How to Start a Business With Limited Space
Starting a business with limited space is not as difficult as you may think. In fact, it can be easier and less expensive than starting a business in an office building or storefront location. A home-based company has the flexibility to work from any room of the house that suits their needs at any given time. This means they do not have to rent an entire office just for one person's desk, nor do they have to worry about paying high utility bills each month.
In addition, these entrepreneurs get more privacy and freedom while also being able to spend more quality time with family members who live in the same house or apartment too! Read on to learn more about the different aspects of a home-based business.
How to establish a home-based business
It is quite simple to establish a home-based business, especially if you already live in a place that suits your needs.
The first step would be to choose your business structure. The most common for new business owners is an LLC. There are many benefits to forming an LLC if you're running a business including limited liability, tax advantages, less paperwork, flexibility, and more. You can avoid hefty lawyer fees by filing yourself or by using a formation service. States have different regulations around forming an LLC, so check the rules in New York before moving ahead.
The next step would be to choose your workspace. This is important for tax reasons since you'll be able to take certain deductions based on the size of the room used for business.
Legalities of running a business from your home or apartment
According to the IRS, deducting expenses for home offices is typically based on the percentage of space used regularly and exclusively for business purposes. It can be difficult to know when you've reached this point; a good rule of thumb is that if your workspace is located in your house or apartment and you're doing similar activities there as compared with other rooms in the house, then you could be getting into an area that isn't deductible.
A good way to deal with this is by having a separate workspace or home office. If you work in a room separate from where your family lives, then it will be easier for you to meet the requirements of deducting expenses.
You also need to have adequate business insurance. Explore Larsen Insurance Agency’s business owners package (BOP) insurance options, as well as other must-haves like workers’ compensation if you have a staff.
Separating work from home life with a home officeHaving a separate workspace can make it easier to separate your work from home life, which is important for your mental health. Whether you opt for a simple desk in the corner of your living room or custom-built office space with filing cabinets and shelves, maintaining clear boundaries between your two worlds will help mitigate any conflict that may arise. For example, it would likely be difficult for you to relax in the room where your work life is taking place.
Starting a business with limited space is possible!Starting a business with limited space is possible, but there are some considerations you'll need to take into account. You should first choose your company structure and the type of workspace that will suit your needs best for tax purposes. If you work in an apartment or house where other people reside, it's important to maintain clear boundaries between work life and home life so as not to blur the lines.
Once you've considered the factors in this article, you should feel more confident about the basics of starting a new business. Get your business insurance quotes from Larsen Insurance Agency today.