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How Your Home Business Can Affect Your Insurance

How Your Home Business Can Affect Your InsuranceOpening a home-based business has an impact on every aspect of your life. You will have to be extremely careful with your finances, because you can no longer count on the monthly paycheck. You have to learn how to do your taxes as a business owner, and you have to understand how your home-based business will impact your existing insurances.

One aspect, which we have already covered in previous articles, is getting special insurance for your home business. The other, which we will deal with in this article, is understanding that your current home, contents, car and public liability insurance will be affected by the fact that you operate a business out of your home.

Before we go into detail with these aspects, this is one key take-away you should retain from this article: always inform your insurers of the existence of your home business as soon as you have it registered and ready to operate. Failure to do so will not only result in their refusal to cover your claims. Your existing insurances may be not eligible for renewal or may even be voided on the spot when the insurance company finds out that you are running a home-based business.

That being said, here are the most important ways in which home-based businesses impact your insurances.

1. Home Insurance
Insurance companies include running a home-based business on the list of liabilities which give them reason to increase your monthly premium. Why is that so? In the reasoning of insurance companies, running a business increases risks, be it from the fact that you operate equipment which may malfunction and cause a fire, or from the fact that giving access to clients and suppliers to your home increases the risk of burglary.

When you inform your home insurer about your business, they will ask you a lot of questions about what type of activities you run and what area of the house is effectively used for running your business. Be honest and accurate in all your answers. Should you need to prepare a claim for an uninsured situation, it will backfire, leaving you without compensation and insurance coverage.

2. Contents Insurance
When you insure the contents of your home against burglary, fire and other calamities included in the policy, these contents are understood as your personal assets. There is also coverage for business equipment included in this policy, but it is usually up to $2,500. Most definitely, your office or professional equipment for running your business activities exceeds this amount.

You need to discuss with your insurer and obtain separate coverage for your business assets. Also, consider following the advice provided in the next item below.

3. Insurance for Business Interruption Risk
With all your insurances in place, when disaster strikes you will receive a bulk sum of money for your losses. However, it will be some time before you can replace your equipment, restart your business activities and obtain income from your business. This is why it is a good idea to consider insurance for business interruption – to give you a safety net before you recoup and go back into business.

4. Public Liability Insurance
Most people take out public liability insurance just in case someone slips and falls down the stairs or on ice while on your property. Once you open a home-based business, this kind of policy will definitely need an upgrade – at least in terms of monthly premium. The reason behind this is, obviously, that with the increased traffic on your property (deliveries, clients), there is an increased risk of accidents taking place.

Once again, you do not want to pretend the insurance company won’t find out you are running a business. With the first claim of this kind that you file, the entire situation will be out in the open and you will be left out in the cold.

5. Car Insurance
You may think that your car has nothing to do with your home business, so why should you inform the insurer or extend your policy? Here is a simple scenario: you go out for lunch or go to the post office to mail personal stuff. You cause an accident, no matter how minor. The insurance company finds out about your home business during the investigation of the case and claims you were using your car for business – which is not covered by your current policy. You are now liable to pay the damages out of your own pocket. This scenario is so common, it could happen any day.

These are the key aspects you need to consider when you forecast the expenses for your home-based business. All your existing insurances will definitely need to be upgraded, apart from the business insurances which you need to procure. However, a part of these extra expenses can be deducted on your tax return – allowing you to keep a larger proportion of your earnings.

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Home-Based Businesses and Zoning Laws

Home-Based Businesses and Zoning LawsRunning a home-based business should be simple enough: you get your license, register yourself with the IRS and you start operating. Actually, it is a little more complicated. There is an issue called zoning which can effectively prevent you from running certain kinds of businesses out of your home.

What Are Zoning Laws?
The development of American cities follows a certain pattern: you have business areas, industrial areas and residential areas. The zoning laws tell people owning or renting property what kind of activities they can perform in a specific area. For example, you would not open a children’s park in the middle of an industrial area with lots of factories, heavy machinery and pollution. And you would not open an adult entertainment facility in an office building.

Now, when it comes to residential areas, the inherent value of properties depends on how the respective area is perceived by potential buyers: safe for children, quiet, a civilized, helpful and friendly community, etc. In order to safeguard these values, the zoning laws limit various activities, even if you believe that they are not impacting your neighbors and the community as a whole.

These are the key aspects related to your home business which make it ineligible according to zoning laws:

1. Vehicle Parking
Whether you live in a residential complex or in a detached home, there are limitations to the number of vehicles you may park in your designated parking area, usually two or three. Therefore, if your business involves many deliveries, or the use of commercial trucks and vans, you may be in violation of your zoning laws with regard to vehicle parking.

A solution for this issue is to rent a mail address where you can receive your supplies and bring them home in your own car. This will also solve the problem of giving your home address to every delivery agent and supplier.

