| Are you one of the millions of disgruntled "9 - 5ers" | | | | incorporate. A corporation is a separate entity. It is not |
| who are sick of the rat race and truly want to figure | | | | you. It requires a real professional to fill out even the |
| out how to work for yourself? Have you been | | | | simplest of tax returns at year end. For most home |
| bombarded with advertisements chock full of promises | | | | based businesses, this is overkill. If you are really afraid |
| of wealth and freedom and now you want to taste | | | | that you might lose your house if you're sued, and you |
| the rewards just waiting for you? Or perhaps you've | | | | really believe this is the way to go, spend some |
| actually tried a few things in the past that didn't work | | | | money and have a serious discussion with a CPA or |
| out for you? | | | | tax attorney. |
| Don't give up! The fact that you're reading this right | | | | STEP 3 - Register your business |
| now proves you are still interested in learning how you | | | | Now you need to get permission from your state to |
| can realistically work for yourself, supplement your | | | | do business. This sounds more intimidating than it really |
| income, and maybe even quit the day job. | | | | is. You can do this all by yourself. You don't need to |
| However, if you don't have the obvious credentials - | | | | pay anyone to do this for you! Simply go to your |
| such as being a plumber or electrician, or even a | | | | state's business oriented website and search for |
| physical therapist, nurse, or accountant - there is still | | | | where it shows you how to file "Articles of |
| hope. With the proper planning, the right tools, some | | | | Organization for a Domestic Entity". You can usually |
| self assessment, and a sincere desire to succeed, you | | | | print this out with the instructions; it's about 4 pages |
| could well be on your way to "self employed" very | | | | long. Fill it out and send it in. This costs about $150 to |
| soon. | | | | file for the first time and another $50 + to renew each |
| STEP 1 - What will your business be? | | | | year after that. Most states allow you to do this online. |
| First and foremost, what is it that you want to do? Do | | | | STEP 4 - Get your EIN |
| you have a special skill or trade that can support you? | | | | You will probably need an EIN (Employer Identification |
| Most people fail to understand or recognize their | | | | Number). Even though you most likely aren't going to |
| marketable skills and they never give themselves the | | | | have employees, this shows the IRS you are a little |
| opportunity to learn how to capitalize on their | | | | more "business like". If you have a business where you |
| God-given talents. | | | | would need a business checking account, most banks |
| Whether you are looking for a way to be able to | | | | even require this in order to open the account for you. |
| afford to stay home with your kids, or you are out of | | | | You can apply for this online at the site. Look for form |
| work and want to fully explore all your options, these | | | | SS-4. |
| are just a smattering of ideas to base a business on - | | | | STEP 5 - File for a fictitious name |
| full or part time.o Babysitting / day care services. If you | | | | Depending on your state, you may be required to file a |
| have your own children to care for, invite other | | | | fictitious name if you are not using your own name to |
| mothers to leave theirs with you as well. It's the ideal | | | | conduct business. This costs about $50 in any state. |
| play date.o Cooking / catering. You don't need to be a | | | | STEP 6 - Tools of the trade |
| gourmet cook. Cakes, appetizers, or even side dishes | | | | No matter what your new business, there will be |
| could be your specialty.o Sewing. I'll bet you there isn't | | | | specific tools you will need at a minimum. Whether it's |
| one person in your neighborhood who wouldn't kill to | | | | a computer, a sewing machine, or even pots and pans, |
| have some hems taken up or a skirt let out.o Typing, | | | | make sure you get the best you can afford and make |
| bookkeeping services for small companies or even | | | | sure you know ahead of time what you will need at |
| sole proprietors (like you!).o Pick up / delivery / errands. | | | | the very least to conduct your business, and have |
| Have you ever wished you had a personal shopper to | | | | them in place. |
| get the cleaning, pick up the kids, get to the drug store, | | | | STEP 7 - Profit and Loss |
| or just get milk and diapers? So does everyone else!o | | | | Know your cash flow! Set up at least a simple Excel |
| Crafts. Can you arrange flowers? Make gift baskets? | | | | spreadsheet to list your expenses and your income. |
| Knit? Design picture frames?o Organize storage | | | | Your success depends on how much money you're |
| space. This is a new in demand skill. Many would pay | | | | clearing (your profit). You don't want to find out the |
| top dollar for someone to find room for the car in the | | | | hard way that you aren't even breaking even. |
| garage, or to have someone organize closets and junk | | | | STEP 8 - Paying taxes |
| drawers. | | | | You'll need to pay at least self employment taxes. |
| STEP 2 - Choose a business entity | | | | Don't wait until the end of the year to find out you owe |
| Now that you know what you will be doing in your | | | | thousands of dollars on what you made! Put away at |
| business, you need to decide what type of business | | | | least 25% of your income into an interest bearing |
| entity you will have. In very simplified terms, here are | | | | account so you will be able to pay these taxes when |
| the major choices:o Sole Proprietor. This is the most | | | | the time comes. |
| common for people who find a way to earn money at | | | | STEP 9 - Advertise |
| home. You don't need to find an alternate name for | | | | Get the word out! Print some business cards, hand out |
| the business; when you file your taxes at year end | | | | flyers, email everyone you know, have your spouse |
| your Schedule C simply has your real name as the | | | | bring in some brochures to his or her workplace. Place |
| name under which you do business. Your income | | | | free ads online at Craigslist. Ask people for referrals. |
| flows through your regular tax return. You may very | | | | STEP 10 - Stay focused and organized |
| well qualify for a refund, too.o LLC (Limited Liability | | | | No matter what kind of business you have, you'll need |
| Corporation). You can be a sole proprietor - the only | | | | a way to keep track of what's what. This could be as |
| person in your business - and have an LLC. The | | | | simple as a notebook you carry with you or as |
| difference here is that your liability (if you get sued) is | | | | intricate as a Blackberry. Remember commitments |
| significantly reduced over that of a sole proprietorship. | | | | and appointments, track quotes and proposals, follow |
| You are required to have a specific business name. | | | | up with prospects, and ask clients for add on business. |
| Your income flows through your regular tax return. | | | | Everything you need to know should take no more |
| You may very well qualify for a refund, too. Depending | | | | than 30 seconds to find! |
| on the type of business you have, this may be a good | | | | If you can accomplish all 10 steps above, you're well on |
| option.o Corporation. Should you incorporate? Probably | | | | your way to being successful. Developing a secure |
| not. There's very little benefit and there is one big | | | | foundation is over half the battle. |
| drawback: you don't get a tax refund if you | | | | |