Homebased Startup Checklist

Burton looks at three things when choosing a business bank--convenience, services and cost--and says you may find online banking is more convenient than brick-and-mortar bank locations.

• Accounting software. There are a few different accounting software programs available, so explore your options before you invest your time and money. This investment will be worth it down the road when you show up at your paid-by-the-hour accountant or tax person's office with all your records neatly in hand, or when you need to instantly figure out where your finances are at this month. If you're looking into online banking, says Burton, you'll want to match your accounting system with that.

• Hiring an accountant. As with finding an attorney, you'll want to get some word-of-mouth recommendations and ask many questions when you look for an accountant. "Work with an accountant as early as possible," Burton recommends. "Then you may choose the set of services you need to supplement what you can do yourself." Burton also warns there's a difference between CPAs and accountants--the former can "provide pretty much anything you may need." Accountants may be more limited in the services they provide.

• Determining your startup financing needs. This is where your financial planning comes into play. You've already inventoried your assets. Now, are you short the money you need to start your business? If so, what are your financing options? Homebased businesses have a cheaper entry fee than traditional office and retail spaces, so you can probably borrow money from friends and family or (carefully!) use a credit card to fund your new business. You can also try to shorten the gap between what you have and what you need by cutting expenses. Doesn't your aunt have a desk she's not using? Can you barter your services to a designer for your new brochure? Get creative in your approach to saving money.

• Create a budget. Starting out with a budget is a powerful way to immediately take control of your finances. After all, would you rather control your cash flow or have your cash flow control you? A good measure for your first budget is at least one year. "This budget should be detailed and based upon sound data, not just wishful thinking," says Burton. "Most new businesses are overly optimistic about their revenue projections--both from the point of view of how quickly the revenue will start and the level of it. And they tend to underestimate expenses. Many new businesses start with much less capital than they'll need to make the business self-supporting."

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