Monday, January 26, 2009

Home Business

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Starting a business right in your own home can be most rewarding both financially and in terms of life-style.The fastest-growing kinds of this enterprises are computer data and word processing, direct sales for communications, and business services in general, including accounting, bookkeeping and typing.

If you want to start a business from your own home, first make sure you are allowed to do so.
Zoning laws in many localities forbid it, as do some apartment leases and condominium bylaws.
If you are in conflict with the rules,you can appeal for a permit or variance. Also make sure that
you are operating within federal and state laws. Some laws,which were originally designed to prevent sweatshops, regulate what goods can be produced commercially at home.

Be certain to hire a lawyer who has worked with other home businesses. He or she can shepherd
you through the several layers of bureaucratic formality that attend the birth of any business.
You also have to decide what legal form your business should take. Most small businesses start
as proprietorships. They require little expense or government approval to set up.

One big advantage of a proprietorship is that both you and your business are taxed as individuals. Thus,if you have a full-time job and a part-time business that loses money,you usually can write offyour losses against other income.

Be carefull,though:
tax reform stipulates that you must "materially participate" in a business in order to offset income from your full-time job.A major disadvantage of a proprietorship is that in case of a lawsuit,your personal liability is unlimited. That is just one reason why you should be sure to get adequate insurance. A regular homeowners or renters policy probably is not enough. You doubtlessly will need extra personal
liability coverage.

The biggest potential tax advantage of your home enterprise is that you are entitled to deduct
not only for regular business expenses but also for a host of household expenses that you can
prove are directly related to your work. Such deductions are limited to the annual gross income
in the business in 1986. Effective in 1987,the limit drops to the annual net income from the business.

Putting your husband or wife on the payroll of your home business can be a tax saver,but you
will need to follow some rules laid down by the IRS. By employing spouse who has not previously been working for pay, many couples can increase their combined maximum annual contributions to their tax-saving Individual Retirement Accounts from $2,250 to $4,000.

Your business can also deduct your spouse's salary,as well as any amounts it pays in for his or her pension or profit-sharing plans, worker's compensation, life insurance or health policies. Employing your husband or wife will not trigger a tax audit.But the IRS will not permit the extra deductions if it believes you hired your wife or husband solely for tax reasons.

If you are audited,you might be asked to proved that your spouse was hired for a legitimate
business purpose. The more evidence you have that he or she is considered just another employee, the better. Many tax advisers recommend writing a job contract. It should cover your wife's or husband's duties, pay, benefits and the expected length of employment. Keeping a time sheet of his or her work hours and a description of the work will be useful as well.

Be certain that you are paying your spouse a reasonable salary. As evidence,clip newspaper
advertisements for similar jobs. Or call a local employment agency and ask for the going wage.
Try to get a letter from the agency documenting the quoted salary range, or at least keep
legible notes on the conversation.

Friday, January 23, 2009

Starting your own business

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Can we say that America is a nation of small business? yes. About million of them. Many of them are extremely prosperous, and so are their owners. More millionaires come out of a small business than big corporation. Of course, not every entrepreneur does so well. About 80% of all businesses fail within two years, usually because their owners do not start out with enough capital or with a sound plan.

When starting your own business, the first two or three years are the critical period . To survive them, you will need to anticipate the problems that accompany each stage of the business. You can avoid or conquer difficulty with sound planing, ample capital, solid management skills and, of course, a well-conceived idea.

When you get that idea, it may seem so stunning to you, so can't miss, that your first impulse will be to quit your job, remortgage the house and kiss your spouse and kids good-bye kiss while you devote yourself to your brainstorm. But do not do anything of that kind. Instead, you should evaluate your drive, dedication and experience in estimating whether you can turn a pipe dream into a money-maker. Experience is the key.

Solid planning is essential. you will need to draft a business plan itemizing the costs of developing your product or services, and projecting your company's share of market and sales over the next three to five years. this road map should be about 60 to 80 pages long and quarterly and include weekly or monthly projections for the first two years and quarterly figures after that. Do the figuring yourself to become familiar with productions, distribution, and marketing.

