Construction and Contracting Business. Entrepreneur magazine
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records can result in overpayment of premiums.
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Know the ins and outs of your state! Some states exempt very small employers from carrying workers’ compensation; other states exempt owners who hold more than 25 percent of the stock of the company. Other states cap the amount of income of owners that is taxed. Learn the regulations in your state, and save yourself some money.
So here we are in Chapter 5, “It’s Moving Day,” the time to make the big step toward success. At this point, entrepreneurs should have a clear understanding of the basic foundation needed to start a business.
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State governments have a significant influence on businesses. Some states, as well as cities, are particularly friendly to small businesses. As of 2015, the five friendliest small business states were Texas, New Hampshire, Utah, Louisiana, and Colorado. The five friendliest small business cities of 2015 were Manchester, NH; Dallas, TX; Richmond, VA; Austin, TX; and Knoxville, TN.
One of the first questions startup business owners ask themselves is, “Where should I set up my operations, and how much space do I need?” Many start in their own homes, either in the basement, a spare room, or in the garage. There are certain advantages to starting this way but also many problems.
The positive aspects are largely related to costs. It’s cheap. The structure is already there so you have no initial costs to construct or rent a building. You may have some remodeling to do, but most often this can be done at a reasonable cost. There are no rental expenses to pay every month and no landlord to deal with. It’s also very convenient to have your office at your home; no time is wasted commuting. Property maintenance and utility costs can be shared by the homeowner (you) and your business. Finally, home improvement expenses such as a new roof can, in part, be treated as a business expense. Many people in all kinds of businesses have found ways to work from a home base.
Now for the downside: The Internal Revenue Service has very strict rules regarding in-home offices, so watch your deductions carefully. You can deduct only that portion of your home, and even your utilities, used for business.
Family support is a crucial factor in deciding to run your business from your home. Because you can never really get away from the office, it’s easy to spend too much time at work. Conversely, it is also easy to turn on the television set and get away from work. The key is to be disciplined and manage your time effectively.
There are other things to think about when considering a home office. It’s important to be able to have a normal home life as well as a stimulating and successful business environment. Ask yourself these questions before you open an office in your home: