Simple home base business start-up strategies (part 1)
Two of the most important questions to ask when starting a home based business are: "What legal form should my home based business take?" and "What economic model should it adopt?". It is unfortunate that most aspiring home based entrepreneurs fail to start-up their businesses as they can't overcome these stumbling blocks. As always, most would-be entrepreneurs would look at successful businesses around them for inspiration. But corporate giants like Land and General, Renong and Hicom would only reinforce the message that "Doing Business Is Not For The Faint-Hearted (So Why Don't You Just Be A Good Boy And Earn A Salary Like Everyone Else)". For that matter, even the provision shop near my house looks like a formidable start-up! Hopefully, this article would show you how easy it actually is to start-up your home based business.
    What is meant by the legal form of business is: should it be a Sole Proprietorship, Partnership or Limited company?
    The best way to start-up a part-time home-based business is to register a trade name with the Registrar of Business (ROB). The name should reflect the business you are doing like "Acme Cleaning Services". By having an ROB certificate you can open a bank account under your trade name. To avail yourself to certain business opportunities, you are also required to produce the ROB certificate. Some newspapers like the Sun also requires that you produce the ROB certificate before you can place any kind of advertisement. If you are in Kuala Lumpur, you can go to the 10^th Floor of the Putra Place (The Mall) at Jalan Putra to register your business. Expect to pay RM50 as a registration fee and RM25 as renewal fee every year. Approval is usually only a formality and normally no first-time business registration application is rejected.
    Forming a partnership is similar to the above but expect to pay an additional RM4 for every extra partner registered. It is also wise for the partners to have a partnership agreement to avoid any conflicts later.
    Another alternative to this is to form an incorporated company (Sdn. Bhd.). This is more costly since the fee is higher and there are more formalities. Off-the-shelve companies can be bought for RM2,000, which is still very expensive. Further, to comply with regulations, you have to have to pay a company secretary to manage your filings and returns and auditor to audit your accounts. Unless you expect to incur huge debts in your business, you should avoid incorporating your company at start-up phase.
    Before I examine the various home based business economic models, maybe an examination into the overview of the home based business concept is required.
    I define a home based business as being a business activity where the entrepreneur running the business is based at home and where a permanent business premise outside the home of the entrepreneur is not required. When I talk about being home based, it does not mean that the entrepreneur is cooped up at home, isolated from the outside world like the character Sandra Bullock portrayed in the movie "The Net". It means that the groundwork or preparation for the services and products that the home based business provides is done at home along with the administration and some marketing efforts. In most cases the performance of the services are provided elsewhere, For example, a trainer might do all his research and prepare his training materials at home but present his seminar at the client's office or at a hotel. Even the multi-level marketer has to present her opportunities at her prospect's home.
    But some home based services and products can be provided exclusively from home. These include mail order businesses, desk-top publishing, secretarial services and web marketing. There are others which are a mix of both especially those which allow their clients or customers to come to the home. Some beauticians work on their clients in their homes or go out to see their clients. A top-end example of this is Bill Clinton who does most of his work in his Oval Office at home and goes out to perform most of his stately duties.
    Based on the above, it is also not wrong to say that almost all businesses can be operated at home although major modifications have to be made to accommodate the business at home. Look at the table below to see how the conventional business in the left column can be converted into a home based business in the right column.