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10 Tips: Is time right to become your own boss?

Is the time right to become your own boss?

Maybe you've thought about starting a business for years. Or maybe you're considering this route because of an impending job loss as the economy continues to falter. The following tips can help you decide if this option makes sense for you.

1. Devise a plan of attack. Before venturing too far, make sure a market exists for your product or service. Writing up a business plan can help you determine whether your idea is workable. The library has books about how to write business plans for free.

2. Could you fly solo? If companies in your career field frequently rely on independent contractors, perhaps you could become one of those independent contractors and work out of your home. If so, you could do business as a self-employed individual or a "sole proprietor" for tax purposes. For details, visit this IRS Web site: www.irs.gov/businesses/small/index.html.

3. Would you need employees? If your business idea would require you to hire employees, life will become more complicated. For information on applying for a business license, visit the Florida Department of Business and Professional Regulation's Web site at www.myflorida.com/dbpr/. For information on applying for a federal tax identification number and hiring workers, visit the same IRS site mentioned in tip 2 and click on "Businesses with Employees."

4. Pay estimated taxes quarterly. To avoid an unexpected doozy of a tax bill after you strike out on your own, file estimated tax payments by the deadlines established by the IRS. For information, visit www.irs.gov and search for "estimated taxes."

5. Save for retirement. Set aside at least some money for retirement each month. One easy way to do this is to open a simplified employee pension individual retirement account, or SEP IRA.

6. Think about your work space. When working from home, you ideally should have a separate space for your office. If an entire room isn't possible, create boundaries for a work area with partitions or drapes. You'll also need a computer, Internet access and a fax machine, which could double as a printer-copier-scanner.

7. Think about child care. If you have children, set rules about when they can enter your work area. Come up with a workable child care system, which may involve hiring a sitter.

8. Consider a separate phone line. A separate phone line may be important so your phone calls can be answered as professionally as possible, without children crying or dogs barking in the background. Also consider opting for a higher-quality voice-mail system.

9. Look like a pro. You'll want to have a professional-looking Web site. Also, your business cards and stationery should be on a par with what a large company would use. You can order these supplies quickly and economically at places like vistaprint.com or 123print.com.

10. Get enough insurance. You'll need health insurance for yourself and your family and liability insurance for your business. A good way to find relatively reasonable health coverage is through a business or trade organization in your field.

Laura T. Coffey (laura@tentips.org)

Sources: National Association for the Self-Employed (nase.org); "Bringing Home the Business: The 30 Truths Every Home Business Owner Must Know" by Kim T. Gordon

10 Tips: Is time right to become your own boss? 07/19/08 [Last modified: Wednesday, December 10, 2008 12:39pm]
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