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A Home-Based Business Online
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Practical home business ideas, opportunities
and solutions for the work-from-home
entrepreneur
Issue 166 : January 6, 2003
Sent to 15,001 Opt-In Subscribers
Editor: Elena Fawkner
Publisher: Fawkner Publishing
http://www.ahbbo.com
Contact By Email
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This Week's Sponsor
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IN THIS ISSUE
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1. Welcome and Update from Elena
2. Home Business Idea of the Week
3. Feature Article - Are YOU Leaving Money on the Table?
4. Surveys and Trends
5. Success Quote of the Week
6. Advertise with AHBBO
7. Subscription Management
8. Caveat Emptor
9. Contact Information
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1. Welcome from Elena
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Hello again and a warm welcome to all the new subscribers
who have joined us since the last issue.
I know the last thing you want to think about so early in
a shiny, brand-new year is taxes. However, the tax year
has just ended (here in the U.S., at least), and before too
much longer we'll be facing that April 30 deadline. I for one
am NOT going to do what I did last year and leave it until
the week before the filing date to get around to my taxes.
Learned THAT lesson the hard way! For those of you
new to home-based or online business, tax time may
in fact be a bit more pleasant this year, even if you're
yet to earn a dime from your business. This week's
article, "Are YOU Leaving Money on the Table" shows you
where to find some deductions you may not have even
thought you could claim. It's at segment 3.
Having been taken to task for announcing the annual AHBBO
2-for-1 advertising sale while half the population was still on
vacation, I'm extending it for another two weeks. From now
until midnight (PST) January 19, 2003, whatever advertising
you order you get the same again, absolutely free, no limits.
This is your chance to get your 2003 advertising campaign off
to a flying start, so don't miss out. Full details at segment 6.
As always, thanks for reading and I hope you enjoy this
week's issue.
Remember, AHBBO is for YOU! If you have comments or
suggestions for topics you would like to see addressed, or
would just like to share your experiences with other
subscribers, I want to hear from you. Please send
comments, questions and stories to Contact By Email .
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COULD THIS BE THE ANSWER YOU'VE BEEN LOOKING FOR?
Imagine that you dream up the perfect business opportunity to
become involved in. Would it look anything like this?
A. Not over saturated. B. Saves other people money, while
making you money. C. Your customers do the selling for you.
D. Partnership with $2 Billion Company. E. Duplicatable.
Interested? Visit http://www.vartectel.com/biz, or call
(800) 224-1371.
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2. Home Business Idea of the Week - Assembling Products
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There's always money to be made from one's crafts and hobbies,
even if it doesn't seem so at first glance. There are small-scale
manufacturing opportunities available to even unskilled workers
that can be expanded over time. If you're willing to learn some
basic crafts, you can turn those skills into a home-based
business.
First, consider your hobbies, or the crafts in which you're involved.
Perhaps you enjoy making stuffed animals that children love. Or
you enjoy throwing pottery or firing ceramics. Needlework, sewing,
embroidery, knitting, jewelry making and tailoring may be among
your talents that you can turn into extra income.
Perhaps you're a good carpenter, and you can turn to high-quality
cabinet making or furniture making. Maybe you can see a need for
furniture repair in your area. Or perhaps you're excellent at
crafting doll houses and miniature figures for which you can
charge premium prices.
You've seen all the good ideas that can be turned to your
advantage with a bit of effort. You can make reindeers from
firewood and tree branches, and sell at swap meets before the
holiday season. Perhaps you're a computer programmer with some
good ideas that will sell as shareware.
All the good ideas in the world won't do a bit of good unless you
find customers for them. If you don't think of yourself as a natural
in sales, rest assured that you can learn effective selling skills.
You may decide to sell in one or several different ways. Perhaps
you want to start your own shop. Maybe your products are well
suited to swap meet sales. You can sell the items to stores at a
wholesale price. You can retail them yourself by advertising them
locally or nationally.
