This type of business set-up means that there is just one owner who is totally responsible for everything. It's the easiest way to start a business, and how most people get started as long as they're not in a category that requires another entity.

One problem with this type of business is that if something goes wrong and a customer or other person is harmed in some way and brings a lawsuit, they can win your personal funds and even take your home. Taxes are easy in the USA with the schedule C on personal income taxes.

If you are running a business with another person, then you may want to form a partnership. You don't have to in order to run a business with someone else, but it can offer another level of protection for both parties in the event of a disagreement or even a lawsuit. Income taxes are simple and somewhat like the schedule C reporting, with an additional information return filed. This type of business can be difficult at times, but it's just as easy to set up as a sole proprietorship.

Many people like to form LLCs because they have the opportunity to file taxes as a partnership, corporation, or even as a sole proprietorship. The LLC is mostly just to protect individual business owners from personal liability if something goes wrong and a lawsuit happens, or if the business goes under.

There are many types of corporations such as an S Corp and an INC. These are the most expensive types of entities to form, and have many requirements such as having a board, separate taxes for the business and owners, and other issues. You'll definitely need to work with a CPA and perhaps a corporate lawyer to help you form a corporation and keep compliant with the laws.

Knowing who you want to work with and help is very important, because you will be able to create better services, products, information and education for them if you know who they are.

Once you know your audience you can narrow down your focus to one problem your audience has. That is your niche. If you can solve a major problem that your audience has, you're golden.

Once you figure out who your audience is, and what your niche is, you can start developing a brand. Is the brand going to be you, or is the brand going to be the solution? One will always require your presence, and another might be salable. It's up to you.

You can't present yourself as an expert with an amateurish website. It needs to be professional, and unless your expertise is web design it's not likely you can do this for yourself. The words on the site, the design of the site, the images on the site, all need to be created by individual experts.

As you brand yourself, you'll need to set up each of your social media profiles so that your brand works throughout the internet. While each social media site has its own personality, yours should show through.

Even as your website is being perfected, you can blog to show your expertise. Write your blogs directly to your audience to educate them about their problems so that you can start offering your solutions.

A white paper is a good intro to organizing information to educate your audience about their problems and your solutions.

Creating "how to" and informational videos and posting them on YouTube is a great way to position yourself as more of an expert.

As you gather more material, you'll eventually have enough to put together an eBook without too much work.

You can publish your book and sell it via Kindle free. It's a great way to get new customers.

Once you've successfully published a Kindle book, you might want to take it a step further as you get a large following and publish a paper book. You can do this with print on demand via CreateSpace.com and Amazon.

Networking at live and online events will help you get used to the idea of being at these events so that eventually you can present at them. It will also help you build relationships.

With your books you have a platform for your message, and you can now take that and speak at live events, both online and offline.

Don't just set up social media profiles and be invisible. You want to participate, share your knowledge and connect with others so you can build relationships.

Contact different groups and offer speaking services to them. Create a "one sheet" with the information about the types of talks you give.

Don't stop; keep going. Each thing that you do will build on the next thing, and before you know it you're positioned as an expert and the sky is the limit.

When you've decided upon a business and a business, there are tools of the trade that you may need or want. See what is available so that you can research the tools and choose the ones that offer the most value to your business.

It can be tempting to run out and buy a file cabinet, paper, printer, ink and so much that you relate to an "office," but today you don't need those things. Instead "think green" and avoid most of that stuff. You don't need it, and you're not ever going to need it. Even when it comes to printing, unless you have a position that requires it, you will save money buying a second monitor instead of printing things out.

What items do you already have? You likely have a laptop, a desk, and other things that you can put into service already for your home business. There is no reason to go out and buy all new things when you are first starting out. Using what you have will enable you to spend money on things you don't have.

Don't get carried away in the beginning with adding extra phone lines, a new internet connections and things that you're not even sure you need yet. If you only add things when you're certain that you need them, you'll keep your budget lower and controlled.

Before you add a new expense to your business, ask yourself if the expense will create a return on investment or not. If not, ask yourself why you really need the expense. Does it play an integral part of your business to help it keep running? Do you really need it? You do have to spend money to make money, but you should be smart about it.

One of the most awesome things about working from home today is the cloud-based technology that is available. You can essentially rent software instead of buying it outright, which means that you can deduct it fully each month from your income, and then if you no longer need it you can stop. Plus, most cloud-based software allows for flexibility in terms of features that you may or may not need.

Your break-even point is the amount of money you need to make just to keep the doors open without actually earning a profit. It's your cost of doing business. This is an important number to note because it will help you determine your fees in the future.

Always take the time to look at your budget each year to make sure that it fits with your goals to maintain a lean business. Being lean with a home office is a lot easier than if you had a bricks and mortar business.

Your lean home business budget is an important part of running a home business. You have something a bricks and mortar business doesn't, and that is lower overhead and much more flexibility surrounding the costs to do business.