How I Run My Home-Based Business

One of the more frequently asked questions I get is, “how do you run your business?”

People are often curious what tools, tricks, processes I use to do what I do. So if you work from home maybe this will be helpful, or maybe you have some great ideas for me and the other readers that you can share in the comments below.

As most self-employed workers know, there are many hats that need to be worn, so the more we can help each other out, the better off we will be.

Running a home-based business

I know full well that being a full-time blogger (read: how to make money blogging) is not the most common profession and my business is a different than many other home-based businesses.

But, business is business, and I am sure there are also a lot of similarities as well.

Time Management

Being my own boss

This is one of the biggest challenges of self-employment. As someone who spent most of the last 10 years as an employee, it has been a challenge being the boss of myself and keeping myself accountable. I am tough on myself and that is probably the only reason this has worked.

As funny as it sounds I make mental shifts from boss to employee. So I will spend half a day as “the boss” scheduling out what I will do the rest of the week/month. Then I flip into “employee” mode and work diligently to do it.

I have found that if I don’t set time aside to be “the boss” then I just kind of coast and don’t get nearly as much done as if I have a task list or goal laid out in front of me.

Making sure that the business doesn’t run my life

I decided when I started this biz that it would be my slave and that I would never become a slave to it. For example, I have seen a lot of small business owners create businesses only to find themselves working 80 hours a week because they created something that now runs their life. It is rarely intentional, but it seems that if you don’t intentionally set up a system that keeps you in the driver’s seat then it defaults to eating up all your time.

Tony Robbins once said something that really stuck out to me. He said that we find the answers to the questions that we ask. So many people just ask “how can I make this business successful?”  But I intentionally ask myself how I can make it successful and not allow it to run my life.

As a result of continually asking that question, I don’t even see answers that will ONLY cause the business to be successful. I wait until I find the answer that will answer both questions. When I do, then I act.

Scheduling

I am always looking for better ways to manage my time and be as efficient and effective as possible. What has worked best so far is my determining key important tasks and scheduling them as blocks of time each week. I only schedule about half of my working day each day because there are so many inevitable things that come up that need to be done. But I am diligent to do the scheduled tasks each week.

As Steven Covey would say, success comes from doing the important things regularly rather than just always focusing on the urgent. The key here being that often urgent things may not really be that important. And many important things are not very urgent. Which is why so many people never do them!

Business Structure

I started this blog as a hobby back in 2007, I only made about $100 total with it the first 6 months – so a sole proprietorship was the perfect business entity. By the way, if you do nothing, you are automatically a sole proprietor. I didn’t realize this when I started, but if you just start a business and don’t form an LLC, Partnership, etc, then by default the IRS considers you a sole proprietor.

Running the biz as a sole proprietor is the cheapest and simplest – because you don’t have to do anything different. You just mark your business earnings on your tax return along with income from your spouse’s employer, etc.

From what I understand the biggest downside of being a sole proprietor is that you don’t have much legal protection. So if your business get’s sued, they can take your house. That’s no fun.

Forming an LLC

I ran my business as a sole proprietor for about a year and a half until I formed a single-member LLC. There are a few different options when choosing your business entity, but I chose the LLC for a couple reasons.

It was simple to run

As a single-member LLC, no % of ownership needed to be divided up. Really, not much changed from running the sole prop as far as what I needed to do to maintain it. I still get to use a single tax form, instead of one for the business and one for personal.

Legal Protection

I am not a lawyer and don’t fully understand the legal protection that is provided. But after doing a bit of investigating, it became pretty clear that an LLC would be safer than a sole prop.

It proves to the IRS that you mean business

Apparently there are a lot of people who create home-based “businesses” to try to pull the wool over the eyes of the IRS. I remember reading that the likelihood of an audit is decreased by 90% for LLCs vs. sole proprietors.

How I did it

I was a bit freaked out about the process, because I had never done it. I thought it was going to cost me a lot of money – it absolutely doesn’t have to.

