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Look Like a Business

By Kay Green
My Precious Kid Copyright 2005

When beginning a home business it is very important that it look like a business. Looking like a legitimate business may decrease your chances of being audited. Looking like a professional business may also help your sales increase. Showing a profit 3 out of your first 5 years may also reduce your chances of being audited.

To look like a business you need the following:

1. BUSINESS NAME - Search to make sure it is not being used by others. Check to see that no one owns the trademark on that name. See if the online URL to match it is available.

2. BUSINESS LICENSE - Get a business license if required by your city/state.

Apply for a tax resellers number from your state. The resellers licenses is require to buy wholesale from most wholesale vendors. A free EIN (employer
identification number) may also be required for some vendors.

3. BUSINESS CHECKING ACCOUNT - All income needs to be deposited into that account with a note in the register what the income came from (and a
matching invoice for that income). All expenses need to come out of this checking account (or a separate business credit card) using notes in the
register explaining all expenses. IRS prefers to see a clear separation of household money and business money. Take personal draws from this account
when you have acquired profits. Separating business and personal funds is a good idea.

4. CREDIT CARD - Have one that is just used for business. Use the business checking account to pay this bill as well. You may need it for cash flow to
order supplies before you are paid for sales.

5. MERCHANT ACCOUNT - so you can accept credit cards for sales. Merchant Accounts accept Visa and Master Card with additional fees for Discover and
American Express. Setting up a business account with Paypal is also advisable. Studies have shown that customers will spend 36% more using a credit card than cash.

6. BUSINESS CARDS - Cards to give to potential customers and contacts. They help your business look professional. Lots of low cost options for this.

7. DOMAIN NAME - Purchase your own domain name and hosting. Do not try to have a business web site on a free server. You want to look professional.

Advertising online and offline. Advertising for clients shows IRS you are a business working to make a profit.

8. BOOKKEEPING RECORDS - Records that pull in all income and expenses from your business checking account, business credit card and cash (I hope you
never pay cash for business expenses). QuickBooks, Quicken, and Microsoft Money all work well for small home businesses. If you have multiple products
I suggest QuickBooks for better record keeping. Monthly receipts and invoices to back up all expenses and income.

9. MILEAGE LOGS - A record of every where you go and every mile that is connected to business and every mile that is connected to volunteer activities. Always write down your cars mileage on January 1st (ending year and beginning year).

10. TAX SAVVY GUIDE - I suggest reading the book Tax Savvy for the Small Business and Tax Savvy Guide. It is very valuable in telling you what can be
deducted in your business. It saved me $2000 the first year.

About this contributor:

Articles written by Kay Green, Christian homeschool mom to Melissa 22, Jordan 20, Allison 17, Haley 4. She and her husband of 25 years live in rural Oregon with their children.

Kay owns http://www.MyPreciousKid.com children's safety products and home business program. Kay loves helping others have a successful home business too. And http://www.Preciouskids.org Adoption & Homeschool Resources. Kay has pulled in all her free business resources at http://www.123HomeBusinessGuide.com

COPYRIGHT 2000-2005 My Precious Kids, Kay Green All rights reserved. Reprinting is only with permission and with this author's box and copyright
intact.