Business at Home

Working When and Where You Please!

April 11 1994
Business at Home

Working When and Where You Please!

April 11 1994

Working When and Where You Please!

Business at Home

Sitting on the dock of the bay, with your notebook computer nestled in your lap... Hit the slopes, the fairways or the open seas as the sun blazes down on you..., but as dusk falls, you’re settled in the chalet, the cottage or the boat’s cozy cabin with your notebook computer by your side...

“Portability is very important,” says Barbara Hagge, general manager, operations, ATS Hagge & Associates, Inc., Scarborough, Ont., a consulting, software, training, development and technical support firm. "If you want to mix your work and leisure time, it lets you do that, but it also wins the customers’ confidence and enhances your professional image. The client sees the changes on the spot thanks to your notebook and you save time, because you’re not running between your office and the client.”

To maximize work and play time, combine them with the help of portable equipment, for example a notebook computer, portable printer, copier and even fax machine. A notebook can do everything a desktop PC can do. But the smaller, lightweight printers, copiers and fax machines can’t handle the volume that the larger machines do and print quality may not be comparable. Nevertheless, their portability is their most valued asset.

There's no doubt the portable computer is becoming as widely coveted if not as common as the cellular phone. But, not everyone can afford both types of computers when starting out, which may raise the question, “notebook or desktop?!”

It's Your Money!

As a home-based business, every penny spent or earned is one of your own, so watch your finances closely.

Those who manage their personal finances well have an advantage, but to set up a home-based business and a budget as well as understand the tax implications, anyone will benefit from an accountant's expertise.

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"An accountant is an investment, because it saves you money in the future," says Miles Sweeney, a partner with Sweeney & Carter, Dartmouth, N.S., accountants specializing in small and medium-sized businesses.

To find an accountant, ask friends and business associates to recommend ones who have small business experience. Word-of-mouth and referrals are ideal, but always check references and be sure the accountants are familiar with small business specifically.

Depending on the size of your business and the volume of the transactions, further investment in a personal computer and basic accounting and word processing software might be well-advised. This technology facilitates regular updates, reduces the chance of error and helps you monitor your finances monthly.

"Quarterly reporting just doesn't cut it," says Sweeney. "More frequent tracking gives you the opportunity to foresee problems and prevent them, which is better than having to solve them afterward."

You can't over-manage your finances. Knowing where your money is and where it should be will only help you. To manage your cash flow, you must learn to anticipate expenses and revenues. It will also help you build a realistic budget. Regularly comparing the actual figures with the numbers budgeted will help identify problem areas and allow you to make adjustments as necessary.

Initially, entrepreneurs used to working for others, may be somewhat casual with company funds. While separate business and personal bank accounts are highly recommended to simplify accounting and satisfy Revenue Canada, this only exacerbates such an attitude - but, not for long.

"They soon realize that directly or indirectly, it all comes out of their pockets," says Sweeney.

If the funds leaving their pockets are expenses incurred to earn income in their businesses, these legitimate business expenses should be deducted. These can include everything from utilities, to stationery, rent or mortgage interest, insurance, maintenance, cleaning, travel, postage, couriers, car payments, gas and training. Office equipment is deductible, but must be capitalized and depreciated. Familiarize yourself with the limitations on deductions.

"Take a bullish attitude toward deductions - if you're being timorous and conservative, you're probably giving away money that you could be keeping," says Douglas Gray, Vancouver, B.C., author of Home Inc.: The Canadian Home-Based Business Guide and The Complete Canadian Small Business Guide. "Truly maximizing tax deductions can mean cozying up to the fine line."

But, don't incur expenses just to get deductions, or pay more for a product or service, because you plan to claim it, says Sweeney. Remember, those expenses directly affect your net income.

Give yourself 30 or more days of credit, by paying with your credit card or opening an account with suppliers. While warehouse retailers are generally cheaper, the smaller retailers may provide valuable expertise and service. Consider networking with other Miles home-based businesses to purchase, pro-

Sweeney, partduce and market more efficiently and ner with cost-effectively.

Sweeney & Keeping your costs low and managing

Carter your finances will put more money in

your pocket!

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$200 to $300 premium may be worthwhile. In addition, Kevin Leach, owner, Trump Systems, Inc., Bolton, Ont., a value-added reseller of computer products, says monochrome monitors are rare today.

If your work is arts, graphics and designed-related, Hagge recommends the Macintosh environment, but if you’re writing reports and crunching numbers, you may be more comfortable with the IBM environment.

“Four years ago, it was hard to find accounting software for Macs," says Hagge. “Today, most software is released in Mac and IBM versions, but with the more unique software, double-check availability before committing to either environment.”

When choosing between a name-brand and a clone, remember that your business may grind to a halt without the PC. Although, a clone may be very reliable, a clone’s parts may not be consistent in terms of quality and durability, cautions Leach.

