Winnipeg Free Press - PRINT EDITION

Mind your own business

Self-employed workers can make it work from home

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LOUISE MACHINSKI doesn’t just have to rise at 4:30 in the morning every day, she also has to shine for her guests, hungry for a hearty meal of bacon, eggs, toast and coffee by 5:15 a.m.

Serving up breakfast for six American hunters and fishermen sitting at the dining room table before daybreak may not seem like the ideal vocation for most people, but for Machinski, it's her dream job.

"After 35 years of working at Canada Safeway, working under four people ahead of me, I love being my own boss," says the owner of the Bridgeview Bed and Breakfast near Selkirk.

She started the home-based business four years ago to help pad her income when she retired.

But business flourished beyond expectations, and she made a leap of entrepreneurial faith and left her full-time position with the grocer to focus solely on her business.

"At $75 a night for two people, you don't make that much," she says. "It's a lot of hard work. You spend a lot of time with the guests, but I love meeting people and hearing stories."

Machinski is one of thousands of home-based entrepreneurs in Manitoba, and their numbers are growing, says Tony Romeo, director of the Small Business Development Centre, part of Manitoba Competiveness, Training and Trade.

"It's been a steady increase in the last year. What we're finding is people are exiting the workforce for whatever reason. Many are a little bit older and they look at entrepreneurship as an option," says Romeo. "About 25 to 30 per cent of people attending our workshops to start a business are intending to start a home-based business."

Although their reasons vary, many have been laid off or chosen early retirement and are looking to parlay their skills into successful self-employment, he says.

And their homes are often the ideal launching pad.

"There are a lot of advantages to starting a home-based business," he says.

For one, the business risk is minimal.

"When you actually start operating your business, you are able to maintain low overhead," he says. "You need less startup capital than if you start out with a storefront where you're going to need improvements and everything else."

Home-based entrepreneurs do not have to worry about expenses for rent, business taxes and additional bills for utilities like they would if they started out at commercial location.

But some cash is required -- even if the business requires nothing but a desk and a phone.

"You still have to pay the occupancy permit, but the business tax is gone," Romeo says about the one-time zoning fee with the city. "The cost of the (permit) depends on the type of business, whether it's major or minor."

The occupancy permit ensures the home is zoned for a specific business activity, and it's not always as straightforward as you'd think, says Kathleen Waters, president of LawPro, a Toronto-based firm providing title insurance for home businesses.

"Virtually all built-up urban areas in Canada have municipal zoning bylaws that control what you do with your land," says Waters, a real estate lawyer. "So the very first step you might want to have in mind is having a real estate lawyer look at the zoning bylaws that pertain to your specific property."

In some cases, businesses that may cause additional traffic or noise will have to prove to the city zoning department that neighbours do not object.

"If you were living in the middle of Linden Woods and your business put you in conflict with the rest of your neighbours, that's a problem," says Shirley Tillett, chairwoman of the Manitoba Home Business Advisory Council.

For the freshly laid-off individual with limited capital, paying a lawyer isn't always an option. Fortunately, Tillett says a number of free programs are available to entrepreneurs to help them get the information they require without becoming ensnared in red tape and wasting money along the way.

Obviously, the first step in the process is coming up with a business idea. But even if you don't have one, you can research a potential business at one of the largest business libraries in Canada at the Canada/Manitoba Business Service Centre (CMBSC), jointly funded and run by Western Economic Diversification on the federal government's side and the Small Business Development Branch on the provincial side.

Romeo says entrepreneurs can also take advantage of a guest adviser program whereby they can meet a lawyer, accountant, business adviser or banker once a week at no cost.

The CMBSC will also help entrepreneurs shore up sources of funding for startups.

"We have a Business Start Program that helps startups get up to $30,000," Romeo says.

"A chartered bank does the loan -- a prime plus one per cent interest with no payments the first year -- and we guarantee it."

People still collecting employment insurance can also enrol in the government-sponsored Self Employment Program offered in Winnipeg by both Meyers Norris Penny and the YM/YWCA, Tillett says.

"You're counselled, you're coached, and then for the balance of the year as you continue to draw EI you can go out there and seek clients and generate revenue," she says. "What's nice about that is the revenue you earn during that year while on EI is non-taxable."

Tillett adds she used the program herself when she launched her consulting business 14 years ago, even though she had several years of experience in management from her previous job.

"One thing I will always say is make sure you get some training," she says, adding most programs are free of charge. "Don't just go into it thinking that you can run a business."

But even with all this assistance, a successful home-based entrepreneur needs one key ingredient, she says.

"You really have to have passion in order to be successful."

Those who are able to combine that moxie with the know-how will soon realize the Home Business Advisory Council's motto "There's no place like home to do business" holds a certain air of authenticity to it.

"I decide who I work with, who I employ, when I work and the kind of work I want to take on," Tillett says. "That's the best thing about having a home business -- you are in control of your own destiny."

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Home-based dos and don'ts:

Do seek out information and guidance from a number of government-sponsored business centres around the province, namely the Canada/Manitoba Business Service Centres (CMBSC). The main centre is located at 240 Graham Ave. downtown, but several other offices are conveniently located around Winnipeg and the rest of the province, including Morden, Churchill, Dauphin, Selkirk and Headingley. The centre is jointly run and funded by the federal government and the provincial government's Small Business Development Branch, part of Manitoba Competitiveness, Training and Trade.

Do join the Manitoba Home Business Advisory Council. The organization was set up by the CMBSC in 2003 to provide advice for the growing number of home-based businesses in Manitoba. Membership is $50 a year. Besides being able to attend a spring workshop and fall convention, members also get to meet other home-based business owners and learn of untapped sources of funding and low-cost tricks of the trade, such as innovative guerrilla marketing techniques.

Do get a Home Occupancy Permit, which costs about $160 for the desk-and-phone type of business. To find out what type of permit and licensing you'll need for your business, you can use an online program called BizPal, available on the City of Winnipeg's and CMBSC's websites. "Adhere to all regulations," says Shirley Tillett, chairwoman of the Manitoba Home Business Advisory Council, "because if you don't it will come back to bite you."

Do create a specific office space for yourself in the home. Not only does this provide you with a separation of home life and work, you also need to provide the city zoning department with a floor plan of your office in your home. In addition, it makes it easier for you to deduct business expenses on your tax return. You can deduct a portion of your home costs -- like gas and hydro -- as business expenses based on the percentage of floor space your office takes up in your home. "If your house is 1,000 square feet and 200 square feet of it is office, then one-fifth of all your related home expenses is a writeoff," Tillett says. Consult with a tax expert to find out what expenses are deductible.

Don't ignore your clients. Answer all emails and phone calls as soon as possible, or you'll lose your clients quickly -- even when your workday is supposed to be over, Tillett says.

Don't use your home phone line as both your business and personal line. At the very least, be sure clients cannot hear "kids playing or a dog barking in the background" on your voice-mail message, she says.

Don't go it alone. That's a recipe for burning through your financial resources while making unneeded mistakes. While many home-based entrepreneurs develop low-cost or no-cost strategies for marketing, accounting and other aspects of their business, they can save time by learning from those who have already been there, done that. "It's like do as I say and not as I do when I go out to give these seminars," Tillett says.

Don't start a home-based business if you think it will help you spend more time with your family. "If someone's starting a business and juggling a family too, it can be less stress to have the business based out of the home," says Tony Romeo at the Small Business Development Branch. "But it can also be a disadvantage as well because home life can be a distraction for the business." Not to mention, without a real physical barrier between home and work, job stress can be omnipresent.

Republished from the Winnipeg Free Press print edition November 7, 2009 B14

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