New Economic Incentives Act

Puerto Rico, one of the fastest growing manufacturing locations worldwide, has approved a new economic and tax incentives program that will further improve the advantages of doing business on the Island . The Economic Incentives for the Development of Puerto Rico Act was recently enacted into law as Act No. 73 of May 28, 2008 and will substitute the current Tax Incentives Act of 1998.

Beginning on July 1st, 2008 this new tool allows for a wide array of tax incentives and credits that enable local and foreign companies to operate successfully in Puerto Rico enjoying the benefits of operating within a US jurisdiction, while taking advantage of a foreign tax structure.

Some of the provisions of the new law include:

• 4% fixed income tax rate
• Pioneer industries rate 0% or 1% income tax
• Combined floor of 3% for local business
• Credit of up to $5,000 per job created during the first year of operation, if the operation is located in the municipalities of Vieques and Culebra
• Up to 50% credit of qualified R & D expenses
• Credit for purchase of locally manufactured products
• Up to 10% credit of industrial energy consumption
• Special deductions for investment in structures, machinery and equipment
• Infrastructure incentives
• Statutory relief for personal and real property tax, as well as municipal excise tax
• Training incentives
• Competitive financing options

New Economic Incentives Act (English version - Spanish version)

Get Your Copy Write

Expert tips for writing great letters, ads, brochures and more without professional help

By Kim T. Gordon | June 30, 2008

URL: http://www.entrepreneur.com/marketing/marketingcolumnistkimtgordon/article195254.html

Do you consider yourself a great writer? If you're like most business owners, writing anything--from a brochure to a newspaper ad--probably isn't your strong suit. That's why "copywriting" is often left to professionals. But what happens when you need to create your own sales letter, online ad or marketing postcard without the help of a copywriter? Or suppose you're not flush with funds to hire outside help?

Here are some tricks of the trade to get you through basic wordsmithing. Put these five writing tips to work and watch your responses increase.

1. Write one-to-one.
   Even a magazine ad that reaches millions of readers is seen by only one person at a time. People read marketing copy as individuals, not as a group. One of the most common mistakes newbie writers make is to write as though they're presenting their "pitch" to a room full of prospects. Instead, imagine you're sitting at a table directly across from your best prospect, looking him in the eye and discussing how you'll meet his individual needs. To increase your marketing response rates, address your prospects on a personal level, as if you were having a one-on-one conversation.
   
2. Make your message "outer-directed."
   Unless you're writing a letter to your mother, never write all about yourself. It's a clear sign of an inexperienced copywriter when marketing materials such as sales letters, company brochures and direct mail are written predominantly about what "we offer," instead of what "you'll get." As you write your materials, make a practice of changing most of the sentences that use the words "our" and "we," to revolve around the words "you" and "your." Outer-directed language has much greater appeal. For example, you'd change "We provide on-call 24-hour service," to "You'll get reliable, on-call service 24 hours a day." See the difference?
   
   
3. Lead with benefits.
   Right now, consumers are so inundated by media that multitasking is the norm. It's commonplace for them to watch television, read a newspaper and go online all at the same time. Even the B2B marketing environment is extremely cluttered, with more ads fighting for attention in trade publications, a barrage of e-mail and other inbound communications. Every marketing communication with a prospect must grab interest immediately or be overlooked. Begin everything you write with a desirable benefit or a specific offer depending on the type of communication. What do your unique prospects want most that you can provide in a way that's unmatched by your competitors? Lead with that benefit in your headline or first paragraph, and use the body copy to detail the features that explain how you'll deliver the promised benefit.
   
4. Follow the rules of engagement.
   Engaging copy addresses the wants and needs of its targeted reader, viewer or listener. But it's not just what you say; it's how you say it. Use straightforward, down-to-earth language, and write in the vernacular of your target audience, including their use of any buzzwords. The best copywriting isn't flowery prose. It's direct and to the point, uses an active voice and often creates mental images using words. Professional copywriters rarely use a long word when a shorter one will do. Above all, great copy is persuasive--opening minds to new ways of looking at a company, product or service. And new information that's cleverly and clearly presented is the most engaging of all.
   
5. Provoke a reaction.
   Have you ever noticed that many marketing materials open with a question? Ads of all kinds, and direct-mail and sales letters in particular, use questions as headlines, opening sentences and throughout the body copy. Questions provoke answers, keeping prospects thinking and engaged with your message. Get the idea?

