The BizFilings blog covering business tips and trends.
Incorporating Your Home-Based Business
Published on May 29, 2009
Check out 'Incorporating Your Home-Based Business' at 'Time to Start Up,' the small business blog by BizFilings.
In an interview with “The Balancing Act,” a daily morning talk show on LIFETIME Television, I shared with viewers the benefits of incorporating their home-based business as well as the risks of not incorporating. (Watch "Incorporating Your Business" – 4 mins.)
If you are one of the 13.8 million people in the U.S. running a home-based business – or are thinking about starting one – the decision to incorporate your business may be one of the most important business decisions you will make.
One of the primary reasons today's home-based entrepreneurs are incorporating their small businesses is to protect their family's assets – savings accounts, home, car, etc. By incorporating your business, you create a protective barrier or separation between your business and your personal/family life. This separation significantly lowers your risk of losing some or all of your hard-earned assets due to something going wrong with your business.
There are other good reasons to incorporate, including potential tax savings, establishing credibility with lenders, as well as the fact that it is now easier and less expensive than ever to incorporate your business since you can now do it online, without expensive attorney fees.
With the combination of continued corporate downsizing plus an extremely tight job market, more people than ever are pursuing launching a home-based business. Women, in particular, are driving the home-based business trend, from those with full-time careers who were downsized, to an increasing number of women who want to enjoy the personal and financial rewards of a career yet also wish to be at home for their families.
If you're thinking about becoming part of this trend – or already are – I would strongly encourage you to consider incorporating your business or forming an LLC. We have articles and information on our site that allow you to compare different business structures, and if you're not sure which option is best for you, I would encourage you to talk to an attorney or your CPA for their thoughts as well.