If it's a small item, easy to produce, you may want to take the
approach of giving it away and charge only for shipping and
handling. Advertise the giveaway in such national publications
as The National Enquirer, which can generate thousands of sales.
Or you can put your goods in stores on consignment, meaning
that when they sell the items, you collect your money.
Gaining the self-confidence that your craftwork is unique and
high quality will help you to pursue more opportunities. You'll
find that virtually by accident you've learned the skills end of
the craftwork. Now all you have to do is to hone your business
skills, and you're on your way.
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This is just one of over 130 ideas from the new "Practical Home
Business Ideas From AHBBO" e-book. Find out more at
http://www.ahbbo.com/ideasbook.html .
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THE AMAZING FORMULA THAT SELLS PRODUCTS LIKE CRAZY!
FIND OUT HOW AT:
http://www.amazingformula.com/cgi-bin/t.cgi/219426
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3. Feature Article: Are YOU Leaving Money on the Table?
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© 2003 Elena Fawkner
For those of us in the U.S., tax time is almost here again. For
those of you elsewhere, tax time is always around the corner.
Oh joy, I hear you say. Well, if you're contemplating an online
home-based business, it may be just that. Really. Here's
how.
Are you ready to start earning money with, say, affiliate
programs or by creating your own information product, but
haven't really got off the ground yet because you're stuck
in the stage of thinking you have to learn everything there
is to learn about internet marketing before you can start?
(Which you don't, but that's a whole other article.) How
much money have you spent on e-books and other
information products in your quest for the holy grail? How
much money are you spending on your ISP every month?
How much money have you spent on what appeared to
be promising online business programs only to see them bite
the dust? And what about ALL that software you've bought
but never used?
Well, even if you haven't made a dime yet, if you have a
genuine profit motive, start thinking outside the paradigm
of the *would-be* online business owner and start thinking
from the perspective of one who is *already* in business.
What does that have to do with tax? Everything.
If you have a genuine profit motive for what you're doing,
then you're in business. If you're in business, you can
deduct business-related expenses against business and, if
you're a sole proprietor, personal, income. Including ISP
fees, including information products, including "secret marketing
site" membership fees. All of it.
See where I'm going with this?
Even fees for what turn out to be bogus programs can be
deducted if you incurred them in pursuit of business profit.
And while we're on the subject of being hoodwinked, let's
just get that one out of the way right here. We're ALL
suckered into falling for at *least* one - it's called the
school of hard knocks - so don't dud yourself out of a
righteous deduction just because you're feeling ever so
slightly foolish for having been suckered, against your
usually MUCH better judgment, into believing that what
sounded too good to be true wasn't. Even though it was.
Repeat after me - a deduction is a deduction is a deduction.
All that's required is that you incurred the expense with the
motive to make a profit.
Now, a word of caution here. You can't deduct expenses
incurred in pursuit of illegal activities so I wouldn't try and
claim an investment in a pyramid or ponzi scheme on your
tax return. But if all you did was fall for a sales pitch for a
program that, if successful, would not have been illegal,
and it was a business-related expense, go for it. So long as
you had a genuine profit motive when you handed over the
dough.
It gets even better. (By the way, this is all U.S. stuff we're
talking here. Check your local tax laws. Many countries will
have something similar to what I'm about to talk about.)
Here's where it gets interesting. If you work your business
out of your home, in a room or a part of a room that you use
*exclusively* and *regularly* for your business AND that area
is also your principal place of business, you may qualify for the
home office deduction. Even if you also work at a job outside
the home.
And when I say "exclusively" I MEAN exclusively - no children
using your computer for their homework or to play computer
games, no personal papers in your work desk, no late-night
chatrooms, no television in the room.
You may not be able to apply the home-office deduction
against *this* year's income (as we'll see in a minute) but you
will be able to apply it against profits generated in future
years.