Often, good writing is entertaining, even funny. Just look at the brilliant use of humor in many television and radio spots. While humor is a common way to engage an audience, be sure to strike the appropriate tone for your target audience, the marketing medium you've chosen and subject matter, whether it's urgent, smart, confident, helpful, somber or funny.

Kim T. Gordon is the "Marketing" coach at Entrepreneur.com and a multifaceted marketing expert, speaker, author and media spokesperson. Over the past 26 years, she's helped millions of small-business owners increase their success through her company, National Marketing Federation Inc. Her latest book, Maximum Marketing, Minimum Dollars, is now available.

Top 7 Hiring Mistakes for Startups

Avoid these pitfalls and build a team of talented employees.

By Brad Sugars | June 30, 2008

URL: http://www.entrepreneur.com/startingabusiness/startupbasics/startupbasicscolumnistbradsugars/article195252.html

Building great teams is never easy.

A quick look at the sports world confirms this. Coaches come and go, players are free to seek new teams and owners are free to sign players who fit certain roles within the limits of payroll.

In business, it's equally difficult. Even established businesses suffer from hiring and team-building mistakes. Unlike a startup, however, those companies can afford to make a hiring mistake without significantly impacting their overall operations.

Unfortunately, startups don't have that cushion of profit to cover up a hiring mistake. That's especially true in a small company, where one person who is not the right fit could mean that 25 or up to 50 percent of your work force is now a big problem.

The good thing is there are some hard and fast hiring rules startups should follow. Most hiring issues occur as a result of looking to keep costs down or not having a clear vision about what the business is and where it's going.

However, my experience has shown me that cutting corners in the hiring process now can mean trouble for the business later. To avoid trouble, here are the top seven hiring mistakes many startups make:

1. Hiring someone just because you know them. This means friends, former co-workers, family members or your own children. For a husband, this means hiring your wife. For a wife, this means hiring your husband. Even part-time. There needs to be a certain sense of objectivity and accountability in the workplace. Friends and family expect to be treated to a different standard--and they should. Away from your business, but never in it.
   
2. Hiring someone to "help them out." Some owners have loads of empathy for workers on the rebound, or people in trouble. Being a "savior" to help someone may not help your business. Instead, hire someone who can add value to the company and its operations. Those are people who are eager and willing to go the extra mile. They also won't be in trouble or looking to take advantage of what always turns into a bad situation.
   
3. Taking someone on as a partner because you can't afford to hire him. Business can be hard enough as a sole proprietor, but don't think it's an advantage to bring on a partner, especially if you can't afford to hire him as an employee.
   
   If you do, you give up 50 percent of your company to someone who may or may not thrive in an entrepreneurial setting.
   
   An alternative is to outsource projects or work on a fee basis. Better yet, work out an arrangement at an advisory or coaching level. Then 100 percent of your company remains yours. Plus, it's easier to walk away if something goes wrong.
   
4. Hiring someone to do a bit of everything. A "jack of all trades" approach is fine--for the owner. But the specific functions of a business need to be staffed with people who are specialists.
   
   Instead of hiring one person to do the accounting and administrative work, think of this as two jobs for two different people.
   
   The reality is most people simply don't have the skills or expertise to do a variety of jobs. The key is to find people with skills that complement your own, and put those people in specific jobs with specific roles.
   
5. Top-down hiring vs. bottom-up hiring. This method of hiring also leads to getting people on the team who are generalists vs. someone who's the right fit for a single job.
   
   Hiring from the bottom up means filling specific roles with specific skill sets with people who will be doing jobs that are typically lower paying but take up large amounts of time. This frees you from having to do time-consuming tasks. It also gives people an opportunity to add value and expand their roles, which ultimately helps grow the company.
   
6. Not knowing what job you want to hire for. Just hiring for the sake of hiring, or hiring a generalist to bring some order to your internal chaos, is not a hiring strategy--it's just more chaos.
   
   Clearly define roles for any new hires. Not only will you avoid hiring a non-productive person in an ill-defined role, you'll start attracting people who'll add real value to their role and your operation.
   
7. Hiring for the job you hate. Earlier I said you should hire people with complementary skills. This doesn't mean you should hire someone to avoid doing what you may do best. In short, don't hire a bookkeeper when you know how to do the numbers--especially when your top line sales may be suffering.

