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Serious
Home Based Business Opportunity
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Residual
income
Distributor has right to recruit new distributors. Distributor receives reward in accordance with the marketing Plan, which envisages receipt of fees based on performance of his Distributors' group.
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Start Home Based Business
You fill out the electronic form (registration as Distributor and as e-shopping User) and purchase "Starter kit Vision" (Indispensable professional tool for a proper practice and management of "Vision" activity in all its aspects, administrative, legal, informative. Starter Kit includes several sessions concerning company history, its organization and structure, products, events, charity activities, rules and procedures). You'll know how to use products, whom you can offer them, how to sponsor new
distributors.
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Serious Home Based Business Opportunity: You're The Boss.
A telling sign on a new businessowner's desk read: "Yesterday I didn't even know how to spell ENTREPRENEUR and now I are one!" Now that you have decided to open a home-based business, all decisions will be your responsibility, not just those you previously enjoyed because they involved your area of expertise. Of course, as a day-care operator you already knew how to soothe an upset child, but as the owner of that business, do you know when to file your taxes? As a consultant you have over 20 years' experience advising organizations on personnel matters, but do you know if it's to your advantage to incorporate? You are an expert at word processing, but do you know how to develop an efficient recordkeeping and billing system? You are the boss now and the good health of your business depends on your management skills.
Choosing Your Form Of Business Organization
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One of the most important decisions you will make is how to set up the business as a 1) sole proprietorship, 2) partnership, or 3) corporation. Remember, the small business owner risks it all, no matter what form of organization.
The forming of a business organization depends on the following factors:
* Legal restrictions * Need for capital * Liabilities assumed * Number of people associated in the venture * Kind of business or operation * Tax advantages or disadvantages * Intended division of earnings * Perpetuation of the business
Most home-based businesses are sole proprietorships or partnerships, but a comparison of the advantages and disadvantages of each type of organization follows:
A sole proprietorship is the least costly way of starting a business. You can form a sole proprietorship by finding a location and opening the door for business. There are the usual fees for registering your business name and for legal work in changing zoning restrictions and obtaining necessary licenses. Attorney's fees for starting your business will be less than for the other forms because less document preparation is required.
Sole Proprietorship Advantages Disadvantages * Easiest to get started * Unlimited liability * Greatest freedom of action * Death or illness endanger business * Maximum authority * Growth limited to personal energies * Income tax advantages in * Personal affairs easily very small firms mixed with business * Social Security advantage to owner
A partnership can be formed by simply making an oral agreement between two or more persons, but such informality is not recommended. Legal fees for drawing up a partnership agreement are higher than those for a sole proprietorship, but may be lower than incorporating. You would be wise, however, to consult an attorney to have a partnership agreement drawn up to help resolve future disputes.
Partnership Advantages Disadvantages * Two heads better than one * Death, withdrawal, or bankruptcy of one partner * Additional sources of endangers business venture capital * Better credit rating than * Difficult to get rid of bad corporation of similar size partner * Hazy line of authority
You can incorporate without an attorney, but you would be unwise to do so. You may think a small family corporation does not need an attorney, but an attorney can save members of a family corporation from hard feelings and family squabbles. Attorney's fees may run high if organization problems are complex. The corporate form is usually the most costly to organize.
Corporation Advantages Disadvantages * Limited liability for * Gives owner a false stockholders (while true sense of security for big business, may not be for small business) * Heavier taxes * Continuity * Power limited by Charter * Transfer of shares * Less freedom of activity * Easier to raise capital * Legal formalities * Possible to separate * Expensive to launch business functions into different corporations
Recordkeeping
Keeping accurate and up-to-date business records is, for many people, the most difficult and uninteresting aspect of operating a home-based business. If this area of business management is one that you anticipate will be hard for you, plan now how you will cope. Don't wait until tax time or until you are totally confused. Take a course at the local community college, ask a volunteer SCORE (Service Corps of Retired Executives) representative from the Small Business Administration to help you in the beginning, or hire an accountant to advise you on setting up and maintaining a recordkeeping system.
Your records will be used to prepare tax returns, make business decisions, and apply for loans. Set aside a special time each day to update your records. It will pay off in the long run with more deductions and fewer headaches.
If your business is small or related to an activity that is usually considered a hobby, it's even more important that you keep good records. The IRS may decide that what you are doing is only a hobby, and you won't be allowed to deduct expenses or losses from your home-produced income at tax time. So keep records of all transactions in which you spend or bring in money. Pick a name for your business and register it with local or state regulatory authorities. Call your city hall or county courthouse to find out how.
Your records should tell you these three facts:
* How much cash you owe, * How much cash you are due, and * How much cash you have on hand.
You should keep five basic journals:
1. Check register--Shows each check disbursed, the date of disbursement, number of the check, to whom it was made out (payee), the amount of money disbursed, and for what purpose.
2. Cash receipts--Shows the amount of money received, from whom, and for what.
3. Sales journal--Shows the business transaction, date, for whom it was performed, the amount of the invoice, and the sales tax, if applicable. It may be divided to indicate labor and goods.
4. Voucher register--A record of bills, money owed, the date of the bill, to whom it is owed, the amount, and the service.
5. General journal--A means of adjusting some entries in the other four journals.
Choosing a Recordkeeping System
Set up your records to reflect the amount and type of activity in your particular business. There are a wide range of pre-packaged recordkeeping systems. The SBA's pamphlet Small Business Bibliography No. 15 (see "For Further Information") lists many such systems. The most useful system for a small, home-based business is usually based on what is called the "One-Write System." It captures information at the time the transaction takes place. These One-Write Systems are efficient because they eliminate the need for recopying the data and are compatible with electronic data processing if you should decide to computerize.
Even though you may be small and just beginning, it is probably wise to consult an accountant to help you decide which recordkeeping system is best for your business. Once it is set up, you can record the daily transactions or periodically have a bookkeeper post your daily transactions in your General Ledger and prepare your financial statements.
Be sure to establish a separate bank account for your business--even before the first sale. Then you will have a complete and distinct record of your income and expenditures for tax purposes, and you won't have to remember which expenses were business and which were personal.
It is important to choose a recordkeeping system that you understand and will use. It will help you see how well the business is doing and is the first step in responsible financial management.
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