Monday, 24 September 2012

Issues for your Home Based Business

Most small businesses start out as home-based businesses, with nearly one million people running their business from home. This lifestyle offers fantastic flexibility and convenience, however also comes with some compliance risks and obligations.

Before embarking on a home-based business, make sure you understand your compliance obligations, such as licensing requirements, business registration, taxation, employment, council approval and insurance.? Have you addressed all these issues for your home-based business?

Personal Licensing and Registration Requirements:

Certain professions ? such as financial services, legal services, accountancy and child care ? require specific qualifications, licensing and registration with government regulators. Before starting your business, make sure you do some detailed research and understand your personal registration and qualification requirements for your chosen profession.

Business Registration:

If you are operating your business using a name other than your own name, or in a structure other than as a sole practitioner, you may have obligations to register your business name, company or partnership.

The business.gov.au website is a great starting point for working out whether you have any registration requirements.

Taxation:

Starting a business can trigger all sorts of taxation considerations and requirements. You may need to register for a Tax File Number (TFN), Australian Business Number (ABN), register for Goods and Services Tax (GST), Pay As You Go withholding and Fringe Benefits Tax (FBT) ? just to name a few.

On a more positive note, your business may be eligible for some small business concessions. You may also be eligible for tax deductions for certain expenses incurred in the course of running your business.

Taxation is a complicated area and one which you should discuss with an experienced advisor before making any decisions.

Local Council Requirements:

When operating a home-based business, you must consider the impact of your business on the surrounding residential area.? Things like potential environmental pollution, noise disturbance, energy use, parking congestion, pedestrian access and public access to private property can all require specific approval from local council or other regulatory bodies.

You should also consider the local zoning of your area to ensure your proposed business is a permitted land use for your area.

Codes of Conduct:

Many industries have developed specific codes of practice and standards of conduct that may apply to your business. Your industry may also have mandatory codes of conduct that have been established in consultation with industry peers and the community.

Employment:

If you will be employing additional people to work for you in your home-based business, you do have legal and compliance obligations to fulfill as an employer.

These obligations can be complicated, ranging from requirements for hiring people, your obligations as an employer, your employee?s entitlements, development and training for your employees, how to handle complaints and disputes with employees and how you can end an employment arrangement.

For more detailed information on these topics, have a look at the business.gov.au?website.

Insurance:

Standard home insurance policies typically do not cover home-based business activities. You will most likely need to obtain additional insurance cover for your business, including consideration of:

  • public liability cover for clients/customers/suppliers who may visit your business at home;
  • insurance for any business equipment and stock;
  • workers? compensation for any employees working from your home;
  • professional indemnity insurance for yourself; and
  • income protection for yourself.

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Have you considered these issues for your home-based business? Let us know about any other issues that you have faced and lessons you can share.

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Image:?Stuart Miles / FreeDigitalPhotos.net

A former lawyer, Karen now helps small business owners tackle the mountain of admin that comes with starting, operating and growing a small business. Everything from design and website development, marketing and social media to business documentation - get in touch and see how easy running your business can be! When she?s not looking after your business, you?ll find her out and about pursuing her passion for photography, her family and food! Find out more at www.diysmallbusiness.com.au

Source: http://www.grassrootsinternetstrategy.com.au/home-based-businesses/

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