In this case, you do the accounting and be on the lookout for a really great sales person. The growth in sales will fund the accounting position soon enough. But you won't get there having two people in-house skilled at crunching numbers.

Hiring is all about finding the right skills, personalities and attitudes to fit your overall vision and mission for your company. Having those two guideposts in place will make it easier to make good hires that will benefit your business in the long run.

Then you can own one of the few big businesses that doesn't make as many hiring blunders as your competition.

Brad Sugars is Entrepreneur.com's Startup Basics columnist and the writer of 14 business books including The Business Coach, Instant Cashflow, Successful Franchising and Billionaire in Training. He is the founder of ActionCOACH, a business coaching franchise.

What Marketing Is and Is Not

Knowing the difference is the first step in creating a successful campaign.

By Jay Conrad Levinson | July 07, 2008

URL: http://www.entrepreneur.com/marketing/guerillamarketing/article195328.html

Guerrillas know that marketing is just a fancy word for selling. It's more common sense and patience than anything else. It's a process and not an event.

Marketing is any contact that your business has with anyone who isn't a part of your business. Marketing is also the truth made fascinating. Unfortunately, often it's not the truth and it's anything but fascinating. Marketing is the art of getting people to change their minds.

Many business owners think marketing is a bunch of things that it isn't. Let's examine the silliest of them:

Marketing is not advertising. Don't think that because you're advertising, you're marketing. There are more than 200 forms of marketing. Advertising is one of them. If you're advertising, you're advertising. You're doing only one half of 1 percent of what you can do.

Marketing is not direct mail. Some companies think they can get all the
business they need with direct mail. Mail-order firms may be right about that. But most businesses need a plethora of other marketing weapons for their direct mail to succeed.

Marketing is not telemarketing. For business-to-business marketing, few
weapons succeed as well as telemarketing. Telemarketing response can be improved by augmenting it with advertising. But don't kid yourself. Marketing is not telemarketing alone.

Marketing is not brochures. Many companies rush to produce a brochure, then pat themselves on the back for the quality of the brochure. Is that brochure marketing? It's an important part when mixed with 10 or 15 other very important parts, but by itself? Forget it.

Marketing is not the phonebook. Many companies run a phonebook ad and figure that takes care of their marketing. In 5 percent of the cases, that's the truth. In the other 95 percent, it's a disaster of marketing ignorance.

Marketing is not show business. There's no business like show business, and that includes marketing. Think of marketing as sell business, as create-a-desire business, as motivation business. But don't think of yourself as being in the entertainment business, because marketing is not supposed to entertain.

Marketing is not a stage for humor. If you use humor in your marketing,
people will recall your funny joke, but not your compelling offer. If you use
humor, it will be funny the first and maybe the second time. After that, it will be grating and will get in the way of what makes marketing work--repetition.

Marketing is not an invitation to be clever. If you fall into the cleverness trap, it's because you don't realize that people remember the cleverest part of the marketing even though it's your offer they should remember. Cleverness is a marketing vampire, sucking attention away from your offer.

Marketing is not complicated. It becomes complicated for people who fail to grasp the simplicity of marketing, but marketing is user-friendly to guerrillas. They begin with a seven-sentence guerrilla marketing plan, then commit to that plan. Not too complicated.

Marketing is not a miracle worker. More money has been wasted by expecting miracles than by any other misconception of marketing. Marketing is the best investment you can make if you do it right, and doing it right requires patience and planning.

Marketing is not a website. And if you don't know marketing in the first place, you're going to lose a lot of money online. The web helps with the job, but it's not the whole job.

Marketing is an opportunity for you to earn profits with your business, a chance to cooperate with other businesses in your community or your industry and a process of building lasting relationships.

Now, like the guerrilla, you know what marketing is and isn't and you can make it work a lot harder for you.

Jay Conrad Levinson is the Father of Guerrilla Marketing. His books have sold more than 20 million copies and appear in 54 languages. You can learn from Jay in person August 27-29 in Orlando, Florida at his Guerrilla Marketing Business University. Get all the details atwww.GMBU.com. Jay's websites arewww.gmarketing.com andwww.guerrillamarketingassociation.com.

Make 'Someday' Happen Today

Here's what it takes to implement your big idea in 10 minutes a day.

By Rory Cohen | July 07, 2008

URL: http://www.entrepreneur.com/startingabusiness/startupbasics/article195330.html

Aristotle observed that every living organism has an inner force, a vitality that propels that organism to be fulfilled. He called that state of being entelechy.

