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Doing business out of your bedroom?

On Behalf of Latrobe Law Associates, LLC | Sep 14, 2017 | business formation & planning, Firm News |

You have probably heard that most new businesses fail. The number one reason – expenses exceeding income. The number two reason – choosing the wrong business format.

One way around that first predicament, if it makes sense for your business, is to work out of your home. Home businesses eliminate many of the expense problems of fledgling enterprises. You are already paying for space.

Home businesses work well for child care, consulting, online work, manufacturing (think scented candles) specialty sales (think eBay), writing marketing copy, interior design, jewelry, door-to-door sales and party planning.

They obviously work less well for heavy manufacturing, splitting atoms, coal mining and transoceanic shipping.

How to succeed

Experts say that the road to successful home business includes doing something you love, working 60 hour weeks, focusing on customer relationships, and doing something no one else is quite doing.

Many home businesses follow all these suggestions and still run into trouble – because of the number two reason above, choosing the wrong business format.

Just because you have a home-based business does not mean you have to be a sole proprietor. When you are a sole proprietor, you are on the hook for every problem your business runs into.

Protecting your home business

When customers fail to pay, you feel the loss in your pocketbook. Should a disgruntled customer choose to sue your company, they are suing you. With a sole proprietorship, there is no daylight between you and your business. Your personal assets are vulnerable if anything goes wrong.

The alternative format is a limited liability company. LLCs offer tax advantages, paperwork simplicity and – most important for your business – limited liability.

Call our lawyers and ask how being an LLC will arm your home business for the future.

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