Entrepreneurship is older than big business. The original entrepreneurs were traders. The earliest example of trading was found in, surprise, Papua New Guinea. This occurred around 17,000 BC. Money, as we know it, was not yet invented. The first entrepreneurs engaged in bartering — the exchange of one set of goods for the other. So, what does this mean? It means that every big business today owes its existence to the little entrepreneur. As the great Rock and Roll pioneer, Little Richard would say: the small businessperson is the “originator.” So, every person who is an entrepreneur today can feel really proud that he came from a great tradition.

 

The shifting sands of change brought about by the pandemic has been a mixed bag for small businesses. Many businesses went out of existence; some businesses survived; and many new businesses have sprung up. Many people who were displaced by the huge layoffs, have either decided to explore entrepreneurship or have taken the full step forward into business ownership. For them, there are many rewards associated with business ownership, despite the inherent risks.

 

The idea that you’re hiring yourself, you’re paying yourself, and you are least likely to fire yourself is a gratifying feeling for the typical entrepreneur. There are other benefits that are embedded in the financial system that give an advantage to the entrepreneur.

 

When starting a business, initially, you can use space in your home as your office and be able to take a tax deduction for costs related to your home office, such as a computer, printer, scanner, copier, etc. You can get a tax deduction for the actual footage you use in your home to conduct business. For example, if the square footage of your office is 15 percent of your home’s total, you can claim a deduction for 15 percent of its expenses.

 

If you use your car for business, you can claim the expenses for the business part of the use. You can have your business pay for your Health Insurance Plan and your Retirement Plan. You can put more money away in a qualified plan than if you are an employee.

These are some of the common benefits of having a business. There are more obscure benefits as well. But you should always speak to your accountant about all aspects of opening a business. It is better to let a professional guide you through the process. He or she would help you avoid the pitfalls which could prove to be the difference between success or failure.

 

-Chester Peters