March 30, 2011 Objective: Students will continue to evaluate factors when selecting a business location including selecting a home based business.

Homework Please turn in Assignment 7.3 at this time I will be coming around during our first In- Class Activity to ask you who you have selected for your Successful Entrepreneur Power Point. – If you have not selected a Successful Entrepreneur one will be assigned for you. – REMINDER, On Friday you will be creating your Successful Entrepreneur Power Point Presentations in the library and on Monday you will be Presenting them to the class.

7.3 In Class Activity Please turn in assignment 7.3 from Monday. You will have 25 minutes to work on the following activity in class. – You may work in small groups but you must each complete your own worksheet. – Worksheets are due at the end of the 25 minutes. There is a “right” answer but whether the answer is correct or not will be graded based on your analysis of the location and why it’s a good fit for that business.

Developing a Home Based Business The home-based business is the fastest growing market in the United States. One in four businesses located in an office or industrial area started in the home including: – Mary Kay – Hershey – Hewlett Packard – Ford – Apple

Home Based Business Advantages Lower overhead Work flexibility Disadvantages Feeling Isolated Need for self-discipline Lack of space

Do you Qualify for a Home-Office Deduction? Exclusive use: you must use a specific area of your home ONLY for your trade or business. Regular use: To qualify under the regular use you must use the space on a continuing basis. If you only use the space occasionally it does not qualify, even if you do not use if for any other purpose. Trade or Business Use: You must use part of your home in connection with a trade or business. Principal Place of Business: You can have more than one place of business, but to qualify to deduct the expenses for the business use of your home, it must be your principal place of business.

Principal Place of Business To qualify as your principal place of business you must: – Use it exclusively and regularly for administration or management of you business or trade and – Have no other fixed location where you conduct substantial administrative or management activities of your trade or business

Rules for Working at Home Organize Your Work Space: Setting aside your work space is a necessary element of any business… and an IRS requirement for a home based business. Take Care of Legal Responsibilities: A home business has all the same legal requirements as any other business. You still need a business license, DBA, and seller’s permit.

More Rules Set Business Hours: It’s harder to establish creditability as a home based business, your customers will take you more seriously if they see you operating with a set business schedule. Protect Your Business Hours: A home-based business is usually perceived as a place where visitors are welcome to show up and stay for a visit, you will need to work hard to protect your working time during business hours. Protect Your Free Hours: What days and hours are you closed? It’s easy to get sucked into working all sorts of hours, you need to guard your free time as well as your work time.

Rules Continued… Be Self-Disciplined: It’s easy to get distracted you will need a sense of self-discipline to successfully work from home. Dress for Success: Every trade has an acceptable mode of dress that should be followed, if your customer is going to have confidence in your products or services he or she must first have confidence in you. Be Credible: Unfortunately most home businesses are regarded as “little hobbies”. Home-based business owners will have to expend extra effort to prove credibility and attract customers.

Article Your homework for today calls for you to locate a current article about using your home for tax purposes. We are going to go around the room with each student reading one paragraph of the article.

Assignment 7.4 Locate a current article (less than 1 year old) from a credible source discussing: – Home office deduction particulars – how to qualify, cautions, penalties, ramifications upon sale of the home, etc… Summarize your article findings for the class. Include either the direct Internet web link to read the article When posting your written article review, conclude with a written paragraph summarizing if you feel at this time if operating out of your home is an option and the particular planned details (or not).