are being laid off as work is outsourced to other countries or struggling industries are forced to cut back. Further, salaries have not kept pace with the cost of living which is making families poorer! Having a home-based business cannot only help fill this gap, but it can fund your retirement and even replace your income.

2)      Job related pensions and retirements are not secure and may not be enough to support you. Many companies are cutting back or eliminating their pension plans. Many don’t offer any sort of pension plan at all. With Social Security in financial trouble, you can’t expect to have the government or your boss secure your retirement. It’s up to you. A part-time home business can help you earn extra money that you can invest in your future.

3)      Tax benefits. Please note, I’m not a tax expert so you should always consult a tax professional on your taxes. However, as a home business owner you have many tax deductions available to you on expenses involved in running your business.

4)      Money savings. If you are able to bring your business home full-time, you can save huge on the costs related to working outside the home such as commuting, childcare, etc. In fact, many families are able to live better on less income by working from home.

5)      Improved well being. Stress, lack of sleep, no time for oneself much less a family are all the result of jobs that ask you to work more and more for less and less. The health implications for this kind of life are staggering with increased depression, heart disease, and more. Adding a side income from a home business can take the burden off of fears of losing a job because if you get laid off you have some income and savings to fall back on. But if you can replace your job with your business, you can set your hours, take time for yourself, spend more time with the family, and be able to take better care of you.

Deduct Hobby Expenses on Your Taxes

Disclaimer: I’m not a tax expert. This article is provided for general information. For more details visit the IRS online.

One of the perks of having a home business are the tax deductions. But if your hobby generates a little income, you may be eligible for deductions as well. The key is knowing the IRS’s definition of a business versus a hobby. If you do your hobby with the intention of making money, then its actually a business. However, if your hobby is simply a pleasurable activity that sometimes makes money, then it can be classified as a hobby.

When it comes to deductions, both businesses and hobbies can take them, but hobbies are limited in how much they can take. The IRS only allows deductions up to the amount the hobby earned. If you made $1,000 with your hobby and your expenses were $1,500, you can only deduct up to $1,000. Hobbies are not allowed to show a loss whereas a business can deduct all business-relates expenses even if it results in a loss (within reason).

To deduct your hobby expenses:

1. Make sure your project is indeed a hobby and not a business. Remember, if your focus is to make money then its a business.

2. Keep track of all your hobby related expenses such as the cost of materials. File all your receipts and statements to verify your expenses.

3. Keep records of your income.

4. Use Schedule A of your 1040 for file your deductions. (Businesses use Schedule C).

To learn more about hobby deductions, read the IRS’s Publication 535, the section on Not-For-Profit Activities.

How to Set-Up a Limited Liablity Company (LLC)

For a small solo-preneur business, operating as a sole proprietor is acceptable. It’s certainly easier since there is no paperwork and only requires a Schedule C for taxes. However, its also a riskier proposition. If sued, your personal assets (such as your house) are fair game.

In the 1970′s a new form of business structure called the Limited Liability Company (LLC) emerged that provided business owners with the protection and tax advantages not available to sole proprietorships, and yet are less complicated than corporations.

Because it is a legal entity, LLC’s should be set up by qualified professionals such as a lawyer or service that specializes in creating business entities. But it is possible to set up your own LLC.

Name your LLC making sure that the name is not in use or trademarked by another company. You can visit the US Patent and Trademark Office to do a name search. Contact your Secretary of State to see if the name is taken by another corporation, and check with your local area business office to find out if the name is being used in your area. You can use a non-trademarked name that is taken by another business if your business does not operate in the same area as the company already using the name. But you’re better off to choose something different and unique. Don’t forget to add LLC or limited liability company to your business name. To make it easier, you can use your given name. Unless your name is John Smith, odds are your name isn’t trademarked or in use by someone else.

Decide where to register your LLC business. Many people prefer to set up their LLC in Nevada or Delaware because they have liberal laws regarding corporations. If you go this route, you”l be setting up a foreign LLC (unless you live in Nevada or Delaware) and will need an address and an agent in that state. Most LLC services will provide this for you for a yearly fee. Or check with your state’s rules about setting up an LLC in your home state. You may find its just as easy and affordable.

File your Articles of Organization, which include the name of your company, its address and the purpose of the business. Some states may want a list of all the members of the business, as well as the registered agent of the company. In New York and Arizona you’ll need to put a notice in the local newspaper about your intention to form an LLC. You can find templates and forms online, in office stores or in books on LLCs. You may want to hire a lawyer to help you to make sure its done correctly.

Write and sign an operating agreement. The operating agreement gives the members’ interests in the business (percentage ownership), their rights and responsibilities and voting power, as well as how profits and losses are allocated, and how meetings are held. All of the business members should sign it. Some states may not require this, but it’s recommended to insure proper protection of the LLC.

Create a filing system to organize LLC documents and keep meeting notes, business changes and financial information. Even single person LLCs that don’t have meetings should keep accurate accounts of the money and business decisions.

Get needed business permits and licenses as required by your city or county. Also apply for an Employer Identification Number (EIN) which you’ll need for taxes. If you’re a single-person LLC you can operate under your Social Security number and file a Schedule C on your taxes, but then you’ll be missing out on some of the tax benefits that come with completely separating the business from you.

