- The Washington Times - Wednesday, January 16, 2002

Beverley Williams makes about a 30-second commute to work every morning.

After breakfast, she merely shuttles from the kitchen to the other end of the house.

"When I left my retail management job about 14 years ago, I didn't have the money to go out and lease office space," she says. "I decided I was going into desktop publishing because that was something I could do at home from my computer. Now I am a professional speaker on home-based businesses."

Many people consider working from home the solution to juggling a career and a personal life. Ms. Williams does. In May 1991, she took what she had learned from home publishing and founded the American Association of Home-Based Businesses, a national, nonprofit organization of about 7,000 members. Through the association, she shares with those wishing to set up their own operations the tricks of the trade necessary to run a home office.

Ms. Williams, who lives in Derwood, Md., says picking a strategic place for a home office is an important decision. If it's impossible to take clients to the office without dragging them through the entire house, she suggests an alternative meeting place, such as a formal living room or hotel lobby. Her office is to the left of the foyer at the front door of her home.

"I tell people to use the 'see, hear and smell principle,'" she says. "At home, we get used to various odors and things in our houses, like the fish for dinner the night before, the noise from the dishwasher, and the cat litter boxes. Those things can be offensive to someone coming as a client."

People who have the money to build additions to their homes when creating their offices should make sure they check the zoning of their neighborhood and acquire the proper permits to build a home office, Ms. Williams says.

After choosing the place for the office, many people make the mistake of wasting money on things that they don't need, Ms. Williams says. She bought most of her office furniture secondhand from auctions, used-furniture stores and yard sales. She suggests that others do the same.

"When most people come into my office, they say, 'Wow, this looks very professional,'" she says. "You name it, and I have it in my office an oak desk, a credenza, filing cabinets, a work table, a fax stand, a storage cabinet but I spent very little money for them."

Although Ms. Williams purchased furnishings secondhand, she bought her office equipment brand new. She owns a Gateway personal computer and a "4-in-1" machine that faxes, prints, scans and copies.

"I think a computer is essential, even if it's only to use for e-mail, Web research and keeping your accounting records," she says. "It's also important to have a battery back-up power source and a file back-up system, such as a Zip drive."

No matter how tight the budget, definitely spend money on a separate phone line and answering machine or cell phone for the office, Ms. Williams says. If children answer the phone, it lessens the professional image of the company, and a post office box and an e-mail address for the office help business mail remain separate from personal mail.

"It used to be that everyone communicated through telephones and fax machines," Ms. Williams says. "Now it's cell phones and e-mail. So if you want to appear professional, you need the things that are necessary for your clients to be able to keep in touch with you. Make sure to have well-designed business cards with your contact information."

Privacy also contributes to the professional atmosphere of the business, Ms. Williams says.

"Having a private room with a door you can close helps to keep the family from intruding," she says. "The closed door means you're at work."

The families of home office workers should be briefed on how the business will run, Ms. Williams says. She says women often complain that their husbands don't support them enough. She suggests writing out a business plan for spouses.

"Show your husband you're being realistic about your plans and that there's an ending point if it doesn't work," Ms. Williams says. "Communication is really important. Otherwise, the other people in the house could come to resent you. If you tell your children that you're working at home so you can spend more time with them, but then you tell them you are busy when they try to spend time with you, you're giving them mixed messages."

Ms. Williams says that sometimes she posts office hours on her door to schedule her day between personal and business matters. It helps her organize her time. She also dresses professionally while working.

"Once you've disciplined yourself, you can work in your pajamas, but to put on your business hat, it helps to put on your business clothes," she says.

Sometimes, taking small business classes at a local college helps people to hone their vision, Ms. Williams says.

"I get so many people who have wonderful ideas, and they think that is enough," she says. "The biggest factor is how to market effectively. Before you can even do that you have to know if there is a market for your business."

Having a working relationship with an accountant provides the foundation for a profitable business, Ms. Williams says.

"It will cost you a little bit of money, but not nearly what you think it will cost, or what you could lose if you don't do it," she says.

Kathleen Eggers, a certified public accountant at the Burdette Smith Group in Fairfax, says self-employed people who use part of their homes for regular and exclusive business purposes can claim home office deductions on their individual income tax return. The deductions involve such items as a business percentage of home mortgage interest, real estate tax, homeowner's insurance and utilities.

"This deduction is for the self-employed as opposed to employees of a company working at home," she says.

Form 8829, "Expense for Business Use of Your Home," is filed for this purpose, Ms. Eggers says. However, a home office deduction cannot be used unless a net profit for the business is shown. Unused deductions can be carried into future income tax returns. In some places, such as Arlington, the county expects those people who claim the home office deductions to file for a business license and pay personal property tax.

"If there are expenses directly related to the home office for example, if you painted the home office then you can deduct that at 100 percent," Ms. Eggers says, "but in most cases, you deduct a percentage, which represents the square footage of the home office, divided by the total square footage of your home."

Lee Surut, a counselor at the Small Business Administration in Northwest, says sometimes self-employed people or sole proprietors decide to incorporate themselves to lessen financial risk. A corporation can be run out of a home in the same way as a sole proprietorship.

"If you are a sole proprietor and you go bankrupt, everything you own is available to your creditors, or those people suing you," Mr. Surut says. "A corporation will allow a creditor to have access only to what the corporation owns. To become a corporation, you have to have articles of incorporation, a board of directors, and periodic meetings with a record of those meetings."

Whether the business is labeled as a corporation or sole proprietorship, Barry Murrin, a Realtor at Remax Pros in Germantown, says the value of a home increases when an extra room exists that could be used for an office, especially when it has already been wired for telephone and Internet access.

"In some neighborhoods, it is assumed that you have a room for an office, and if it doesn't, it will be looked at as not an attractive house," Mr. Murrin says. "More people, if they aren't working out of their homes, may have an option to do telecommuting during the business week. Many people negotiate it into their contract to be able to work from home."

Ms. Williams says the best part about working from home is that she acts as her own boss. She likes the flexibility a home office provides.

"I like the fact I can stop in the middle of the day and work on a quilt or go to the grocery store," she says. "It's a different way of life because it involves my whole life, instead of being at work because someone's watching over my shoulder to make sure I'm there."

For more information on the American Association of Home-Based Businesses, log onto www.aahbb.org.

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