How to Start a Business on a Budget

Often we are hear many lies about starting a business. For many the term ‘you need money to make money’ comes to mind. And though this maybe true in some respects, it is not the case for the many businesses which actually start and succeed.

What is a business? A business in its simple sense is a value creator. In the form of products or services the point is that the business creates value. And this value does not simply need to be to a consumer, it can be to other businesses, in an intriguing way. For example a company that has stocks will be able to trade shares, and this in a way inadvertently creates value.

The main point above was to dispel the view that you need money to make money. You are a business in your own right. You create value, and as an entrepreneur you create value. This value can be immense.

For example, you may not have much money, but with that money, a man or woman with an idea and a plan, can easily raise the money to start a business. This business can have its funding from business loans and even from venture capital or angel investors. The point is that you don’t need the money to start a business, whether that is small, medium or big.

By far the easiest way to get into business is with a home business. The benefit is that it is more self contained. You don’t need to write big business plans, you don’t need to get funding, and you can fund the business easily. If you only have a few hundred dollars, you can easily start a home business, and the benefits are immense. With a home based business you will not need expensive rent on retail or office space, you can get the business off the ground in your bedroom or a spare room – like how I and many others who have created successful businesses started.

I simply love home business, the concept and idea and for many reasons. The first is that for many people, they feel like if they only had the money, they could get office or retail space, and make money with it, because they had what is needed, but this is far from the truth. The fact is that many people who start a business fail, because they believe that with money they can make money.

A home business also gives you access to many successful home business opportunities. These opportunities are ready to run. Many of them have created big success, and can do the same for you. The added bonus is that these opportunities show you a plan that has made that business successful.

Another option for home business is that of freelancing. Instead of working for one employer, freelancing to many clients can help you earn more, and at the same time not have to wait so long until you start earning money in a business.

As always all these options allow you to grow in your own pace. A business, even in retail space requires time to get established. A business from home allows you to test and grow your business, and when it reaches the necessary size can be put into a retail or office location and soon get staff and expand.

Training For Success With Your Internet Business, Article 6, Motor Vehicle Expenses

As a home business owner, you may deduct the cost of driving in the course of your home based business, including trips to business meetings or seminars, to entertain clients outside your home, to pick up products and office supplies, to make deliveries, and to do business banking.
If you are engaged in a network marketing business or an MLM Business, the cost of visiting prospective clients and persons (Leads) you would like to recruit into your sales organization is deductible, even if you are not successful in your recruiting efforts.

If your home-based business is your only employment, all of your driving to and from your home office, which is your principal place of business, and different locations where you are actually involved in carrying on your business, is deductible. But if you are also employed elsewhere, as an employee, figuring your deductible business mileage is slightly more complicated. The reason being that commuting between your home and place of work is normally considered a personal expense and is not deductible as a business expense.

In order to deduct business mileage as a home office business expense, you must show that your home is your principal place of business. Your principal place of business is where you regularly meet with clients or customers, where your more important work is done, or where you spend most of your time. The cost of going from your home office to a related business location is deductible, even if your home office is the site of a secondary business or job. For example, driving from home to the bank to deposit business checks provides mileage that is deductible as a business expense.

Where a home-based business is only worked part time, be sure to conduct business in your home before going to a related business location, such as the bank above, or you will risk losing the deduction. Keep a daily record of your business activities at home to prove you were traveling between two business locations on that day.

Computing your auto expense.
There are two methods of computing your automobile expense:
the mileage rate or
the actual expenses method.

You may use either method to calculate your costs. You will, obviously, want to use the method that gives you the higher deduction.

Mileage rate. You may deduct a certain amount (this is an amount provided for by the tax legislation in the country in which you are carrying on your home based business) per mile for business driving. If you use this method, you must combine the mileage for all cars driven for the same business. If you use the mileage rate, you may additionally, usually deduct parking fees and tolls.

