The number of individuals working from home is rising: some might have a completely independent set up whereas others are interested in a way to make additional money in conjunction with their daily job.
A home-based business can be understood as:
The foundation for a company e.g. a tradesperson working from their home base and onsite at the client’s premises, the place of business e.g. a hairdresser working in their own home, a consultant, business coach or contractor using a home workplace, frequently visiting clients, or the foundation for an Internet business.
There are a number of things you will need to know to in running a business from home.
Registrations and licenses
When working from home some companies require special registrations or licenses, in addition to a council planning permit. In order to accurately identify what is most appropriate for your home business contact your local council for more information on planning licenses and other local permits and requirements.
Insuring a home-based Small Business
A frequent misunderstanding among home businesses is that because they are working out of home, they think they are adequately covered by a domestic Home and Contents insurance cover which may not always be the case.
There are two types of deductible expenditures, running and occupancy expenses. The Australian Tax Office (ATO) allows you to claim these two forms of expenses normally associated with running your house. Should you put aside a particular work area then you can claim both. If you haven’t put aside an area just for the company, then you can only claim running expenses.
Home-based business running costs include power, printer consumables, cleaning and telephone expenses. Home-based business occupancy expenses include mortgage interest, council rates, rent and insurance premiums. Additionally, the expense of travel for business functions is usually deductible, which means you may have the ability to claim the expense of trips between your house and other places if the travel is business associated.
Take note that if you use part of the house for a company, you might need to pay capital gains tax if you sell the house, even when you did not claim any deductions for mortgage interest or occupancy costs when you conducted the business.
Contact information for your home business
You will have to give contact information to your customers and suppliers, and on receipts and invoices. If you do not have customers and clients visiting then you might choose to avoid supplying your home address. Establish a post office box or locked bag with Australia Post or alternatively, get a street number address if you would like to avoid supplying a PO Box as your address.
This choice can simply supply a street address and replying service, but could also provide printing, copying and courier services as well as boardroom and meeting room hire for things like small business coach training. There are lots of business centres offering virtual office facilities across Victoria.
You might require an extra telephone line for business calls. Another telephone line helps keep business costs separate for reporting and taxes. An answering service may help provide a professional appearance if you are busy with a client, or on the road and unable to answer your mobile phone.
Use your Community council
Council websites frequently have information about business activity within their area and support for home-based companies. This can be a fantastic way to work out who’s your competition and plan how you are going to market your services or products.