I was blessed to have a buddy who is a lawyer who volunteered to meet for an hour and we just filled out the online government forms for Missouri. To find the forms you could probably just Google “Your State + LLC”.

It was really a lot simpler than I thought. I think it cost me about $100-$150 to do it. If you are nervous about doing it yourself, you can get cheap (or free) help by doing it through a site like MyCorporation.com.

Bottom line: I know there are probably some advantages to hiring a lawyer who specializes in this, but I just didn’t have the $1000-$1500 laying around that I estimated it would cost.

Tax ID number

I also applied for a Tax ID number (basically the Social Security Number equivalent for a business) because I preferred to keep my SSN out of everything and because it was require by my bank to open a business account. It took about 5 minutes to fill out the form was completely free. You can get started now here.

Trademarks

I am kind of up in the air about trademarks. They are an expensive pain to deal with, but if you have something you want to protect, they are necessary.

In my case, I wanted to protect my tagline – “Make it. Save it. Grow it. Give it.” especially when I saw a clear instance of someone infringing on it. So if you have something that you think is worth protecting, it might be worth it. But even if you don’t use a lawyer (which is very difficult to do in trademark law) it is an expensive process.

Day to Day

  • I use Gmail to manage all my email. It is great because it works as an email hub allowing you to send and receive email from all your other email accounts. I can access it from anywhere and they give plenty of storage.
  • I use Google Calendar to set my schedule and manage my time (as best as I know how).
  • I use Evernote as my tool of choice for notetaking, storing ideas, or just about anything else. It is truly an amazing tool. I recommend this: how to use Evernote.
  • I live in Todoist.  It is the best todo list tool I have found and I use a version of the GTD system for my tasks
  • I use a iPhone as my mobile device. I use it to approve comments, schedule tasks, jot down ideas, take notes, even write quick posts from my phone.
  • I have a Mac Mini that I use as my desktop. I upgraded the memory as soon as I got it – money well spent.
  • I do use a dual monitor setup (with this mount) and can’t imagine going back to one monitor.
  • This is my webcam and it is the best i’ve found
  • I use this standing desk and this mat (having a good mat is very important!)
  • I also have an Macbook Air that I tote around when writing at a coffee shop. I am using it as I write this and it gets the job done.

A real business address

Similar to how I preferred to get a Tax ID number instead of using my SSN for the business stuff, I felt the same way about my home address. I do work from home, but the address for my business is

625 Bakers Bridge Ave.  Suite 105-134 Franklin, TN  37067

I got this by renting a mailbox from the local Goin Postal Store for about $15/month. I like it because I don’t have to announce my home address to the whole world and it looks a little more professional.

Software

Quickbooks – I use Quickbooks Online to keep track of all my business financial stuff. I don’t love it, but it is WAY better than the desktop versions of Quickbooks.

Some of this is more specific to what I do, but if you run a blog it might be helpful.

  • Ecto is my favorite desktop publishing tool for Mac ($20) – I don’t use it as much any more, but it is great.
  • I use Photoshop essentials or Gimp (free) for photo-editing and any kind of graphic design stuff.
  • Imagewell – For Mac. It is the quickest image editor I have found. It costs $25 (i think) and it is worth every penny for me.

Banking

I do my banking with US Bank. I would prefer to use a credit union, but I couldn’t find one that had a free account. At time when I was shopping for a bank, US Bank was the only one I could find that was free. I have yet to need an actual paper check, so I never bought them. I use my debit card for every purchase.

I also have a Paypal account that is linked to the US Bank account as well. Some of the ad networks I work with only pay using Paypal, so it is a must for me.

Thoughts?

So, this was all I could think of about running my business, so if you have any other advice on how to run a home-based business or have any other questions for me – fire away in the comments below and I will try to get to them all…

Photo by: Amanki

Ready to Quit Living Paycheck-to-Paycheck?

Just click to join 225,000+ others and take our FREE email course to better manage your money, pay off debt, and save! And get FREE access to our money-saving workshop ($29 value)!

