LEGALITIES & TAX ADVANTAGES IN A HOME BUSINESS

Every year, several thousand people develop an interest in "going
into business." Many of these people have an idea, a product or a
service they hope to promote into an income producing business
which they can operate from their homes.

If you are one of these people, here are some practical thoughts
to consider before hanging out the "Open for Business" sign.

In areas zoned "Residential Only," your proposed business could
be illegal. In many areas, zoning restrictions rule out home
businesses involving the coming and going of many customers,
clients or employees. Many businesses that sell or even store
anything for sale on the premises also fall into this category.

Be sure to check with your local zoning office to see how the
ordinances in your particular area may affect your business
plans. You may need a special permit to operate your business
from your home; and you may find that making small changes in
your plan will put you into the position of meeting zoning
standards.

Many communities grant home occupation permits for businesses
involve typing, sewing, and teaching, but turn thumbs down on
requests from photographers, interior decorators and home
improvement businesses to be run from the home. And often, even
if you are permitted to use your home for a given business, there
will be restrictions that you may need to take into
consideration. By all means, work with your zoning people, and
save yourself time, trouble and dollars.

One of the requirements imposed might be off street parking for
your customers or patrons. And, signs are generally forbidden in
residential districts. If you teach, there is almost always a
limit on the number of students you may have at any one time.

Obtaining zoning approval for your business, then, could be as
simple as filling out an application, or it could involve a
public hearing. The important points the zoning officials will
consider will center around how your business will affect the
neighborhood. Will it increase the traffic noticeably on your
street? Will there be a substantial increase in noise? And how
will your neighbors feel about this business alongside their
homes?

To repeat, check into the zoning restrictions, and then check
again to determine if you will need a city license. If you're
selling something, you may need a vendor's license, and be
required to collect sales taxes on your transactions. The sale
tax requirement would result in the need for careful record
keeping.

Licensing can be an involved process, and depending upon the type
of business, it could even involve the inspection of your home to
determine if it meets with local health and building and fire
codes. Should this be the case, you will need to bring your
facilities up to the local standards. Usually this will involve
some simple repairs or adjustments that you can either do
personally, or hire out to a handyman at a nominal cost.

Still more items to consider: Will your homeowner's insurance
cover the property and liability in your new business? This must
definitely be resolved, so be sure to talk it over with your
insurance agent.

Tax deductions, which were once one of the beauties of engaging
in a home business, are not what they once were. To be eligible
for business related deductions today, you must use that part of
your home claimed EXCLUSIVELY AND REGULARLY as either the
principal location of your business, or place reserved to meet
patients, clients or customers.

An interesting case in point: if you use your den or a spare
bedroom as the principal place of business, working there from
8:00 to 5:00 every day, but permit your children to watch TV in
that room during evening hours, the IRS dictates that you cannot
claim a deduction for that room as your office or place of
business.

There are, however, a couple of exceptions to the "exclusive use"
rule. One is the storage on inventory in your home, where your
home is the location of your trade or business, and your trade or
business is the selling of products at retail or wholesale.
According to the IRS, such storage space must be used on a
REGULAR Basis, and be separately identifiable space.

Another exception applies to daycare services that are provided
for children, the elderly, or physically or mentally handicapped.
This exception applies only if the owner of the facility complies
with the state laws for licensing.

To be eligible for business deductions, your business must be an
activity undertaken with the intent of making profit. It's
presumed you meet this requirement if your business makes a
profit in any two years of a five-year period.

Once you are this far along, you can deduct business expenses
such as supplies, subscriptions to professional journals, and an
allowance for the business use of your car or truck. You can also
claim deductions for home related business expenses such as
utilities, and in some cases, even a new paint job for your home.


The IRS is going to treat the part of your home you use for
business as though it were a separate piece of property. This
means that you'll have to keep good records and take care not to
mix business and personal matters. No specific method of record
keeping is required, but your records must clearly justify and
deductions you claim.

You can begin by calculating what percentage of the house is used
for business, Either by number of rooms or by area in square
footage. Thus, if you use one of the five rooms for your
business, the business portion is 20 percent. If you run your
business out of a room that's 10 by 12 feet, and the total area
of your home is 1,200 square feet, the business space factor is
10 percent.

An extra computation is required if your business is a home day
care center. This is one of the exempted activities in which the
exclusive use rule doesn't apply. Check with your tax preparer
and the IRS for an exact determination.

If you're a renter, you can deduct the part of your rent which is
attributable to the business share of your house or apartment.
Homeowners can take a deduction based on the depreciation of the
business portion of their house.

There is a limit to the amount you can deduct. This is the amount
equal to the gross income generated by the business, minus those
home expenses you could deduct even if you weren't operating a
business from your home. As an example, real estate taxes and
mortgage interest are deductible regardless of any business
activity in your home, so you must subtract from your business
gross income the percentage that's allocable to the business
portion of your home. You thus arrive at the maximum amount for
home-related business deductions.