Open a business account at the bank. This should be in the LLC’s name and any money used from the account should be for business purposes only. Members can draw salaries from the LLC, but aren’t allowed to directly pay personal bills with LLC money.

Financing Your New Home-based Business

You have a great idea for a business, but like many things in life, starting a business requires money. While start-up costs vary, many successful entrepreneurs started with just a few hundred dollars. Your start-up costs will depend much on the business you are starting and what materials or supplies you will need. When starting a business, it is important to calculate your living expenses as well as business expenses. A new business can take several months to years before seeing a lifestyle sustaining profit. Anticipate this lean period in your budgeting for business start-up.

The following provides various ways to help fund your venture while still supporting yourself.

Moonlight: your business venture part-time during off-hours of your regular job. This lets you ease into all the tasks required to run a business with out the financial pressure. It does take away from your free time but, the sacrifice may be worth it in the long run when in 6 months to a year you have more time to spend with them than before.

Part-time: Consider working part-time and spending the other time building your business. This is a little riskier financially, but it allows you extra regular-day hours to work your business. Be sure to calculate all lost income as well as changes in benefits that often occur with part-time work.

Turn your employer into a client: By becoming an independent contractor, you are working for yourself, you have a client before you even start, and you have a ready made reference. There are many monetary benefits for your company to do this. Just be sure not to compete for your employer’s clients. That could work against you.

Live on one salary: If you are married and can afford it, live on one salary for a period of time. Because of the strain it can cause financially and emotionally, you want to have set goal in terms of a time frame to make a business profit.

Use savings: If you don’t have one, create one by putting away part of your job earnings in an account. If you have one, consider using it to start your venture. If you are successful, it will have been a great investment!

Misc. Money: Use money you receive unexpectedly (inheritance, lottery, gift, stocks, etc) to invest in your business.

Borrow from family or friends: This can be tough because not all family and friends are as encouraging or supportive as you will need to get your business rolling. On the other hand, they may be eager to help you reach your goal.

Credit: While the message of every financial planner is to cut up credit cards, it may be a way to help finance your business start-up. Remember, interest rates are high so, use them wisely.

Loan: There are business start-up loans, but they can be difficult to get. Get information on the variety of small business loans from the Small Business Administration. Consider taking out a home equity loan if you own your home instead.

Investors: If you have a great business idea other business people may be willing to invest in your business in exchange for partial ownership (usually stock). Seek professional assistance before recruiting venture capitalists.

Before spending any money on your new business, be sure you are clear on all the details of your business. Create a business plan that includes details on starting and running your business and the costs associated with it.

Can You Afford NOT To Work From Home?

There are two things I wish I’d understood when I first wanted to stay home with my children. One was how much it actually cost me and my family for me to work and, second, how little I really needed to earn to stay home! This page will help you figure out both!

CAN YOU AFFORD TO WORK?

Would you send your children to childcare for 45 hours per week so that you could work 40 hours per week to make a measly $3.80 per hour? Of course not, you say. But how do you know you aren’t doing just that? I certainly never thought as a professional social worker that I would be making only $3.80 per hour. But that is exactly what I was doing.

When I worked as a social worker, I made about $28,000 per year. Not a great salary but, combined with my husband’s, was a decent income. So why was I always broke? Why did we have a good income but couldn’t afford to go on vacation? Worse, I couldn’t afford to take the full 12 weeks allotted for maternity leave when my second child was born. The reason was that I had no clue how much I spent to work outside the home.

Here is what I paid each year so that I could work:

• $3,000 for Federal and State government income tax, Social Security payments and Medicare tax.
• $6,000 for childcare
• $2,400 extra for car payments, car insurance, and personal property tax for a newer car.
• $1,700 for commuting 10 miles a day.
• $1,000 for clothes, dry cleaning and other items and services related to my professional appearance.
• $1,000 for lunches.
• $2,600 for convenience foods and dining out because I was too tired to cook.
• $2,400 for I-deserve-this-because-I-work-so-hard items and guilt treats (toys, special outings) for my kids.

Total cost of my job: $20,100!
I spent $20,100 to work! That equaled an income of $7,900 per year, $152 per week… a full $3.80 per hour!

How much do you pay to work outside the home?

Work-related Expenses (listed below):

• Federal Taxes:
• State Taxes:
• Local Taxes:
• Social Security:
• Medicare Tax:
• Child Care:
• Commuting (toll, parking, 2nd car):
• Gasoline and mileage:
• Car insurance (extra car, nicer car):
• Clothing expenses (cleaning, new):
• Gifts, special friends etc at work:
• Convenience food for meals:
• Eating Out:
• Housekeeping help:
• Grooming needs (hair, nails etc):
• Guilt items for kids and family:
• Extra cost related to lack of time to research cheaper prices:
• Extra cost related to hiring help instead of making repairs yourself:

Add all the items above and subtract from your GROSS income. This is the amount left over after you pay for work expenses. Depending on the results, you may find it much cheaper not to work or to work part- time from home. For many years I made significantly less than I did at my last traditional job, and yet we had more disposable income. Why? Because I didn’t have so many work related expenses, and I was able to save a lot of money by being home.