Home Based Business Key Terms

Some very common key terms for a home based business

By J. Stoltzfus, writer/programmer LOCAL CITIZEN

Although every business is by its nature unique, there are some general key terms that apply to the majority of home based business entities. A home based business often includes some specific factors regarding annual operations, taxation and legal definition. A business that wants to operate on a "home based" paradigm should be familiar with not only the basic nuts and bolts of home based business types, but also the specifics of what, how and where a founder wants to start one up.

Sole proprietor

Anyone starting a home based business is usually a sole proprietor in that they are running a business by themselves. Not all home based businesses are sole proprietorships, but this term will be a "must know" for businesses that deal in this kind of work setup.
Try: Find out more about sole proprietors at Nolo. This IRS page gives more information on how the government views sole proprietorships.

EIN

The EIN or employer ID number will apply to many home based businesses. The EIN allows for more business activities to happen from a home office, including hiring additional employees or reporting outside income.
Try: Find out more about the EIN at WiseGeek.

Home office

Lots of home based businesses include the home office in official expenses for a tax filing break. But the conventional wisdom on this is that home based businesses should look very carefully into whether a home space is ONLY a work space before claiming a true "home office."
Try: Get tax tips on claiming a home office from BMighty.

Zoning

Zoning laws in municipalities might be a liability for some types of home based business. It's good to read up on applicable zoning law before creating any kind of business at home, especially if it will require client visits or lead to noise on the property.
Try: Find out more about zoning for home based businesses at Entrepreneur.com.

Assets

One thing that can help in brainstorming a home based business is what kind of things or assets a business has at its disposal at any given moment. Also, choose a business that you will enjoy operating. The nature of business is conveniently vague, and a home based business can be tailored to what a startup entrepreneur can manage to acquire.
Try: Find out more about using assets and making the right choice in starting a home business at this Small Office Home Office site.

Telecommuting

A home based business owner or manager generally telecommutes. So too do the employees, if there are any. Telecommuting is just the act of becoming involved in business, not through physically commuting to a business space, but through communicating from a home office or space.
Try: Check out this page at Westchester's Smart Commute Program for more on telecommuting.