Home Business Start Up

Business Idea: What type of business should I start? Should I incorporate?

Quite often individuals considering a home based business are really stuck when it comes to finding the "right" home business. What do I really want to do? Sometimes the answer is right in front of you. It could be a hobby or pastime. Many first time home business owners start off with a hobby and turn it in to a business. But it doesn’t have to be anything you are currently doing either as a hobby or pastime. For example you may be a walking compendium of classic movies or baseball trivia or classical music. It really doesn’t make any difference what it is as long as it’s something you are passionate about or have considerable knowledge of.

You might be saying how can I create a business out of movie trivia or sports facts? It’s simple. In the case of movie trivia, for example, you could build a Wordpress blog and start blogging about movie facts and information. On the blog you could display Google AdSense ads. You may even find products that are relative to the movie industry such as books or DVDs from Amazon or other suppliers that you can become an affiliate for. It doesn’t matter what it is as long as you like doing it. The best part of starting this way is that you can be completely anonymous and do it in your part time keeping the day job.

If you are currently unemployed and this is your new source of income you will have other considerations to think about such as online or off-line home business, franchise or stand-alone, business type such as DBA, Sole Proprietor, LLC, Partnership, Corporation etc., these are big considerations, so lets talk about them.

DBA: This stands for "Doing Business As" it’s a fictitious yet highly legal and most often used business type. Your business name could be ABC Plumbing but your tax return would say Jim Johnson DBA ABC plumbing. You should read up on this to determine if this is the way you want to go. If you have an accountant ask him or her if this is the right structure for you. You can formerly register your DBA name by going to your town, county, city or state. If you aren’t sure you can have a company like Nolo.com do it for you. Pro/Con: Easy to operate in but you are personally liable for any damages. Your personal assets are not protected.

Sole Proprietor sometimes goes hand in hand with a DBA, if you aren’t incorporated, don’t have a partnership or corporation, you are acting as a Sole Proprietor. It just means that you are taxed as an individual. You may also want to have this "blessed" by your local government agency to make it formal. Pro/Con: Easy to operate in but you are personally liable for any damages. Your personal assets are not protected

A Partnership is very much like a Sole Proprietorship with the exception that there is more than one principal, Meaning that for tax purposes you share the load. Pro/Con: Easy to operate in but you are personally liable for any damages. Your personal assets are not protected.

LLC or Limited liability corporation is what it says. You get some of the benefits of a corporation but not all of them. You are much better off getting a full overview from a professional. Once again check this out with a reputable company like Nolo.com which has been in operation since 1971. They have been doing this online for a number of years and they are highly competent. You have some personal protection although not as much as a full corporation.

Corporation: Setting up a full corporation seems to be the most popular of business structures as opposed to all of the above. Your personal assets will be protected although there are always exceptions. Incorporating also requires some record keeping but in S Type Corporations this is minimal. Contact your professional or Nolo.com.

Deciding how to structure your business is an important step, however you may want just want to "test the waters,"before formalizing your home business. That’s okay too. Youy can easily start off in a number of directions similar to the Movie Facts Blog I spoke of earlier. This type of business start up is quite common and it’s a simple way to set up shop without spending a ton of money, which you most likely have very little of right now. Check out our other resources on this Beginner’s Guide: