Home Business Start-Up Basics

There are a few home business start up basics that you will need to accomplish. I am going to cover the most important, but keep in mind that you should double check with your local and/or state agencies to be sure you are compliant and have your ducks in a row. A simple internet search for your city's website can usually get you started in the right direction. You wouldn't want to take steps only to realize that your city does not have home businesses zoned where you live. I always recommend that you do your research and definitely get advice from a professional if you're unsure....BEFORE you start ;)

Decide on a Structure

Deciding on your business structure is the very first step, as it will impact everything else moving forward. Here are the options:

  • Sole Proprietorship
  • Partnership
  • Limited Liability Company (LLC)
  • Corporation

For most WAHMs a Sole Proprietorship is going to work fine and be a good starting point. It does not require a lot of know-how and can be set up pretty quickly. You can always change your business structure later as it grows and/or the need arises. So the next steps are going to revolve around that type of start-up. There are some instances where it would be wise to go with an LLC or Corporation, but that will be covered in a different article.

Nail Down a Business Name

This part can be fun, but also nerve wracking! It's definitely important, as it will be front and center of just about every aspect of your home business.

You will need to check and make sure that the name you want is not already Trademarked or otherwise in use. It's easy enough to do a search with the United States Patent and Trademark Office (USPTO).

You should also be considering if the name you choose also has a domain available. This is essential! You will need a web presence in just about any home business you choose. Even if you can't find the exact domain match there are some creative ways to pick out a similar domain name.

Once you've settled on your home business name you will need to register it via your state or county clerk. Since the legal name of a Sole Proprietorship is your actual first and last name, you will be filing your business name as a DBA (doing business as)...Sometimes called a Fictitious, or Trade Name.

States and counties can vary on this, so check with yours to see what steps are required. An easier alternative is to use a third party to do it for you like Simple Filings, though there will be some fees involved.

Licenses and Permits

Now that you have registered your business name you can get your appropriate licenses and/or permits. Generally, a business license and a re-seller's permit.

Most home based business licenses can be obtained through your city or town. You will have to fill out some paper work and pay a fee. Renewals of business licenses are due each year and are almost always based on the income of the business. The more you make, the more you pay.

Your re-seller's permit is usually free through your state's Board of Equalization. If you plan to buy merchandise or supplies wholesale and resell them you will need this type of permit. This is how you will account for applicable sales taxes and it is what wholesalers will require if you want to buy from them.

Again, different states and cities will vary, so check!

Choose Your Accounting System

Accounting can be a headache, especially if you're not a numbers person. You can hire an accountant or bookkeeper to do the work for you, but it can be costly for a new business. Luckily, there are some great programs available to help you through this step. They will save you time and keep your books, inventory, taxes, etc. in order. You will want to take a look at the features of each to decide which will work best for your particular business. Here are some of the most popular and reliable:

  • Quickbooks
  • Sage
  • NolaPro
  • Less Accounting

Set Up a Business Bank Account

Now that you have everything in place it's time to set up a business banking account. You will usually need to bring along your business license or some other proof of business to get set up at your local bank. This way all of your business transactions and accounting will be separate from your personal finances.

And those are the home business start-up basics.