How to Set-up and Operate a Home-Based Business

by Tiffany C. Wright
Toca Family Business Services

Do you have a business idea or concept and wish to make it into a viable home-based business? Do you already have a business with a separate office but are now considering whether or not to operate that business from home to save money or improve your quality of life? Are you uncertain what is involved in setting up a home-based business? Do you live in Gwinnett County, Georgia? If you answered yes to any of the first three questions, read on to find the steps necessary to get you set up and operating your business from your house or apartment. Most of the actions below apply to any home-based business but the examples are specific to Gwinnett County, Georgia.

Register your business with the Secretary of State.
Unless you intend to operate your business as a partnership or sole proprietorship and use your social security number for the business, you must first register your business with the (Georgia) Secretary of State. You can operate a sole proprietorship or partnership without registering, but you leave yourself open to liability and a host of other issues when you do not operate your business as a completely separate entity. You can register as a limited liability company (LLC) or as a corporation. On the Secretary of State site, search existing names to make sure the name you want is not already taken. Then complete the online registration process for either an LLC or corporation and remit payment. You should hear back in a few days. If there is a problem with the registration, you will receive a letter in the mail telling you what steps you need to take to correct the problem. Otherwise, for a corporation you will receive your Certificate of Incorporation or, for an LLC, you will receive a Certificate of Organization.

Obtain an Employer Identification Number (EIN) from the IRS.
Go to IRS website and click on the EIN link on the left. Follow the directions for obtaining an Employee Identification Number (EIN), also known as a tax id. The IRS will provide you with a temporary EIN as soon as you complete and submit the online form. The IRS will send the permanent EIN confirmation in the mail. In almost all cases, the permanent EIN equals the temporary EIN. You can use the temporary EIN to register the business with our city or county.

Obtain a business license.
In order to operate your business in Gwinnett County or most other jurisdictions, you must be licensed. The initial licensing is more of a registration. Some jurisdictions allow you to complete the entire process online. Others, such as Gwinnett, require that you download and complete the form.

Download the business license application form, Gwinnett County Initial Business /Occupation Tax Application, from the Gwinnett County website. Alternatively, you can call or visit the Licensing & Revenue office located in Lawrenceville, Georgia. In Gwinnett, as the home-based business’ owner, your home address MUST match the address on your Georgia drivers license or identification card. To confirm this, you MUST include a copy of your drivers license or id card with your application. Complete and sign the application. You can either mail the form or submit it in person. If you submit the application in person, you will be told how much you owe at the time of submission. If you submit by mail, you will be billed. Once you pay, you will be issued a Business/Occupation Tax Certificate. This is your license.

Check the zoning laws in your neighborhood.
Gwinnett County generally allows you to operate a non-disruptive business out of your home including a small beauty or barber shop, daycare center, and similar entities which do result in traffic in and out of your home. If you have an internet-based business or always meet your customers at Starbucks, do not worry about zoning. If you do have large numbers of vendors or customers or a number of employees who work out of your home, make sure that the traffic flow and activity do not disturb your neighbors. Otherwise you may run afoul of the zoning laws. If it becomes a nuisance to your neighbors, you will need to meet your customers and vendors off-site or rent office space elsewhere. If you are concerned about receiving numerous or large packages, you can rent space at a UPS Store or PakMail or similar mail facility that uses suite numbers instead of P.O. boxes. (FedEx and UPS do NOT deliver to P.O. boxes.)

Obtain liability insurance.
If you have employees, customers, and/or vendors come to your home, make sure you and your business have sufficient business premise liability insurance coverage to cover any accidents or incidents. At the very least, purchase an personal umbrella policy to protect your home from slip and fall and other accidents on your property by people visiting you for business purposes.

If you have a limited liability company or corporation, renew your company registration with the (Georgia) Secretary of State annually. You can do so online. Make sure that you file for your business license annually and remit any tax payments according to your business earnings. Notify Gwinnett County if you move. If your business grows, ensure you are still compliant with the zoning laws in your area. If not, seek out options like those identified above.

About the Author: Tiffany C. Wright, The Resourceful CEO, provides short-term and project-based interim CEO and CFO services and strategic & financial advisory through her firm, Toca Family Business Services. She is a small business advocate and an author. She is the author of Solving the Capital Equation: Financing Solutions for Small Businesses, available on Amazon. She is also the former owner of a commercial construction newspaper and real estate investment company. In the past five years she has helped companies obtain over $31 Million in financing and strategically re-align their operations and financial structure. She has an MBA from the Wharton School of Business, Univ. of Pennsylvania and a BS in engineering from The Ohio State University. You can view or subscribe to her blog at http://www.Cash4Impact.com.

Article submitted Tuesday, May 24, 2011 & read 19 times.

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