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Home Business Online

Legal questions about running a Home Business

A business from home offers entrepreneurs flexible hours, freedom to do what they want, and a great potential for income. That said it is not as easy as just deciding to open your business; you need advance planning to learn the legalities involved so you can avoid problems when you start to enjoy financial success.

A business plan is important. Planning ahead with an effective business plan gives a direction and a strategy to go where you want to go with your business. It should include information about whom you want to reach with the business and how you hope to accomplish what you want with your target clientele.

To overcome the complications of writing a business plan, if you have never done it before, you may want to get help from your local Chamber of Commerce or from the Small Business Association in your county.

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There are a number of business organizations that offer free help to newcomers, and if you can afford it you might want to hire a business consultant or coach to help you figure out how to get a solid start to your business.

Some legality deserves your serious consideration before you start a home business. There are zoning laws in most cities that prohibit you from conducting certain business activities in a residential area, and additional prohibitions may be contained in your rent or mortgage agreement. However, if your home business is contained and controlled on your laptop pc, a home business online, the restrictions may not apply. But for example, you may not be able to sell products directly out of your home (physically) instead of using drop-shipping strategies. And you may not be able to use a sound system to promote your business in the residential area. To be sure, check with City Hall to find out what limitations there are applied to what you do.

A business license is required for certain businesses, but it depends on the type of business you are planning to run. Keep in mind that an online home business is unlikely to require a license. Reselling goods made by others, or example, may require a resellers permit enabling you to buy goods at wholesale prices and charge sales tax when you sell them. To apply for business licenses you can contact City Hall, and ask someone knowledgeable about business law to help figure out which licenses you need.

Your taxes will no longer be taken out of a paycheck, when you run your own business you are responsible for your own taxes. The tax authorities must spell out the specific tax rules. For your own protection when the income gets substantial, you can establish a separate account for taxes to have enough available when taxes are due.

In spite of what is often published about a home business, it does require work, energy and money. Put some thought into your business plan before you begin, and you will save yourself a lot of problems later. At the minimum you need to make sure you understand the legalities of setting up your home business where you are residing so you can comply with all laws from day one.

Here is some advice we recommend and have found helpful:

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