Actual expenses method. Alternately, you may deduct the business portion of the expenses of operating your car, such as gas, oil, repairs, insurance, car washes, tires, auto loan interest and depreciation, if you purchased the vehicle or lease costs if the vehicle is being leased.
Generally, if you buy a new car during the year, the actual expenses method will exceed the mileage rate method. This presumes, of course, that you keep complete records of your expenses throughout the year. If not, you should use the mileage rate instead. Only expenses attributable to your business use of the car are deductible.

This means you must allocate your operating costs and depreciation according to your percentage of business use. Usually, parking fees and tolls do not have to be allocated, however.
To calculate Motor Vehicle Expenses you will need to record and have available the following information:

Total distance driven in year.

Total distance driven during year for business purposes. ( You would be well advised to keep a logbook to record this information on a regular basis.)

If you receive any reimbursement and or allowance for using your motor vehicle, and it is not included in your income, you must deduct this amount from any claim that you make.

Fuel Costs,
Repairs & Maintenance,
Lease Payments if Vehicle is Leased,
Copy of Lease if Vehicle is Leased,
Vehicle Washes,
Insurance,
Licence and Registration,
Parking Costs and tolls,
If Vehicle is owned, Make, Model & Year of Vehicle,
Year of Purchase of Vehicle,
Cost of Vehicle,
Interest on money borrowed to purchase vehicle,

Note: Taxation legislation differs between countries and each country may change their rules at any time. The information provided in these newsletters is accurate at time of publication. You should however seek specific information from your Tax Advisor or Taxation Department as it relates to your own situation each year that you are required to provide Income and Expense Statements.

Other topics in this series are as follows:

Number 1, Record Keeping,
Number 2, General Expenses,
Number 3, Purchase of Goods for Resale,
Number 4, Deductions for use of Home,
Number 5, Entertainment Expenses,
Number 7, Depreciation Costs,
Number 8, Business Meals,
Number 9, Salary Payments to Children,
Number 10, Travel Expenses,
Number 11, Demonstrators Samples & Promotional Tools,
Number 12, Gifts,
Number 13, Here Comes the Tax Man,
Number 14, Capital Items

Maximizing Your Business Credit Card’s Potential

Some people believe that business credit cards are not necessary for a business at all. However, although many successful businesses in the past were able to get by without business credit cards, this doesn’t mean entrepreneurs today should pass on the opportunity of getting one.

It is true that the incorrect use of business credit cards can cause serious debt problems but if you know how to handle your credit card responsibly, then surely you and your business can benefit from the flexibility and conveniences that business credit cards bring. In this article, let’s focus on the advantages of small business credit cards and how you can use them to their full potential:

Keeps Your Cash Flow Steady. Every business is confronted with the challenge of keeping up with daily expenses. There may be times when your petty cash isn’t enough to cover for everything. On these occasions, having a business credit card on hand is indispensable. When unexpected expenses arise, you can simply charge them on your card and pay at a later time. Nevertheless, don’t take this as an opportunity to spend more than what you can afford. Although a business credit card can cover some of your operating costs, make sure that you can pay back your charges on time.

Build-up Your Business Credit. Building your business credit history is definitely easier with the help of credit cards. Bear in mind that building good credit and maintaining an excellent credit status depends on your timelines of submitting your credit card payments. Furthermore, you should also pay attention on how much of your credit limit is used. Ideally, to keep a high credit score, you should not exceed more than 50% of your allotted credit.

Track Your Business Spending. Even with the use of business accounting software, having a business credit card is another way to easily monitor your accounts. Monthly billing statements as well as quarterly and yearly account summaries from your credit card company can be used as references to your accounting particularly when filing your business taxes.

Account summaries present an itemized and detailed record of all purchases you’ve made for the past year. If you’re a home based business owner, you can easily determine which of your purchases are tax deductible and which ones are not. You can even find business credit cards that offer downloadable account summaries so you can use them along with your accounting software.

Get rewarded from your credit card spending. A lot of business credit cards in the market offer rewards. You can find a wide variety of credit card rewards programs that are especially created to meet the needs of small business owners. Since businesses generally spend a lot on their operations, they also have more opportunity to earn bigger rewards at a faster rate than personal credit card holders. By choosing a business reward credit card that complements your business’s spending, you can certainly get more from a reward business credit card.