2. Customers Coming to Your Home Office
Residential communities are very careful about safety. Nobody likes to see a constant coming and going of strangers. This is even less acceptable if you live in a gated community or a residential complex. Your neighbors could and will complain to the administrator of the residential area and you may be forced to stop running your business.

There are options for you in this situation, as well: meet with clients in cafés, or rent office space by the hour in special business incubator hubs which offer small entrepreneurs the chance to conduct their activities in a professional environment.

3. Noise
Noise is a big no-no in all residential communities. Once they came back from their busy jobs, people want to relax and rest at home. They certainly do not want to hear you crafting products or operating any machines which cause noise. Most certainly, you cannot run these machines even in your garage.

The only solution is quite expensive: you should soundproof your workshop to your neighbors’ satisfaction.

4. Keeping Dangerous Goods
Chemicals of all kind, and flammable or potentially explosive materials are completely forbidden in residential homes. If your home-based business involves working with such substances and goods, then you should consider renting an adequate workshop in an area which permits such substances.

5. Signage
Displaying a sign for your home-based business is also forbidden in residential areas. According to local or homeowners’ association regulations, you may be even required to maintain the aspect of your house in a specific manner. Any changes, including signage, are not acceptable.

The only way out is to challenge the rules by official proceedings or try to obtain an exception for your home.

Last, but not least, when you start planning your home business, imagine your neighbors doing the exact thing you want to do. Would their activities impact your life? This initial consideration will help you decide whether you can run that business from home according to the zoning laws in your area.

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The Best Management Tools for Home-Based Businesses

The Best Management Tools for Home-Based BusinessesAny skilled worker needs the right tools. And any successful businessman needs the right software and apps to manage their daily activities. Even if your business is simple, or just at the beginning, you still need to look for ways to automate repetitive tasks, set up reminders for important events and keep track of your work in progress.

Yes, even home-based business owners should use management tools, because as your business grows you need to be familiar with them. At a point, you may acutely need such tools. Wouldn’t it be great if you already know how to use and take advantage of their features, instead of spending valuable time learning your way around them?

Today we will present you the most comprehensive and useful business tools for small and home-based businesses. These tools will teach you how to manage your time and work in an effective manner, preparing yourself for the moment when you have to manage a much larger and busier company.

Without further ado, we believe you should try at least one of these business management software suites:

1. Apptivo
Apptivo is an affordable all-in-one business suite which is adapted to small, medium and large companies alike. What do you get when you join Apptivo? First of all, an integrated virtual workplace where you can keep track of customer orders, supplies purchases and invoices you issue your clients. At the same time, you can look over your expenses and cash flow and get an accurate picture of the financial situation of your business.

Once your home-based business grows and you hire contractors and employees, you will continue to manage projects through Apptivo, using its project management and collaborative tools. To make the deal even sweeter, Apptivo can be fully integrated with PayPal, Dropbox, G Suite and Authorize.Net.

2. OfficeBooks
OfficeBooks is the software tool you need to keep all your finances under control and manage your quotations and offers in a professional manner. OfficeBooks includes:

⦁ Inventory control
⦁ Professional quotation generator
⦁ Professionally organized business contact list
⦁ Credit card payment acceptance
⦁ Various financial reports

With the help of all these features, you will never lose track of a single offer sent to a potential customer or invoice issued for selling your products and services. At the same time, the professional report generator will help you prepare your taxes and prepare financial reports for banks and other potential investors.

3. 1CRM
Client relationship management is something you need to learn from the first days as a business owner. Customers need to be kept happy and loyal and this is done by meaningful communication and effective marketing strategies. With the help of 1CRM, you will be able to conduct your customer care and marketing activities like a pro.

Its key features are:

⦁ Customer order management
⦁ Marketing automation
⦁ Sales tracking
⦁ Customer care (recurring services, bug reporting, knowledge base)
⦁ Calendar and daily agenda management

By taking full advantage of 1CRM and its features, your marketing and customer support work will be at the highest level, enabling you to offer your customer the professionalism they expect from you.

4. Zoho
Zoho is your best friend if you want to become a pro at managing your online store. Its latest feature is Zia, an artificial intelligence-based sales assistant, which will welcome and guide your customers through the purchase process.

Apart for this innovative CRM feature, Zoho offers you a complete virtual office including: office suite (texts, spreadsheets, and presentations), collaborative tools for multiple users and business email accounts.

5. Producteev
Never forget a deadline and prioritize your tasks like an experienced CEO – these are just two of the key features of Producteev, a time management and productivity tool every business owner needs. With Producteev, you can set your daily agenda, create and manage projects, individual tasks and add labels for various activities.

In short, you will put order in your activities, know exactly what you have to do each day and deliver each project or order on the due date, to your customers’ satisfaction.

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