People choose to start a home based business for a variety of reasons, one of the top being convenience and flexibility. Being able to set your own schedule can make life a whole lot different especially for those who have a family. I want to talk about the often over looked aspects that make a home based business a smart choice for a new business start up.
Over the last ten years did you know that if you were a small business owner and purchased a vehicle, you could write the entire purchase amount off your earned income figure? What does this mean in terms of tax advantages for a home based business owner? Well, first off if the purchase price of the the vehicle puts you in a different tax bracket then the savings could be several thousands. At bear minimum your not paying taxes on the purchase price of the vehicle. Lets say you pay 20% income tax, for easy math, and lets say the automobile cost 30k well in this case you would would save 6 thousand dollars in income tax, not bad?
There are other tax benefits, ask an accountant about the advantages of starting a home based business. Another major difference I actually “feel” is the lower expenses associated with a home based business. You know, we don’t think about, but having a job is expensive. Not sure what you line of work is, but it seems each career option has an accompanying wardrobe expectation. I worked in the commercial construction industry and I know first hand, the clothing expenses that come along with it. Making money from home with a home based business doesn’t require me to dress a certain way for certain weather or certain safety considerations.
I think most people get hung up on choosing a good home based business to start. Most look at what they know, or what they think the “can” do. While its logical, it might not be the best business to start, just because you can or know how. It comes down to adding value and providing an in demand product or service. What matters is what other people, your customers, want. I like online businesses, I think they make great home based business start ups. I like the lack of actual customers that my websites have. Its low stress for me and I enjoy doing it. I’ve learned a number of different things in order to earn steady income on the Internet. And It seems there is always something new to learn.
You might keep in mind, your business probably won’t look like you thought it would in a year or two, they never do. A business is kinda like a child, they grow and look different from year to year. I have learned to respond to what my business tell me, I try not to be to static and I always look for new opportunity. Another thing I keep in mind when evaluating a good home based business to start is the passive element. I like passive and Its a great way to leverage my time and work I do online. I have a few websites that earn money via advertising, I write informative articles on topics that people are interested in and people buy ads on those web pages, I have several web pages that earn me 3 or 4 bucks day after day.
I look at my web sites and individual online business ideas, or as separate businesses for that matter. I guess we are all different and we all are attracted to different business ideas. There are many turnkey home based business opportunities that allow people with little to no past business experience to start a home based business without all the risks associated with a traditional business idea.
The costs of starting a home based business are much lower than a traditional small business idea and this limits risk greatly. With a home based business there usually won’t be property to buy, a major expense of a traditional businesses, there are also fewer and less costly other expenses. Many home business ideas don’t really require employees, another major expense, they don’t require massive start up capital or large capital outlays for equipment and other items needed for a traditional small business.
It seems a lot of people get hung up on doing it perfect and never make it out of the planning stages. Its also easy to loose focus of the bottom line, the reason for starting a business in the first place… Making Money!
If your business isn’t making money, its a hobby. Its great to have hobbies, and you can have more, when your making money from home with a home business that is running in a profitable way. Every decision you make has to pass the acid test, will this make you money or not? Operating a profitable home based business is challenging, but you can do it. I like to use income goals, businesses respond well to goal oriented thinking. Profitability is important, almost the most important thing to operating a successful home business. The first has to be cash flow.
Cash flow is key, I’ve heard it said “Cash Is King”… In business, it really is. It doesn’t matter if your operating at 150% profitability, if the money doesn’t flow in such a way as to pay for the monthly fixed expenses, your screwed. Get cash flow figured out and then go to work on the profit margins. Most people go at it in the opposite order, I think this it the main contributor to the 95% failure rate of 5yrs and younger small businesses.
Do you have some experience with a home based business? What are some tips you could offer our readers?