starting a small home-based business

CHARGE IT OR BORROW IT.

Okay, this may seem obvious but will you be able to pay your bills while you’re starting a small home-based business?

Some people think that as soon as they hang out their shingle -- on- or offline -- the world will beat a path to their door. Not so.

Most small business owners will tell you it takes at least a year to plant the seeds and let the world know you exist. You need to allow time to make connections and get established.

So while you’re waiting to make enough monthly income to cover your expenses – and convincing yourself that this home-based business thing is actually going to work – you’re going to need some way to survive financially.

For me it was unemployment income, a nice program here in Pennsylvania that allowed me to collect unemployment while also earning money from my startup business.

Or perhaps you have a supportive spouse who can pick up the slack while you’re getting started. Starting a small home-based business presents new challenges, financial and otherwise, to the relationship, so be sure you’re on the same page about everything with your partner. Discuss what he/she should expect during this time and be sure you have your partner’s support.

Or maybe you’re planning to support yourself with your credit cards for the time being. This is not a bad idea when you’re on your own financially. Just be sure you’ll be able to handle the monthly payments.

If you’re fortunate enough to have a cash reserve of about six months, you can always dip into that.

I haven’t met many entrepreneurs who have that kind of stash so don’t be discouraged when you read other articles that tell you to have a pot of savings set aside before you venture out on your own.

Entrepreneurial endeavors automatically assume a certain amount of risk. Without that element of risk-taking, it wouldn’t be entrepreneurial in the first place! (I like Brian Armstrong's blog and tone of voice on how to start your own business.)

Safe, secure and cautious is for people who are content to go to work 9 to 5 and come home to their television sets and weekends off before going back to their dreaded cubicles on Monday morning.

You are not one of those people. You are an at-home adventurer!

Finally, start getting used to making a business expense of just about everything from lunch appointments to gas for your car. These will count as deductions against your income when tax time rolls around.

Visit the IRS Q&A on home-based business deductions for more information.

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