You also can get help from a business incubator. That is a support center which provides pledgling entrepreneurs with inexpensive space and services, such as copy equipment and secretarial help. These centers are often housed in old, renovated buildings and charge rents that are only a fraction of what businesses would have to pay elsewhere. Because overhead is low, the business owners can devote more money to making their ventures succeed and grow. And most incubators businesses do succeed; some get so big that they eventually have to move out.

You may be considering starting a new business all by yourself, but it pays to remember that teams have better odds for success than individuals do. The right combination brings more management skills and more money than you alone can.

Of course, money is supremely important when you start your own business. Under capitalization pits you against the clock in a losing race. To figure out how much capital you are going to need , hire an accountant-preferably one with experience in your industry. He can help show you how much money you would need.

If your small business then can survive two to three years of growing pains, the odds for continuing success will be in your favor.

articles to read:

I-O Psychology
Industrial-Organizational Psychology, application of various psychological techniques to the workplace and other organizations. Psychologists in this field advise businesses and organizations on a variety of subjects:

read the story..

related articles:
Industrial Management


Monday, January 19, 2009

Money-making Idea (raising capital)

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What you need most to get a new business off the ground is a talent for raising capital. Even if your idea is brilliant, no backer will give you a dime until you have sunk in most of your own savings.

So, the smart entrepreneur start with as much of his own capital as possible, using all his sources of credit. If necessary, he will remortgage his house. By maximizing his own stake in the business, he will impress other potential investors with his commitment. He also will retain tighter control of his enterprise.

When entrepreneurs need outside money, begin by soliciting friends and relatives-and then go on to friends of friends and relatives. Close relatives usually are more willing than distant investors to wait for the profits to start rolling in.

Try to get his or her money as a loan rather than as an investment in return for a piece of your company. After you have approached friends and family, the best way to get names of potential investors you don't know is to ask accountant, bankers, lawyers, brokers and other business owners. They often know who has money to invest or lend. Local business groups like the chamber of commerce can provide more leads.

Once you have exhausted your individual financing sources, it is time to approach the institution. If you need less than hundred thousand, the best sources are the bank, savings and loan, commercial finance companies, the small Business administration and business development companies.

When you have to go to those outside capitalist and bankers for money, you may be rather pleasantly surprised. Though real interest rates are high, money to finance promising new businesses is fairly plentiful. Banks are making loans to small business again. Professional venture capitalists are loaded with cash, and they even complain they cannot find enough worthy enterprises to assist.

If you need help putting together your plan to start a small business, ask an accountant. Expect to pay your professional adviser. He may be able to show you how to use potential customers and suppliers as sources of financing and how to cut cost by leasing, rather than buying , equipment. So hiring a professional probably will be a sensible investment.

To increase your chances of raising money, start with the right source. If you want a bank loan (info), for example, call ahead to inquire whether the bank does the kind of lending you need. then find out what your potential backers want-and deliver it. Ask a banker what it will take for him or her to lend you money. If you meet his or her standards, it will be hard for him to say no. Finally, if you are rejected, find out why.

The way you can approach your next source with a better pitch.

Sunday, January 18, 2009

The Art of Getting Rich

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The quickest path to wealth will continue to be owning your own business. new opportunities will arise as the economy shifts away from the huge industrial companies to small and medium-size enterprises. Both the economic climate and social attitudes have warmed to entrepreneurs in recent years. You do not have to invent a marvelous new machine or master some obscure technology. All you have to do is devise a more efficient and profitable way of performing an old job.

Studies of entrepreneurs have shown that those who succeed share certain traits. They are able to take calculated risks and learn from their mistakes. Many of them stumbled along the way but then quickly picked themselves up, analyzed their errors and were smarter for having made them. They develop detailed business plans. They are persistent and patient. Often they begin with little money but considerable determination. They are also willing to devote themselves totally to the business.