Location and Use of Professional Services for Export-Import Business

When the export-import business is small, it is economical to use one’s home as an office during the early phase of the operations. Besides saving money and travel time, using a por­tion of a home provides opportunities for deduction of expenses related to the business.

All of the direct expenses for the business part of the home, such as painting or repairs, are deductible expenses. The business use of a home may, however, provide the wrong impres­sion to credit-rating agencies or clients, who may decide to pay an impromptu visit. An­other problem with using one’s home is that it may violate a city’s bylaws that prohibit the conduct of any trade or business in an area that is zoned strictly for residential purposes. Homeowner’s insurance coverage may not cover business equipment, merchandise, or sup­plies. It may be advisable to rent from a company with extra space or rent an office with basic services.

The use of professional services (use of attorneys, accountants, and consultants) is impor­tant not only during the early stages of the business but throughout its operation as an infor­mal source of guidance on liability, expansion, taxes, and related matters. If the entrepreneur does not have sufficient resources to pay for such services, many professionals are willing to reduce rates, defer billing, or make other arrangements.

Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.

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