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Flying Without a Net

Posted Sunday, December 26, 2004

One of the most exciting and daunting things about starting your own home-based business as your sole means of income is the reality that no one is responsible for your success or failure but you. The lure of the home-based business is undeniable. But before joining the revolution, take the time to think about the real implications of self-responsibility. In the past, you've always had the security of knowing that your employer was taking care of the background details ... you know, those little things like retirement plans, health insurance and capital investment. And making enough money to cover your salary and vacation time. Now it's all down to you.

So, let's take a look at four of the biggies: health and safety, insurance, tax issues and zoning.


No matter how much you've invested in setting up your business, nothing is more valuable to your business or to you as your good health and safety.

Apart from obvious measures such as ensuring you have adequate health insurance, keep the following basics in mind.

=> You Are Not A Machine

Take regular breaks. These are important for your physical and mental health, not to mention your productivity. Breaks can be particularly important if your livelihood requires you to spend hours on end in front of a computer. The last thing you or your business needs is for you to develop carpal tunnel syndrome!

Avoid the temptation to do household chores or errands on your break time. That's not a break. Do something that breaks the mental spell, something that gets you out of your work environment for fifteen minutes every couple of hours. Go wander around outside and take some deep breaths to cleanse your lungs. Lift weights. Call a friend. Go sit in the backyard with a cup of cocoa and enjoy the sunshine. It doesn't matter what you do, but make yourself do it. Set an alarm to remind yourself if you must.

=> Use the Correct Equipment the Right Way

Make sure you use the correct equipment for the task at hand. If your work requires long hours in front of a computer, make sure that your desk and chair are properly aligned and your work area is well lit. Ensure you maintain good posture.

=> Nap when sleepy

Many home-based business owners work odd hours. That, after all, is one of the advantages! But if you start working very early or work very late into the night, your sleep patterns need to adjust accordingly. Therefore, if you find yourself feeling sleepy mid-afternoon, take an hour's nap. Any longer though and you'll risk waking sluggish and tired. Set an alarm to wake you if think you'll go longer than an hour or 45 minutes. Don't tell yourself you can't afford the time to take a nap. A nap will do wonders for your productivity and you will be refreshed and ready to get back to work. You'll find you'll accomplish much more by the end of the day than you would have if you forced yourself to keep ploughing ahead even though you were so sleepy you couldn't think straight.

=> Home Alone Security

Security is an issue for any home-based worker. Apart from personal security which is always an issue for everyone wherever they work, the home-based office with its usual array of expensive computer and other office equipment, and heaven knows whatever else electronic gadgetry is a prime target for thieves. So take these basic precautions:

* Don't expose your expensive office equipment to the view of casual passersby. Obscure the view with foliage (but not so much that you provide a place for would-be intruders to hide) and draw the blinds when you're away from home.

* Keep your doors deadbolted when you're home as well as when you're away.

* Think twice about inviting new clients to your home office. Try and meet at the client's office wherever possible or, if not, at a neutral location.

* Ensure your property is well lit at night to deter intruders.

* Don't advertise the fact that you work from home.

* Consider using a post office box for your office address. This is particularly useful if you run an online business and are concerned about revealing your residential address to all and sundry.

* Get an alarm system installed and display the alarm company's sign prominently on your property.

* A dog can be a great security device, not to mention company for the solo worker!


Don't rely on your homeowner's insurance to cover your business. Most policies limit loss of business property to $2,500 and don't cover losses away from the home.

And you can just forget about claiming on your homeowner's policy for injury sustained by a client visiting your home office.

So ensure you obtain business insurance separate from your homeowner's policy or, if your insurance company offers it, an endorsement to your existing policies. This type of extension, where available, can be as low as an additional $200 or so annually.

The kinds of risks to consider, depending of course on the nature of your business, include:

=> Health and Disability

Check with any trade or professional associations of which you are a member for health insurance packages. Many such associations will have negotiated insurance packages for their members and this can be a good way of getting good cover for a cost-effective price.

Other types of insurance to consider are disability insurance in case you can't work due to illness or disability and workers' compensation (remember, you may be an employee of your business). Depending on your personal situation, you may also want to consider key man insurance which protects your business in the event of your death. The business becomes the beneficiary under this type of policy and this cover is intended to enable the business to replace you.

=> Property

This covers your physical assets - furniture and equipment, inventory and supplies including, where required, cover for equipment taken away from the premises such as laptop computers.

=> Liability

There are three main types of liability insurance. Depending on your business you may need only one or two or all three. The three types are (a) general liability which covers you for accidental injuries sustained by business visitors; (b) professional liability if you are a member of a professional occupation such as a lawyer or an accountant; and (c) product liability which protects you against damage caused to a third party as a result of a defective product.

=> Business Interruption

This type of insurance covers your lost profits as a result of some insured event which makes it impossible for you to carry on your business such as a fire or flood.


One expenditure you should definitely not try and avoid is an accountant to prepare your taxes. There are many home office tax deductions available but they are scrutinized carefully by the IRS so make sure you get professional help in this area.

The types of deductions available to the home business owner include a proportion of your housing costs and expenses if you use a part of your home exclusively for your business; use of your car for business purposes; health insurance; postage; trade magazines and other business-related publications; and capital equipment.

The best way to save money on accountant's fees is to keep accurate, organized and complete records. Keep your receipts organized so that when tax time comes you can hand everything over to your accountant in a nice neat package.

In addition, do not hestitate to contact your accountant for advice if and when you intend to take on employees. A whole slew of responsibilities goes along with employing others in your business including withholding tax and social security benefits and workers' compensation to name just a couple.


Finally, a word about zoning. Zoning laws can be inconsistent so just because your friend Dave can run a business out of his garage in town X doesn't mean you can do the same thing here in town Y. Some municipalities will give you a hard time if you're receiving clients on the premises but will turn a blind eye if you're not. Others focus on the detriment your business causes to the amenity of your neighbors. If your neighbors find they can't park their car in their own street because of the flood of traffic to your door, expect problems. Also, don't expect to be able to erect a sign in front of your house or, possibly, anywhere visible from the street, advertising your business. Still other municipalities will restrict the numbers of employees that can be employed in the home business. In these municipalities you often won't have a problem if you're a solo worker but once you start hiring employees to work on the premises you may have trouble.

So, before you start your business and invest a lot of capital in getting set up, check with your local authorities what, if any, zoning restrictions you need to be aware of.

These are just a few of the major headache areas when you cut the ties and set out on your own. By taking the time to get these things in order before you get underway, you'll create a safety net for yourself and your business so that when things go wrong, as they inevitably will, your dream of a home-based business of your own will continue to be a happy reality and not a nightmare.

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About the Author
Elena Fawkner is editor of A Home-Based Business Online ... practical business ideas, opportunities and solutions for the work-from-home entrepreneur. (


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