Everyone has an entelechy, a vital force that is yearning to be expressed. The entelechy of an acorn, for example, is to be an oak, and given the right environment and nutrition, that's what it will be.

Try as we might, we can't turn the acorn into a pine or a willow. Our entelechy is uniquely our own and is encoded in our very being. Essentially, our entelechy is who we were born to be.

Unfortunately, many of us are busy trying to turn our acorns into pine trees, and we don't even know it. We try, struggle and fight for success, getting only more trying and struggling and fighting as a result.

When we can know our entelechy, and make our thoughts, intentions and actions line up with that vitality, we find that we struggle less and enjoy more, achieving marvelous results along the way.

One way to know our entelechy is to look at those someday dreams we all have but somehow never get around to, or that just seem too unattainable to begin. It may appear counterintuitive, but we have found that as people express their entelechy, even though it may not seem directly related to the goal they have been trying to achieve, they start to see extraordinary results in other areas of their lives.

One of our executive clients, for example, wanted to double his sales results. When we moved more deeply from his goal to his entelechy, the force within that was calling for expression, he realized that what he wanted was to experience more energy and vitality in his life. He took on an exercise goal, began working with a physical trainer and ended up doubling his sales without really focusing on them. As we express our entelechy, we expand our creative capacity and begin to see growth on many levels.

Why would we suppress our entelechy? There are many reasons we give ourselves: I don't have the time, I'll wait until the kids are gone or until I retire or until I have more money or more education. All these reasons validate our decision to put that dream on the someday list, where it can sit for years, sapping our creative energy.

The good news is that you don't need much time, money, experience or any other resource to get started on your dream. In fact, a commitment of just 10 minutes a day, taken consistently, is enough to get over the overwhelm, get the creative energy flowing again and start seeing some real results.

Here's what you can do in just 10 minutes today:

1. Consider your someday dreams carefully. What is your life calling for? Take 10 minutes to write out a list of all the things you've been thinking about doing but haven't done.
2. Choose one thing on that list to experiment with. It doesn't matter which one you choose. Often in our coaching programs, people start with one thing, then start seeing results in other areas. We soon see people accomplishing everything from clearing off their desk to starting a global program to end world poverty.
3. Spend 10 minutes focusing on that one thing you've selected. Imagine that you have successfully achieved whatever dream you've chosen. Fuel the fantasy with as much positive energy as you can. What would you be feeling if you woke up this morning and that dream had come true? That's the feeling you want to focus on. If you do nothing else with your someday dream but spend 10 minutes every day doing this exercise, you will see results.
4. Ask yourself, what is one small step I can take now that would get me closer to this imagined future? Can you make a phone call, spend 10 minutes on internet research, pick up some supplies the next time you are at the store?

Make small and easy action steps and find yourself quickly moving forward. Try it out for yourself on one of your someday dreams. Instead of saying "someday," you'll be doing something.

Rory Cohen is an expert in the psychology of success and implementation of big ideas and has been a featured on The View, CNN and National Public Radio. She co-developed the Take 10! System for achieving results, available in Take 10! How to Achieve Your Someday Dreams in 10 Minutes a Day. Cohen holds masters degrees in health administration and spiritual psychology. She has more than 20 years of experience in executive leadership, management consulting, training and coaching.

Running a Company From Home

Setting clear boundaries and carving out time for your work is the key to being a well-balanced home based entrepreneur.

By Tamara Monosoff | March 25, 2008

URL: http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnisttamaramonosoff/article191910.html

As a new entrepreneur, you can save a great deal of money by setting up your business at home rather than renting or buying office space. Unless you're running a retail-type business, most entrepreneurs can feasibly start from home. Then as you grow and your needs change, you'll be in a better position to secure off-site space.

It may seem like the perfect situation to set up shop at home. After all you have a non-existent commute; updating your wardrobe isn't an issue; and you have convenient 24/7 access to the office. Of course the cons may be the same: You're at home--a lot; you wear the same jeans five days in a row; and your office has 24/7 access to you.

For that reason, here are the realities of running a home based business, and how you can--if you so desire--keep your home and work lives separate.

Structure is essential. Yes, not having to don a suit every day, be in the office by 8 a.m. and be chained to your desk until 5 or 6 p.m. is liberating and possibly why you started your own business in the first place. But structuring your day in a way that works for you is imperative, especially with all the potential home based distractions like spouses, children, housework, personal phone calls and more.