As the price difference between brand name PCs and clones continues to shrink, Hagge, Leach and Terry O’Brien, president, of Toronto’s Merlyn Associates, computer system integrators, strongly recommend buyers spend that little bit extra on name brands. If reliability and durability really matter to you, look for recognized names, like Toshiba, Apple,

IBM, Compaq, Sharp, Texas Instrument and NEC.

“Maybe it’s my own personal bias, but for the durability, warranty and service, I'd say go with a name brand,” says Leach.

On the same note, pay attention to the warranty. It’s a legitimate part of the sales pitch and should be carefully considered. One-year warranties are average, while three-year warranties are found only on the best equipment. Warranties may include a toll-free phone line that offers 24-hour technical support. Most warranties can be extended for five to 10 per cent of the purchase price.

“If your unit got a defective card or chip at the factory, you’ll need service immediately," says Hagge. “Warranties protect you, because with services centres charging $60 per hour and up, just locating the source of the problem may cost several hundred dollars.”

Finally, computer technology is augmented every three to six months. By the time you install your equipment and learn to use it, more sophisticated, less costly technology will have hit the market. Most users outgrow their current technology every three years, but the equipment should at least last five years.

“If it still meets your needs and you got a good price at the time, live with it,” says Hagge.

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PROFILE Stratec Communications Inc., Hudson, Que.

The best of the notebook and desktop worlds can be married, if you insist on flexibility that allows you to work when and where you choose.

If you work on paper away from the office, then transfer the data to the PC back at the home office, a notebook will eliminate duplicated efforts, says Kevin Leach, owner, Trump Systems, Inc., Bolton, Ont., a value-added reseller of computer products.

A notebook costs more than the equivalent desktop, but if you can use the notebook, it will pay for itself, says Leach. A brand name notebook with a 486 SX processor, 200 megabyte hard drive, with four megabytes of RAM and a colour screen costs about $3,225. The equivalent desktop is about $1,700. An equivalent notebook with a monochrome monitor is about $2,000. While significantly more expensive on a notebook, the color screen may be essential for those in graphics and design.

Although the notebook is portable and convenient, its smaller screen and keyboard may be tiring and uncomfortable if used for lengthy periods. For graphics and design work, the smaller screen can be limiting. Finally, the smaller keyboards may increase typing errors, particularly for those with larger hands and thicker fingers.

But, the comfort of a desktop is possible with a notebook. If mobility is a vital requirement, buy a notebook and a full-size monitor and keyboard to plug into it for home use. The keyboard should be $50 to $100 and a full-color monitor is about $340.

Power is rarely a concern as users generally have access to power outlets and notebook batteries now last up to six hours, with some operating for 11 hours.

If you are sure you will use a notebook, whether it’s at the cottage, on the boat, in your own backyard or even at a client’s, really enjoy your new-found flexibility! ■

An office outside the home can be a far less distracting work environment, but Brigitte Bryant, president, Stratec Communications Inc., insists on the flexibility her homebased business provides.

"I want to do more than work," she explains, after spending the morning at her Spanish class.

Although Brigitte has a private office with a door, she says it's easy to be lured to the kitchen or outside for a walk. But, she plans to remain in her home office for now.

"A commercial space increases your business profile, but it also increases your overhead," says Bryant, whose commercial space for her previous business, French with Flair, cost her an extra $ 1,000 monthly with services. "The home office is the ideal solution. It's most cost effective and allows me the freedom to travel and do other things."

Home-based since 1991, Stratec grew from Bryant's Ontario firm, French with Flair, and provides English/French translation as well as training, publications and research in economic development. She and her husband, Chris, moved to Hudson, Quebec, so that he could teach geography and economic development at the nearby Université de Montréal. Naturally, Chris leads Stratec's economic development seminars and together, the Bryants are collaborating with other authors to translate, produce and publish the Good Idea Series (La Serie Bonnes Idées pour le Développement Communautaire Durable). Targeting communities that wish to develop and enhance their economic base, the first 63-page volume was published last year and the next five volumes will be printed in 1994. Promoted to economic and community development agencies in communities across Canada through professional networks, the next books will be heavily marketed internationally as well.

As the volume of translation fluctuates, Brigitte hires freelance translators, when no amount of evening and weekend work can meet clients' needs. She admits she finds the fluctuating income and varying demands on her time frustrating, but says her husband's salary provides the necessary security.

"You have to learn to balance your time and money," says Brigitte. "When I'm working very long hours, I know that there will be a period when I am less busy."

Balance is also the key word, when it comes to sharing the company's desktop and laptop computers with her 21-year-old son, Anthony, who she describes as a "computer buff" and who manages the company's computer system. A laser printer, fax and answering machines and a modem, help keep administrative and production costs low. Although the Bryants live just a five-minute drive from the nearest copy shop, Brigitte says not having the necessary equipment at the home would "complicate things immensely" and be highly inefficient.

Although the couple regularly work evenings and weekends, you can be sure they will make time to return to France and some day, see Spain again.