If you are self-employed, you claim your business deductions on
SCHEDULE C, PROFIT(or LOSS) for BUSINESS OR PROFESSION. The IRS
emphasizes that claiming business-at-home deductions does not
automatically trigger an audit on your tax return. Even so, it is
always wise to keep meticulously within the proper guidelines,
and of course keep detailed records if you claim business related
expenses when you are working out of your home. You should
discuss this aspect of your operation with your tax preparer or a
person qualified in the field of small business tax requirements.

If your business earnings aren't subject to withholding tax, and
your estimated federal taxes are $100 or more, you'll probably be
filing a Declaration of Estimated Tax, Form 1040 ES. To complete
this form, you will have to estimate your income for the coming
year and also make a computation of the income tax and
self-employed tax you will owe.

The self-employment taxes pay for Social Security coverage.
If you have a salaried job covered by Social Security, the
self-employment tax applies only to that amount of your home
business income that, when added to your salary, reaches the
current ceiling. When you file your Form 1040-ES, which is due
April 15, you must make the first of four equal installment
payments on your estimated tax bill.

Another good way to trim taxes is by setting up a Keogh plan or
an Individual Retirement Account. With either of these, you can
shelter some of your home business income from taxes by investing
it for your retirement.

Website Or No Website…That's The Question

Do you want to make money through the Internet but you don't have enough experience or capital to start your own online business? You don't have to worry, for a lot of online marketing options exist for you to start with. One of these options, and shall I say the best, is affiliate marketing.

Affiliate marketing provides first time online marketers like you the chance to market something online even without having your own product to sell. All you have to do is to sign up with an affiliate marketing program, which is usually owned by an online merchant or retailer, and start picking the products you want to promote. As an affiliate, you are paid by the merchant for your services on a commission basis, that is whenever you have directed a visitor to the merchant's site and the visitor actually buys something.

Becoming an affiliate in an affiliate marketing program is often quick and easy, and for most affiliate programs, signing up is also free. But despite these and all the benefits being promised by affiliate programs, many people are still hesitant to get into affiliate marketing. One of the reasons why a lot of people remain hesitant is the lack of a website to start marketing his affiliate products with. This now leads us to the question of whether a website is required or necessary in affiliate marketing or not.

Many people say that one can do affiliate marketing even without a website to start with. Actually, one can really start promoting and marketing his affiliate products even without a website; and there exist a lot of ways on how this can be done. In fact, many affiliate marketing strategies that leads to success can exist without actually needing a website. Among these strategies are email marketing, offline promotions, writing e-books, writing ezines and engaging in online discussions like forums, chats, message boards and others.

*Email Marketing

Email marketing, or maintaining email lists, is actually the most popular affiliate marketing strategy that doesn't require the affiliate to maintain a website. In this affiliate marketing strategy, what you basically do is maintain a list of the email ads of your prospective customers and provide them with articles that are relevant with the affiliate products and programs you are promoting. Articles that you provide your contacts with need not always be promotional, for many individuals find such types of email annoying. Rather, it would be better if you provide them with something informative and just add small text ads that link to your merchant's site.

*Offline Promotion

There are many ways on how you can promote your affiliate products offline. Among the common medium used for such promotions are classified ads, brochures and flyers. Classified ads would generally work better compared to the other two because classified ads in periodicals often get a wider audience.

*Writing Free e-books

If you have a knack in writing, writing an e-book can be the best way for you to promote your affiliate products in the absence of an actual website. Just like in emails and newsletters, your readers would better appreciate your e-book if it is not too promotional but rather informative. Be sure, however, to make the contents of your e-books relative to the actual affiliate products you are promoting. And just like in email marketing, you can just place text ads or banners somewhere near the end of your e-book that links to the merchant's site.

*Writing Free Ezines

Ezines are publications or articles that aim to inform individuals about a particular topic. If you don't have a website and yet want to be an affiliate, you can well use ezines to promote your affiliate products or to insert links to your merchant's site. If you have a website, your ezine article may actually work well as content for your site. But since you have no website, you can just submit your free ezine articles to various websites that hosts ezines, like goarticles.com, ezinearticles.com and others.

*Online discussions (Forums, Chats, Message Boards, etc.)

With or without a website, you just can't ignore online discussions because they are great venues for marketing your affiliate products. In chats, forums, message boards and discussion boards with topics related to your products, you can easily find people who may be interested with the products you are promoting.

With all these strategies, it may appear that one really doesn't need to have a website to start marketing his affiliate products and promoting his affiliate programs. Well, starting in an affiliate program without a website may be easy, but getting successful in affiliate marketing without a website is another thing. While one can actually gain enormous success in affiliate marketing even without a website, it is a rare instance that "newbies" like you can reach the same levels of success.