Establishing structure will not only help you be disciplined and get your work done, it will also help the people around you know when you're available--and when you're not. If you're running a business from home, communicate which hours are for work, and which areas of your home are work zones.

I know one entrepreneur who was a previous stay-at-home mom, but started doing accounting work for a small group of clients when her son entered preschool. Her friends and other moms in the neighborhood, who always knew her to be available, would drop by and ask her to watch the kids while they did a few errands, or call and expect her to chat on the phone. The entrepreneur felt uncomfortable saying "no" to their requests, so she often got behind on her work.

What she hadn't done is explain her new business responsibilities clearly or say "no" when she should have. Establishing a structure--and reasonable boundaries--is essential to running a successful home based business. This advice applies to the people who live under your roof as well. That means creating a work schedule that's relatively predictable on a day-to-day basis, and communicating to family and friends that work time is work time.

Get help if you need it. You can't do it all. It's hard to run a company professionally, while simultaneously taking care of children or maintaining the brunt of the housework. If you need a mother's or father's helper while you're working, it may be worth the investment. The best part is that your children can still be nearby, accessible and entertained without distraction. If a messy house is driving you mad because there aren't enough hours in the day, consider hiring a cleaning person as part of the cost of doing business.

Create your own work zone. Even if space is limited in your home, a designated work area that is yours alone can help you focus. This may be the garage, a spare bedroom or even a desk in the corner of the kitchen. If you have family--especially older children--consider a separate computer, fax machine and phone line so there are no conflicts arising on a daily basis. Also remember that you may need additional space to store your products and inventory.

A bonus: The value of the space in your home designated for business use is an income tax deduction. But be reasonable when declaring it; you can't write off three-fourths of your square footage if you're only using one bedroom for your business. In addition, you can claim portions of your utilities like phone, internet, heat and electricity, that go toward business use.

Know when to leave the office. It can be tempting for zealous entrepreneurs to do business 24/7. And while it's an advantage to have instant access, it's also a challenge if you have other obligations or responsibilities. You'll always want to stay on top of that next e-mail or return that phone call, but many entrepreneurs I know have had to establish boundaries for themselves.

For example, when I interviewed Julie Clark, who founded Baby Einstein before selling it to Disney, she told me she simply had to turn off the computer at 3 p.m. when the kids came home from school, and return to it, if necessary, after they went to sleep for the night. Otherwise she felt the constant pull of checking and replying to e-mails and voice mails.

Keep one calendar. Part of the beauty of running your own business is the flexibility to dash off to your kids' afternoon recitals without asking the boss, or take a last-minute afternoon for golf on that first perfect spring day. But keeping track and balancing all your many "to-dos" can be daunting unless you merge your business and personal life. When I first started my business, I kept separate calendars: one for personal family events and appointments, and one for business obligations. I soon realized that this wouldn't work. My business and home life were completely intertwined, and I was double booking important events. Keeping one calendar for everything was the solution.

Make a move when you need to. As your business grows and thrives, you'll inevitably need more space for inventory and employees. That's the time to lease or buy some office space to save your own sanity and keep things professional. Of course you can still use the home office for late-night business access or work-from-home days. That's the beauty of being your own boss-- you call the shots, no matter where you're working.

Tamara Monosoff is Entrepreneur.com's "Inventions" columnist and the founder and CEO of Mom Inventors Inc., a product development and manufacturing company. She's also the author of The Mom Inventors Handbook: How to Turn Your Great Idea Into the Next Big Thing and Secrets of Millionaire Moms.

In-House

Thinking of starting your own homebased business? Take a peek behind the shutters and find out what it's like to make the dough right at home.

By Sara Wilson | November 14, 2007

URL: http://www.entrepreneur.com/homebasedbiz/homebasedbasics/article186854.html

They roll out of bed in the morning and head off for work--still in their pajamas. They work from their dining room tables, stock inventory in their cupboards and arrange meetings in the lobbies of their local hotels. They set their own schedules, jog on the beach during their lunch breaks and give out their house keys to employees across the city.

This is what life is like for Andrew Aussie, co-founder of Honest Foods, a natural foods company; Stacey Roney, founder of Beauty on Call, a staffing agency for the beauty industry; and Meg McAllister and Darcie Rowan, co-founders of McAllister Communications, a PR firm. Using their homes as their headquarters, these entrepreneurs, along with a growing number of others, are running successful businesses without even stepping foot outside their front doors.

