Home Grown

Suggested Links

Kolquist notes, "In 17 years of practice, I've only needed to support a home-office deduction four times. And in each case my client and I brought in a marked-up floor plan and successfully proved our case." He adds, "Of course, keeping some photos in your files that can also back up your claim probably wouldn't be a bad idea."

The best of the Web

Here's a sad reality for any home-based entrepreneur hoping to use the Internet to save time and money on essential business matters: there is so much junk floating around in cyberspace relating to so-called HBOs (home-based offices) that Web surfers are much more likely to waste both time and money than to save them.

A case in point: The Web site of the American Association of Home-Based Businesses seems promising at first glance. The trouble is, the site consists mostly of a pitch to attract members at $30 a year for benefits -- such as membership in a discount-travel association and low-cost office products that are easily found elsewhere. The advice offered by the site is along the lines of "invest in a sturdy, four-drawer file cabinet" and "limit the number of papers in each manila file folder to 20." Hmmmm.

As a general rule of thumb, home-based-business owners will find high-caliber advice -- and good bottom-line payoffs -- from the best Web sites that serve larger businesses. After all, most issues relating to finances, marketing, raising capital, and the like are relevant to all growth-oriented companies.

Still, if you are searching for specific HBO advice, try visiting these three sites:

www.hoaa.com will bring entrepreneurs to a business organization that charges a $49 annual membership fee. But in this case membership brings a number of real advantages: low-cost health insurance, UPS discounts, hotel and car-rental savings, and -- an unusual but appealing benefit -- inexpensive rates for using a collection agency to pursue slow-paying customers. For those Web surfers who want to browse but not buy, the site also boasts a high-quality network of Internet links to legal, government, and other relevant sources.
www.iii.org is not devoted purely to the home-based-business community but is a good source of insurance information. Visit this site to learn the basics before you comparison shop for insurance policies or brokers.
www.homeprofessionals.com has plenty of strikes against it. Serious home-based entrepreneurs may be put off by the hokey products that the site markets, including some cutesy-poo coffee mugs and "homework" posters. But there's one good reason to check out this spot: its comprehensive list of books that address various challenges for home-based-business owners.

Start a business at home? You've got to be kidding

CEO: Ed Storey
COMPANY: Essex Builders Group Inc., Winter Park, Fla.
FOUNDED: 1991
ANNUAL REVENUES: $65 million

I'm not sure you want to ask me about running a home-based business. Mine only lasted for two weeks.

"That was in 1991, when my wife and I founded the company. Well, before opening the business I did spend a month arranging for the insurance and checking out the zoning rules and taking care of whatever other paperwork was necessary. I arranged for separate lines for my office phone and fax, and got a copier and the other supplies and equipment the business would need.

"We have a fairly big house. The idea of running the business from home seemed to make sense. We could clearly document our work activities, deduct legitimate business expenses, and control our costs. It would even be easier to work night and day, if we needed to do that.

"The thing is, it became clear to me very quickly that there were a lot of distractions in the house. At that time, I had two sons at home -- one in high school, one in middle school. On top of that, the phone was always ringing, what with solicitations and personal calls. We had a house cleaner once a week. There were always interruptions.

"But even more than that, there was a problem of image. When you need to meet with clients, saying that you're operating out of your house doesn't work. What I soon realized was, if you're in a service-oriented business, your credibility is the quality of your production and your image, but if your company is a start-up, all you've got is your image. And being based out of your home doesn't give you an image of business stability.

"It was time-consuming to change all the phone lines and insurance in order to make the move to a corporate suite, but it was the right move. The extra expense was not significant, and there were many benefits that outweighed it, including my company's proximity to other businesspeople. I have no doubt that we could not have grown the way we did during the past eight years if we had stayed at home."

For information related to this article, visit www.inc.com and search for " Never Too Small to Manage" and " How to Succeed in Business in 4 Easy Steps."