A guide to creating a home office.

If you are thinking of starting a small business, either full- or part-time, if you start from home, here are some guidelines to assist you

The statistics speak for themselves; 23% of Canadian households include a member who works from home either full- or part-time. Corporate down-sizing

* Identify your product or service. In other words, what's the primary focus of your company?

* Decide on a name and register it. Not only will this protect the name, but also provide you with a registration form you can take to the bank and open a current business account.

* Write a business plan. Look at your market niche, expertise, projected revenue for six months, start-up costs, overhead, cash flow projections, competition and projected net revenue.

* Set your price. Are your rates/prices reasonable and competitive? Can you make a profit on what you charge?

* Set up an accounting system. While bookkeeping may be a simple task at first, this procedure will become more complex as your company grows. A sound financial system at the beginning will limit your headaches later.

* Set up a tax file. You'll be glad you did when your first year-end rolls around. Keep all expenses and receipts in this file. If you're ever audited, a neat, organized system will ease the pain.

* Open a tax account. There's nothing worse than surprises, especially if your company does well in its first year. Ensure that you put a portion of each cheque into your tax account every time an invoice is paid.

* Talk to people. The best people to give you feedback on the merits of a home-based business are those who have been doing it for years.

* Apply for a business credit card. This card should be used exclusively for your business. Airline flights, hotel accommodations, entertainment, gasoline and other business products or services should be paid for with a card.

* Establish ties with an accountant and a lawyer. Get several references and then find out what they charge.

* Where will you work? Your location - be it a spare bedroom, studio over the garage or basement - could spell the success or failure of your business, so think about it carefully. You should locate your office as far away from family life as possible. There's nothing more unprofessional than having a dog bark or child cry in the background when you're on the phone trying to sell your product or service.

* Consider ergonomics. Make sure your environment is comfortable. The right office furniture, chair and lighting will determine how you feel about your business when you're having to put in 14-hour days. Your office furniture is more important than any other furniture in the house. After all, you'll spend more time in your office than anywhere else. If you can't afford new furniture, consider leasing it.

* Invest in office equipment. A fax machine and photocopier could save you time and money in a matter of months. You'll be surprised at how little these essential items cost and you can lease them.

* Consider a computer. Prices have dropped substantially and software programs are easier to use than ever. Be sure to sit down and analyze your requirements before you make a decision.

* Get a dedicated business telephone line. Once you've got a second line, apply for a phone company calling card. You'll find it convenient when you are away on business.

* Make sure calls are answered. When you're out of the office, you'll need an answering machine, message service or voice mail. There are pros and cons to teach, so ask friends and associates.

* Consider a dedicated fax line. Analyze whether or not your business warrants one. It would free up telephone time and let you make more sales calls or consult with clients while orders are being faxed.

* Start reading. The more information you have, the greater your chance of your success.

* Promote yourself. Attend conferences, join your local board of trade or chamber of commerce, exchange business cards and let people know you're out there. Corporate responsibility now rests firmly on your shoulders!

Elizabeth Harris is the publisher of Head Office at Home, a national magazine for home-based businesses and entrepreneurs.