Related Articles:



27 Comments
  1. Bob, thank you, Thank You, THANK YOU for writing this article. You touched on many of the key questions I had, and I will utilize these tips going forward. We (us newbie bloggers) needed something like this. One question I have: you said you set a block amount of time to get the important things done. Do you set your work hours Mon-Fri, or during certain times of day, etc? What works well for you? Thanks again for this article. Great post!

  2. PT

    Great post, Bob. Very similar to my own setup. I loved your points about boss/employee. I don’t stop enough to put on the boss hat. I use Gnucash for accounting. And I haven’t sprung for the business address yet. Need to do that. Have you considered the S Corp election for tax purposes?

    • Bob

      @John
      I do basically schedule M-F – I occasionally work a little on Saturday if need be. I work mostly during the days, but if it is a nice day I normally go play outside and then make up the work that evening…

      @PT
      I haven’t looked into the S-corp much yet, it is something I am planning to revisit before year end…

      @Kita
      I have a day pretty much dedicated to writing as well as a day specifically for social stuff, bookmarking, blog carnivals, etc. Emails I try to get to the “urgent” ones each day, and have two blocks of time each week scheduled where I process the rest of them to try to get to inbox-zero.

  3. John

    Thank you so much for this article. I am a newbie blogger, and I have a hard time focusing some times. I will definitely start making a daily and weekly to do list (as this is what seems to work best for me). I simply love to check things off of my list–which hopefully means it will help keep me focused. Thanks again.

  4. Thanks for sharing this! I really like the idea of spending time in “boss mode” and employee mode. I’d be interested in the breakdown of your work day. How much time is spent (percentage wise) planning future articles, writing those articles, promotions (including stuff like carnival submissions), responding to emails, etc

    Kita

  5. Peter

    I think if I were to go full time with the blog, one of my biggest hurdles would probably be staying on task and managing my time in an effective manner. I have a tendency to get sidetracked with a million and one side tasks that eat up my time, and don’t leave time for more important tasks. I think using your suggestion of scheduling my day/week would be key if I were to succeed.

    As far as the LLC vs Sole Proprietor debate, I’ve read that it offers more protection against lawsuits and the like – however – I’ve also heard from others that it isn’t as much protection as you might think. Definitely something I need to investigate further as I keep considering whether I should form an LLC.

    I’ve also considered getting a P.O Box or something along those lines in order to have a different address for things like my email newsletter address (not sure i like having my actual address on there) and for having people send me things for the blog. My local post office has a small box available for only $48/year. Not a bad deal, and I’ll probably be jumping on that soon.

  6. Gilda

    This was a great article. I’ve done some of these items and it was nice to see someone else share what they do. Also it was so thorough it got me thinking on the “next steps” and other items I probably should do for my home business. Thank you.

  7. Cara

    Just a few thoughts from someone with a Masters in Accounting…

    This quote doesn’t quite make sense, “I remember reading that the likelihood of an audit is decreased by 90% for LLCs vs. sole proprietors.”

    LLCs are a state thing, NOT an IRS thing. You have a choice, as an LLC, to file your taxes either as a Sole Proprietor or a Partnership because there is no LLC in the eyes of the IRS. Since you are only adding 1 form to your taxes (and not using a k-1), that means you are, in fact, filing as a sole proprietor.

    See the irs website here: http://www.irs.gov/businesses/small/article/0,,id=98277,00.html

    The IRS site states, “The federal government does not recognize an LLC as a classification for federal tax purposes. An LLC business entity must file as a corporation, partnership or sole proprietorship tax return.”

    Also, from my research (and my tax accounting professor), an LLC provides you no protection from the loss of your personal assets IF there is only one member to the LLC. I would consider adding another member to your LLC to add the protection. However, then you would have to file taxes as a partnership.