A February 2004 study by the Independent Insurance Agents & Brokers indicates that approximately one in 10 U.S. households operate some type of full- or part-time homebased business. And these businesses are more than holding their own. A May 2006 study released by the SBA's Office of Advocacy reveals that America's homebased sole proprietors generate $102 billion in annual revenue.

As it grows in popularity and profits, homebased business is being perceived in a much more favorable light. According to Beverley Williams, a home business advocate for the past two decades, running a business from home was once frowned upon or dismissed as a hobby for moms seeking extra money. Now, homebased business is widely accepted and is attracting both men and women.

Aussie, Roney, McAllister and Rowan learned from experience and mastered the discipline. Here, these successful entrepreneurs open up about the ins and outs of running a business from home, including how to ward off loneliness, set up shop, deal with zoning laws and insurance issues, bring employees into the home and project a professional image.

Making the Transition
Deciding that the quality and taste of their brand was more important than the luxury of their workspace, Aussie, 39, and Mark Oliver, 58, decided to launch Honest Foods in April 2006 from Aussie's Del Mar, California, home. This gave them the freedom to invest the majority of their startup capital into two years of research and development, but it also meant a major adjustment for Aussie, who had been used to a very social office environment.

For 11 years, Aussie had worked in sales and marketing for Kashi Co., where he led a team of 12 people and was surrounded by 60 to 70 coworkers. During the transition, Aussie had to figure out how to recreate that social stimulation from his home office. He relies more than ever on phone and e-mail to stay connected with others, regularly arranges in-person meetings with vendors and suppliers at his home or a local restaurant or coffeehouse, and has even thrown parties for his ex-coworkers. "I thrive on camaraderie and social interaction, so it has been key to realize that it's now my responsibility to set that up," says Aussie. "I set up a lot of lunches and gatherings that maybe I wouldn't have set up before as a way to bring some more social interaction to my daily experience."

Combating loneliness is one of the top challenges facing homebased entrepreneurs, according to Williams and Paul Edwards, author of numerous books on the topic, and co-author of The Entrepreneurial Parent: How to Earn Your Living and Still Enjoy Your Family, Your Work and Your Life. Williams recommends seeking out the services of the local chamber of commerce or other small-business groups. These can offer good support networks as well as serve as invaluable resources of information.

Aussie also has learned that when not in the same office, over-communication is key in keeping everyone on the same page. Information, which is so effortlessly transmitted in an office setting through impromptu meetings or nonverbal communication, isn't always transmitted as accurately among Honest Foods' independent contractors who work virtually from their homes. "It means following up in writing, following up with voice mail, sending another e-mail, sending out reminders, doing all those weekly meetings," says Aussie. "These may have seemed superfluous in the office setting but are absolutely critical in a home office."

Another transition you'll have to make is equipping your home office, rather than relying on your IT guy to make all the decisions. Scrimping and saving is good, but even a home office needs a minimum investment in terms of equipment. As tempting as it may be, Edwards advises resisting the urge to go all-cellular or depending just on Skype and instead recommends equipping the home with at least one landline.

Aussie recycled his father's office equipment, furnished his office with hand-me-down furniture but made sure his copier is high speed, his phone has a speaker on it and his computer is top quality. Says Aussie, "People may underestimate the need to make that kind of investment in your home office."

Setting Up
Honest Foods is flourishing with year-end sales projected to reach $1 million and product already on the shelves of major natural food retailers, including Whole Foods Market and Wild Oats Markets. This success might be partially due to the physical setup of Aussie's office. He runs the business from a separate room in the house dedicated as his office space to keep his work life separate from his family life. It may seem trivial, but separating family life both spatially and time-wise is crucial, according to Edwards, who recommends using a screen or a divider if a separate room can't be spared.

Other key questions you should consider before choosing where to set up office: Does it interfere with the family foot traffic, and does it offer the solitude needed to work? A little planning beforehand could greatly affect the productivity of the business.

Aussie has learned he works best by shutting everything down and closing the door to his office at a set time each day. Work schedules will differ according to the preferences of the entrepreneur, but no matter how you operate best, Edwards strongly recommends setting goals for each day, so the business continues to move forward despite the hundreds of distractions that can occur daily.

