8. Customer Feedback Made Easy – The Internet makes it possible to capture visitor information. Keeping in touch (via email) helps to cultivate long-term relationships. Also, widespread use of discussion forums is a popular way to get quick, low-cost customer feedback.

9. Frequently Asked Questions - Questions that may normally be answered by phone can be answered on Internet. A website can list answers to most frequently asked product or service related questions. This can save on phone bills and free up a lot of time and maybe an extra employee.

10. Interactivity – The Internet is much more dynamic than a few years ago. Some examples of this include:

- Automatic product updates through use of databases. - Automatic web site content and image changing. - The increasingly common use of live video and audio streaming. These and other Internet service can save money and increase business efficiency. They can also open door to exciting new marketing opportunities.

11. Test Marketing New Products – The Internet offers quick and easy ways to conduct low-cost market research. A questionnaire on a web site, or by email, can test very quickly and inexpensively whether a product gets a good response. What’s more, different offers or marketing approaches can be tested using different pages on same website.

12. Use of Time Sensitive Promotions – It is easy to quickly change promotions or offers on Internet. Emails can be sent out or a website offer changed almost instantly. Time sensitive promotions such as running contests, or product specials can be a good way to attract traffic and sales to an online business.

For those who haven't developed a web site for their business yet, now could be a good time to start. Local competitors may already have one. And remember; it’s now much easier for almost any business to tap into almost any market, from almost any geographical location. That’s why I say - Marketing on Internet is not really a choice anymore. It has almost become a necessity in today's marketplace.

Believe me when I tell you, if you're planning on taking business deductions, you'd better be able to prove to IRS that you have a genuine profit motive. How do you do that? By keeping proper books and records. By keeping business and personal expenses separate. By keeping business and personal income separate. By running a genuine business, in other words.

Here's how it works.

Let's say you have a spare room in your house that you use exclusively as a home office. Over past 12 months, you've bought a computer, desk, chair, printer and fax machine. You've decided that you want to start a home- based online business on side while you continue to work in your job. You spend several hours a day researching ideas for your new business and you spend a small fortune on your high-speed internet connection, and various information products relevant to your area of interest.

Because you're running a business, one of first things you're going to want to do is get a system for your business records set up.

Keep a record of all expenses as they're incurred so that when tax time comes around, everything is at your fingertips. I use Excel spreadsheets for this - one spreadsheet for every expense category. Here are categories I use (use whatever categories make sense for your business though):

Advertising and promotion Software* Web Hosting and Domain Name Registration Fees ISP/Cable Modem Fees Office Expenses Content Subscription Fees Telephone*** Bank Charges Books and Magazines Equipment** Furniture** Bad Debts Home Office Deduction

* Usually has to be depreciated over several years unless it's software that needs to be updated frequently such as anti-virus software.

** You can either depreciate these items over time or you can write off 100% during year of acquisition up to a maximum of around $20,000.

*** If you only have one phone, you'll need to apportion expenses between personal and business. On other hand, if you have a second line exclusively for you business, you can write off 100% of expenses for second line.

Every time I pay a business expense, I enter details in appropriate spreadsheet. Very easy.

Then, when time comes to file your tax return, you just need to prepare a Schedule C (for individual taxpayers). If your business makes a loss (i.e., expenses you pay out are more than revenue you bring in from your business), that loss is deducted from your income from all sources, thereby reducing your taxes.

But, best of all, if you qualify for home office deduction, you can take a proportionate share of your mortgage or rent payments and your utilities and apply them as a deduction against your business profits, but only to point where profit from your business equals zero. In other words, home office deduction cannot be used to create a loss situation. But even if you can't deduct it this year (because your business has already made a loss), it's not lost. You can carry it forward to future years to be applied against future profits.

So, as you can see, even if you're only in information- gathering/learning stage of your business, if you have a profit motive you're nonetheless in business and you can and should be writing off your business expenses even if you're yet to start generating revenues.

Make sure you keep proper records and substantiate all expenses though. The IRS is, of course, well aware of potential for abuse of home business tax deductions and will be paying close attention. That's fine though. If you have a profit motive, you ARE running a business and you're *entitled* to take any legitimate deductions that are available to you. To do anything less is to leave money on table.

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Elena Fawkner is editor of A Home-Based Business Online ... practical business ideas, opportunities and solutions for work-from-home entrepreneur. http://www.ahbbo.com Also, visit Elena's newest site, Web Work From Home http://www.web-work-from-home.com

Elena Fawkner is editor of A Home-Based Business Online ... practical business ideas, opportunities and solutions for the work-from-home entrepreneur. http://www.ahbbo.com Also, visit Elena's newest site, Web Work From Home http://www.web-work-from-home.com