    • Bob

      @Cara
      thanks for the free advice! As far as what I wrote about the audit risk, I remember reading it in an article and I don’t remember where, but thanks for clarifying…

      @Stacee
      To me it makes sense, but I would keep in mind what Cara wrote above…

    • Natalia

      Just two quick questions! Is a marriage or couple in the same household, able to file as “a partnership” in order to receive the protection you have mentioned from the LLC? “We” are starting a home business. We both have experience as the boss and as employee. I have taken over the schedule, arranging the “work” time, but I already for see one of the things that was pointed out, at 80+ hours a week from both of us, we are going to need a chance to have a life. I know being focused is necessary, but do you have any tips on how to turn it off each day! Thank you

  8. GBR Briana

    I like that you set time to be the boss and the employee. Maybe you can find a more efficient way to be the boss where it takes up less time so you have more time to complete the tasks.

    I also like that you only schedule half your day so you have time for the unforeseen things to come up. Do you color code at all? I’ve found that that’s easy for category and priority management in my schedules.

    The IRS tip for Sole Proprietors vs. LLCs was amazing! Thanks for that; a scary number. Also thanks for the Google tip for the forms of forming a business and MyCorporation.com; great resources.

    I love Gmail, Google Calendar, and Evernote. Considering a Droid.

    You’re doing a great job! Keep up the good work!

  9. [email protected]

    Yes, it was a really good post! I especially appreciated that the “to do” list could be applied to any at home start-up for a person who wants to test the waters before jumping right in. Thanks.

  10. I found this very helpful in reference to Cara’s comment!
    http://www.bernsteinlaw.com/pdfs/tricias_article_with_letter.pdf

    • Bob

      Thanks John, that is very helpful!

  11. Evan

    Bob great wrap up…I love these kinds of insightful posts from bigger blogs! I think your money post was one of first that got me into monetization.

  12. Larry

    Excellent article Bob. Like PT, I really liked your point about being the boss and worker and having to change hats. Really great tip.

    Glad to hear you’re a fellow Mac user too!

  13. Bob

    @Michelle
    I think I hover around 40 hours each week. If I need some time off I regularly take it, but at the same time if I have something I am in the middle of I can find myself working 10-12 hours in a day – but I’ll bet it averages to about 40 a week…

  14. Andrew

    This is a great post and extremely applicable to the budding online world and all those freelancers/bloggers and small business owners. The LLC stuff has always confused me a bit too, but it sounds like there’s certainly not any disadvantage (other than the upfront costs) to going this route.

  15. Joe

    The boss/employee approach is actually a really interesting idea. I’ve never heard of it, but it seems like it should be effective.

  16. Janet

    Thanks for the interesting article. It was very helpful, as I am just jumping into the water. I was just wondering how you go about making and receiving your calls? Do you have a separate phone line or do you use your personal phone and number. Also, do you pay your taxes quarterly or yearly? What works best for you? Any suggestions for affordable websites?

    Thanks again,

    • John Frainee

      Janet, I know some people use their personal line and don’t claim it as a business expense. I know others who keep it separate. Everyone is different, so you have to find what works well for you!

  17. Leigh Laird

    Thanks for this!!! Great information. I’m getting ready to launch a voice-over business from my home and everything you put in this article was helpful to me…. Thanks and God Bless you!!

  18. Debbie

    This was an absolutely fantastic informative article. Thank you SO much following your instinct to write it. It touched on every question I had, and then some!

  19. Bubby

    It’s really great that people are sharing this informtaoin.

  20. Sbrown

    I am applying for a grant for an Independent Living Facility to house 3 to 4 senior citizens. Can I use your how to start my own business plan?

  21. Fernanda

    Thank you so much for all your information. I am opening a SPA and I was looking for Godly advise and I found you. I am thankful for your life. I never run a business by myself before, so I am asking the good lord to be with me. Fallowing God rules is my priority now and I know you are gift he provided to me. Thank you Again

  22. Mita

    Thanks Bob! You took the words out of my mouth and it felt like you were in my head processing my thoughts about blogging! Great article!

    It is refreshing to see how your faith figures out in all that you do! It is the same for us and putting God in the center of all that you do is wonderful!

    Thanks again! God bless!