So, why all the emphasis on "genuine profit motive"? The
movement towards easily-started online businesses has
sprouted an industry of so-called tax experts who would
have you believe that anyone can reap the benefits of home
business tax breaks simply by starting a "home based
business". They basically try and convince you that
anyone can pretend to be running a home-based business
and thus qualify. Not so. You need to be running a real
business, not engaging in a hobby or a sham. What
distinguishes a real business from a mere hobby? You
guessed it - a profit motive.
Believe me when I tell you, if you're planning on taking
business deductions, you'd better be able to prove to the
IRS that you have a genuine profit motive. How do you do
that? By keeping proper books and records. By keeping
business and personal expenses separate. By keeping business
and personal income separate. By running a genuine business,
in other words.
Here's how it works.
Let's say you have a spare room in your house that you
use exclusively as a home office. Over the past 12 months,
you've bought a computer, desk, chair, printer and fax
machine. You've decided that you want to start a home-
based online business on the side while you continue to work
in your job. You spend several hours a day researching
ideas for your new business and you spend a small fortune
on your high-speed internet connection, and various
information products relevant to your area of interest.
Because you're running a business, one of the first things
you're going to want to do is get a system for your business
records set up.
Keep a record of all expenses as they're incurred so that
when tax time comes around, everything is at your
fingertips. I use Excel spreadsheets for this - one
spreadsheet for every expense category. Here are the
categories I use (use whatever categories make sense for
your business though):
Advertising and promotion
Software*
Web Hosting and Domain Name Registration Fees
ISP/Cable Modem Fees
Office Expenses
Content Subscription Fees
Telephone***
Bank Charges
Books and Magazines
Equipment**
Furniture**
Bad Debts
Home Office Deduction
* Usually has to be depreciated over several years unless
it's software that needs to be updated frequently such as
anti-virus software.
** You can either depreciate these items over time or you
can write off 100% during the year of acquisition up to a
maximum of around $20,000.
*** If you only have one phone, you'll need to apportion
expenses between personal and business. On the other
hand, if you have a second line exclusively for your business,
you can write off 100% of expenses for the second line.
Every time I pay a business expense, I enter the details
in the appropriate spreadsheet. Very easy.
Then, when the time comes to file your tax return, you
just need to prepare a Schedule C (for individual taxpayers).
If your business makes a loss (i.e., the expenses you
pay out are more than the revenue you bring in from your
business), that loss is deducted from your income from all
sources, thereby reducing your taxes.
But, best of all, if you qualify for the home office deduction,
you can take a proportionate share of your mortgage or rent
payments and your utilities and apply them as a deduction
against your business profits, but only to the point where the
profit from your business equals zero. In other words, the
home office deduction cannot be used to create a loss
situation. But even if you can't deduct it this year (because
your business has already made a loss), it's not lost. You
can carry it forward to future years to be applied against
future profits.
So, as you can see, even if you're only in the information-
gathering/learning stage of your business, if you have a
profit motive you're nonetheless in business and you can
and should be writing off your business expenses even if
you're yet to start generating revenues.
Make sure you keep proper records and substantiate all
expenses though. The IRS is, of course, well aware of the
potential for abuse of home business tax deductions and
will be paying close attention. That's fine though. If you
have a profit motive, you ARE running a business and
you're *entitled* to take any legitimate deductions that
are available to you. To do anything less is to leave money
on the table.
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** Reprinting of this article is welcome! **
This article may be freely reproduced provided that: (1) you
include the following resource box; and (2) you only mail to
a 100% opt-in list.
Here's the resource box to use if reprinting this article:
------
Elena Fawkner is editor of A Home-Based Business Online ...
practical business ideas, opportunities and solutions for the
work-from-home entrepreneur.
http://www.ahbbo.com
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4. Surveys and Trends
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© 2002 Ryanna's Hope
The following is an extract from the current issue of Larry
Wack's excellent weekly, "Surveys and Trends". Subscribe
using the link below for the full issue.
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HOW TO KILL AN ONLINE BUSINESS
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E-buyers are unhappy with online service and are abandoning
their transactions as a result.