Heeding the advice of experts regarding the physical separation of work life from home life may be an ideal to work toward, but sometimes a company's growth can make this a physically impossible task. Roney, 38--along with her husband, her Beauty on Call business, seven employees and three interns--just moved into a single family home, where one whole floor and two spare bedrooms will be devoted to work space. This is quite an upgrade from their three-bedroom condo, where the work flowed out onto the kitchen table. From her Chicago home, she works with almost every cosmetics company and has more than 500 freelancers nationwide.

Roney expects 2007 sales to approach $1 million and plans to hire four more employees this year, which means her business might even outgrow her new single family home by next year. Roney plans on holding out from moving into an office as long as possible. "By eliminating that overhead, we're able to be more profitable, so I can hire more staff," says Roney. "Anytime we bring on more business, I'd rather use that money to hire an additional employee or pay my existing employees more money and also offer competitive pricing to my clients."

Roney loves working from home and has passed on the advantages to her employees. There's no dress code, and they all wear slippers; her employees complete 40 hours of work per week but have no set schedule. At least once every week, Roney prepares lunch for everyone. "Our home is their home, and they all have a great relationship with my husband. They feel very comfortable here," says Roney. "It's like family."

Entrepreneurs Who Need People
Roney's relationship with her employees is based on trust, but how does she go about finding people who merit that trust? Roney admits she hasn't always chosen correctly, but she has learned to look for certain qualities in potential employees, such as an entrepreneurial spirit and self-motivation. She also has started working with people initially on a freelance basis, so she can get to know them before hiring them full time.

Bringing employees into the house is a big step that needs to be considered carefully. It's a decision Aussie is currently struggling with, as he isn't entirely certain how comfortable he would be sharing his house with an employee. Ultimately, though, the decision might not even be one for the individual entrepreneur to make. Edwards warns that it could present conflict from a zoning standpoint. "This is where you really have to check your zoning, because if you live in a common interest development, [having employees] can create parking problems and get you into hassles with your neighbors," he says.

You can't be too careful when it comes to zoning restrictions in general, warns Williams, who recalls several instances where individuals lost their businesses due to zoning violations. "You cannot assume you can do whatever you want in your own house," she says.

To find out what's permissible, you should start by determining if a homeowner's association governs your residence. If so, you should carefully examine the covenants and restrictions. If not, inquire at City Hall or the county's Department of Economic Development or Department of Licenses and Permits.

Williams also warns entrepreneurs to purchase appropriate insurance for their businesses, as homeowner's insurance rarely covers home businesses. "Talk to an insurance agent, preferably an independent agent who can take a look at all different kinds of programs from different companies and find the best one," she advises.

Staying Professional
While the perception of homebased entrepreneurship has improved significantly, it may still be wise to keep the fact that you're working from home under the radar. "Despite the percentage of people approving of this now, you'll run into some people who will have a problem with it," says Edwards. "The best policy is to not make a point of it--not lie about it, certainly--but for all purposes, to create a business that doesn't have a geographical identity."

Being in the PR industry, where perception is important, McAllister, 43, and Rowan, 39, tried having an office when they first launched the company in 2001. Located in Toronto, the office was on the same street as the "big boys," but when the rent and the taxes went through the roof, they realized perception shouldn't have to come at such a high price. So they moved the business out of the office and into their respective homes--McAllister's two-bedroom home in Toronto and Rowan's New York City apartment--and thereby cut their expenses in half.

To compensate, they found alternative ways to maintain the level of professionalism their clients require. They work with a web hosting company so they and the approximately 10 independent contractors they work with all have a similar e-mail address; they partnered with a local The UPS Store franchise to handle all their bulk shipping needs, which relieves the impact their business has on their homes; and they use a conferencing service so they can both speak with clients via the phone. In addition, they researched all their local hotels and coffeehouses to find the best locations for meeting with clients.

"An increasing number of hotels are offering coffee service and free internet connections in the lobby," says McAllister. "So it behooves you to do a little research and find the places closest to you that keep with the image you're creating, the service you're providing and the industry you're working in, so you're never left scrambling."

McAllister and Rowan are projecting their annual billings to hit $500,000, but they have reaped more than just profits by keeping their business in-house. By setting up a virtual office and inherently trusting one another as well as their independent contractors to remain focused on the overall goal of the business, they have replaced office politics and rigidity with a commitment to be disciplined and work as a team. McAllister says, "Being outside of the four walls has helped us to create a company that is more solid in terms of the way people work together and feel about each other and the work they do than being within four walls ever could."