Having a website is not really a pre-requisite in entering into an affiliate program, unless otherwise the program owner would require you to have one. But while this is so, I would still recommend that you have for yourself a website, if not now, then maybe at a later time. Having a website creates a lot of advantages in affiliate marketing. For one, it provides you a place where you can creatively promote not only one of your affiliate products but all of your affiliate products. With a website, you can also advertise your affiliate products to a wider market.

Again, having a website is not a requirement in affiliate marketing. But with the advantages that a website can provide, I'd rather have one for myself and make affiliate marketing a lot easier for me.

Autoresponders

The typical example of an autoresponder is a sequence of emails sent out over time to people
in the form of a 'mini course'.
Talk about a sequence of messages e.g. a person signs up and then they get
• Message #1 immediately
• Message #2 after 1 day
• Message #3 after 3 days
• Message #4 after 7 days
• Message #5 after 10 days
• And a new message every 10 days after that
What are the benifits of sending out Autoresponder messages
Stop and think for a moment. Most people who visit your web site come once, have a look
and then move on right? (it's what you do when you're looking around).
The problem is, people often forget who you are and they forget about your product or
service. But, if you can convince people to give you their email address and then over time
contact them (automatically of course), you do achieve some very important goals:
1. You get into people's long term memory. You build up recognition for you or your brand.
2. You build up a (very large) database of prospects you can contact at any time. Imagine
having a database of 50,000 prospects who are used to receiving high quality content
from you? If ever business is ever quiet, or if you want to maximize your sales, you can
simply send out an offer to your list of potential customers and drum up new work!
3. And you can position yourself as the guru for your particular industry!
The secret to success using Autoresponders
When it comes to writing successful autoresponder messages, the most important key is
having quality content.
Unless you provide your subscribers with some valuable information in return for the time they
spend reading your autoresponder messages, then they'll quickly lose interest in reading your
messages.
It's fine to include a sales pitch, but people must always feel they're getting more value than
sales pitch.
One option is to have a defined ratio of emails that are a sales pitch (e.g. 1 sales pitch to
every 5 content emails).
Another option is to write newsletter-style e-mails which are full of great content and put a
short sales pitch at the bottom of each e-mail.
Depending on your business model, one of these strategies might suit your business better
than the other - but both have proven to be very successful for Alliance Software clients who
have used them.
The nice thing is in many businesses, if you educate, you actually create the need for your
product service at the same time.
Think about it from the perspective of a website development business (e.g. Alliance
Software). By showing our customers some of the advanced web marketing strategies used
by the most successful online businesses today, we position ourselves as the natural
suppliers. You can do the same.
Isn't this spamming people? Won't this annoy some people?
The technical definition of spam is unsolicited commercial emails. So long as people have
given their consent for you to send them e-mails (which happens when they voluntarily sign
up), then it's not spam.
However, even without breaking the spam laws, you can still be viewed as a "spammer" if you
don't have quality content in your e-mails. If the content is good, people will appreciate your
emails. (It's like a trade - you're essentially "buying" the ability to give your sales pitch to
people in return for giving them valuable information.)
Finally, Autoresponder emails allow people to unsubscribe at any time. That means, if you do
offend or annoy someone, they are able to click a link and stop receiving your e-mails.
How do I get people to sign up for my Autoresponder sequence?
In order to get someone to sign up for your autoresponder sequence, you need to "sell" them
on the idea of giving you their e-mail address.
This means showing them the benefits of signing up to your autoresponder sequence, such
as telling them about the great information they'll receive on a regular basis.
A common trick used by Alliance Software clients is to offer an enticing little bonus at the start
in return for their e-mail address.
This is often something Downloadable (such as an e-book, audio or video download), but can
also be a small gift which is cheap to manufacture and post out (such as a DVD, CD or book),
or even a discount voucher they can use next time they buy from you.
Whatever you choose to offer as your enticing bonus in return for people signing up, make
sure it's something relevant to your customers, and something they would want to receive.
The better the bonus you're offering, the more likely it is that someone will sign up to your
autoresponder sequence.
Finally, when you're writing your pitch for people to sign up to your autoresponder sequence,
make sure you gain their trust by telling them how you will keep their personal details private,
and they won't receive spam.
A lot of people are distrustful of web-sites which ask them to provide their e-mail address as
many less scrupulous sites end up selling or renting e-mail addresses to spammers.
By putting these sort of fears to rest for your web-site visitors, it's more likely that they will give
you their e-mail address and sign up to your autoresponder series.
Can I send out special offers to my Autoresponder list?
Yes, of course you can!
If you have a special offer, or an announcement, you can send it to all (or a select group) of
your subscribers at any time.
Your autoresponder list is essentially a list of potential customers who have previously
expressed interest in your company.
Communicating your special offers and announcements to these people is a great idea if you
want to boost your sales!

PING SERVICES for your blogs

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Affiliate Program Marketing and Management Forums

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Forum
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