In a recent survey conducted by Critical Research, 93 percent
of business users say they regularly encounter problems with
online assistance. Current methods of online support only
resolve situations roughly 36 percent of the time, according to
researchers.
The survey of 200 U.S. online businesses found that 95
percent of users ditched Web sites and abandoned transactions
when problems arose. The most common trouble spots included:
Signing up for a particular service (85 percent);
Researching a company's product (81 percent); and
Executing transactions (75 percent).
Of the minority that actually find their Web-integrated help desk
experiences satisfactory, 15 percent said they found help
through e-mail, 22 percent dialed a voice line and 32 percent
used Web chat or instant messaging.
Buyers also are frustrated with amount of time online help
desks take to answer a question or solve a problem, according
to the study. Almost all of the survey respondents (90 percent)
say responses to queries are unacceptably slow, and 81
percent complain that they receive inaccurate information when
they finally receive a response.
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CUSTOMER INQUIRIES AND TIME LAG....
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According to recent data from Jupiter Research, many companies
fail to acknowledge receipt of customer email inquiries or if
they do, fail to respond in a timely manner.
Over 90 percent of the companies surveyed by the research firm
said that they provided an email channel for customer inquiries.
However, only 34 percent of companies acknowledged receipt of
such emails, according to the study.
Of those companies that do acknowledge customer inquiries,
almost half use the response to direct customers to other
channels.
Around 52 percent of initial responses are answered within 24
hours, but only 32 percent provided a response within six hours,
while one-third of companies took three days or longer to get
back to customers.
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SUBSCRIPTION INFORMATION
Subscribe to "Surveys and Trends" with a blank email to:
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5. Success Quote of the Week
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Only one thing has to change for us to know happiness in our
lives: where we focus our attention.
-- Greg Anderson
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6. Advertise With AHBBO
_______________________________________________________________
The annual AHBBO-subscriber-only 2-for-1 sale is now on.
From now until midnight (PST) Sunday, January 19,
whatever advertising you order, you get the same
again, absolutely free. No limits! To take advantage
of this order, just visit the AHBBO Advertising Page
at http://www.ahbbo.com/advertising.html, place your
order, and when you submit your ad copy, mention that
you are an AHBBO subscriber and want to accept the
2-for-1 offer. That's it. If you have any questions,
please email me at
Contact By Email?subject=241ad_query.
~*~*~*~*~*~*~*~*
Ezine (electronic magazine or newsletter) advertising is
the most cost-effective and targeted form of advertising
online today. This is because the ezine's editor has already
done the hard work of bringing together a large group of
readers highly motivated by the subject-matter of the
ezine itself.
Therefore, assuming you place your ad in an ezine with
a subject matter that fits with what it is you are
marketing, you can be confident of reaching a select
group of highly targeted prospects for your product or
service.
AHBBO offers four different advertising packages:
(1) top sponsor ad placements,
(2) single ad placements,
(3) ad paks (4 ads for the price of 3), and
(4) exclusive mailings.
To learn more about advertising in the AHBBO ezine,
visit http://www.ahbbo.com/advertising.html .
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7. Subscription Management
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8. Caveat Emptor
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Although all of the information presented in AHBBO is
published in good faith, I accept no responsibility as to the
accuracy or otherwise of the information presented. By making
use of the information contained in AHBBO the reader assumes
all risk that certain information may prove to be incorrect.
**I do not endorse any advertisements unless stated to the
contrary. Your money, your decision, your responsibility.**
All advertisements are accepted in good faith. However,
advertisers are solely responsible for the content and
accuracy of their classified advertisements and I give no
warranties, nor accept any responsibility, in relation to any
classified advertisement appearing in this publication. ALWAYS
carry out your own due diligence! Remember, if it sounds too
good to be true, it probably is.
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9. Contact Information
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Elena Fawkner, Editor
A Home-Based Business Online
Contact By Email
http://www.ahbbo.com
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All Rights Reserved