Rule 1. Do your homework.
Much of a home-based business potential for success depends on how much preparation an entrepreneur makes before ever opening for business. Your local library and the Internet are excellent sources of information on customers, industries, competitors, and other important topics.

Rule 2. Find out what your zoning restrictions are.
In some areas, local zoning laws make running a business from home illegal. Avoid headaches by checking these laws first. You can always request a variance.

Rule 3. Create distinct zones for your family and business dealings.
Your home-based business should have its own dedicated space. About half of all home-based entrepreneurs operate out of spare bedrooms. The best way to determine the ideal office location is to examine the nature of your business and your clients. Avoid locating your business in your bedroom or your family room.

Rule 4. Focus your home-based business idea.
Avoid the tendency to be “all things to all people.” Most successful home-based businesses focus on a niche, whether it is a particular customer group, a specific product line, or in some other specialty.

Rule 5. Discuss your business rules with your family.
Running a business from your home means you can spend more time with your family . . . and that your family can spend more time with you. Establish the rules for interruptions up front.

Rule 6. Select an appropriate business name.
Your first marketing decision is your company name, so make it a good one! Using your own name is convenient, but it’s not likely to help you sell your product or service.

Rule 7. Buy the right equipment.
Modern technology allows a home-based entrepreneur to give the appearance of any Fortune 500 company, but only if you buy the right equipment. A well-equipped home office should have a separate telephone line, a fast computer, a sturdy printer, a high-speed Internet connection, a copier/scanner, and an answering machine (or voice mail).

Rule 8. Dress appropriately.
Being an open-collar worker is one of the joys of working at home. However, when you need to dress up (to meet a client, make a sale, meet your banker, close a deal), do it! Avoid the tendency to lounge around in your bathrobe all day.

Rule 9. Learn to deal with distractions.
The best way to fend off the distractions of working at home is to create a business that truly interests you. Budget your time wisely. Remember: Your productivity determines your company success.

Rule 10. Realize that your phone can be your best friend . . . or your worst enemy.
As a home-based entrepreneur, you’ll spend lots of time on the phone. Be sure you use it productively.

Rule 11. Be firm with friends and neighbors.
Sometimes friends and neighbors get the mistaken impression that because you’re at home, you’re not working. If someone drops by to chat while you’re working, tactfully ask him or her to come back “after work.

Rule 12. Maximize your productivity.
One advantage of working from home is flexibility. Learn the times during which you tend to work at peak productivity, whether that occurs at 2 P.M. or 2 A.M., and build your schedule around them.

Rule 13. Create no-work time zones.
Because their businesses are always nearby, the tendency for some home-based entrepreneurs is to work all the time, which is not healthy. Set boundaries that separate work and no work times and stick to them.

Rule 14. Take advantage of tax breaks.
Although a 1993 Supreme Court decision tightened considerably the standards for business deductions for an office at home, many home-based entrepreneurs still qualify for special tax deductions on everything from computers to cars. Check with your accountant.

Rule 15. Make sure you have adequate insurance coverage.
Some home owner policies provide adequate coverage for business-related equipment, but many home-based entrepreneurs have inadequate coverage on their business assets. Ask your agent about a business owner policy (BOP), which may cost as little as $300 to $500 per year.

Rule 16. Understand the special circumstances under which you can hire outside employees.
Sometimes zoning laws allow in-home businesses, but they prohibit hiring employees. Check local zoning laws carefully.

Rule 17. Be prepared if your business requires clients to come to your home.
Dress appropriately. (No pajamas!) Make sure your office presents a professional image.

Rule 18. Get a post office box.
With burglaries and robberies on the rise, you are better off using a PO Box address rather than your specific home address. Otherwise you may be inviting crime.

Rule 19. Network.
Isolation can be a problem for home-based entrepreneurs, and one of the best ways to combat it is to network. It’s also an effective way to market your business.

Rule 20. Be proud of your home-based business.
Merely a decade ago there was a stigma attached to working from home. Today, home- based entrepreneurs and their businesses command respect. Be proud of your company!