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In recent years there has been an increase of home based business with increase of fuel cost and the availability of employment via the internet. Unfortunately many fail in business due to a number of factors such as under capitalization, poor work habits and mismanagement of finances.
There is nothing wrong with chasing the American dream of owning your own business and being your own boss but one needs to put most of your efforts into the planning of your endeavor with realistic goals, facts and actual numbers. Cost of doing business is one of the single most important factors in planning any home based business.
Operating a business from home has a lot of advantages such as lower initial start up cost, less commuting depending on the type of business and allowing more time at home to attend to family matters if the need arises. Another big advantage of home based business is the tax write-offs you can add to the list which in turn will make you even more money by reducing cost of living in your household.
Understanding tax liability and allowable tax deductions is an area best left to your account as the tax laws are apt to change every year and if you have ever tried to read one of these publications you know they are not the most entertaining thing you will ever read nor are they written with the average person in mind.
Accounting is often overlooked when calculating cost of starting business. Most of the time absent thinking of the business idea itself, required license, legality of operating from home, advertising and supplies are necessary point to consider but do not get so caught up in spending and making money that you forget knowing where your money is . It can also get you in hot water with the government if you do not give them their share.
I'm not saying you need to go out and find the highest price accountant you can find. There are many computer programs you can purchase to help in keeping track of your money and tax liability. Also when you one of these programs it will save on the cost of your accountant due to the fact that they do not have to do as much work when filing your papers. You just simply down load your files and take them to your accountant which saves on data entry time and in business you know time is money.
As I stated earlier there are many programs available on the market, A couple of the more well known are Quickbooks and Peachtree but you should check with your accountant to see which will be most compatible with their software and in the long run save you time and money.
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