Ask any financial adviser for recommendations to increase disposable income, and chances are, at some point, the subject of starting a home-based business will come up. Now, I am not a financial adviser by profession, but I do agree with most of them that having a home-based business is probably a good idea for most people. I don’t want to overwhelm you here with tons of information; I plan on covering some of these topics in greater detail later on. I just wanted to touch on:
- The benefits of a home-based business
- Ideas for your home-based business
- Some common mistakes when starting a home-based business
Why Should I Start a Home-Based Business?
The main benefits of a home business are:
- Doing what you love
- No limit to your income
- Tax deductions
There is an old saying that goes something like this:
“Do what you love, and you will never work another day in your life.”
If you were to win the lottery tomorrow, would you continue to work? Most would say, “No.” Why is that? I believe it is because most people do not love what they do every day. We spend eight hours a day doing something that feels like work. Wouldn’t it be better to do something you love to do? And I guarantee that almost anything can be monetized with a little creativity. Here is someone blogging about Pokemon Go! Choose something you love, and eventually, you may be be able to do it full time.
One of the problems with working at a job is the fact that you are limited by your “pay grade.” When you are in business for yourself, the only limit is how well your business does. Sure, your business can fail, but here is the ugly truth. There is no such thing as job security, and there never was. So why not go into business for yourself and unleash your earning power?
For most financial advisers, the primary benefit of going into business for yourself is the huge number of tax deductions that instantly become available to you. Now, I am not a tax expert, and I would definitely advise you to seek guidance on what you can deduct or not deduct for your personal situation. Some of the more common ones are:
- Mileage on your vehicle
- Travel expenses to business destinations
- Business lunches
- Home office deductions
- Business supplies
- Electronic equipment (computer, printer, cell phone, tablet, etc.)
Some of these may not apply to your situation, but some of them definitely will.
Home Business Ideas
I wanted to include a few ideas for home businesses. If you don’t see something that interests you here, don’t worry. Just think of what you love to do and build your business around that. These are just a few of the ones that I find interesting and exciting.
Affiliate marketing has gained a lot of popularity in recent years for the simple reason that it is easy to get started with little to no cost. Affiliate marketing is basically selling other people’s products. In simplest terms, you send someone to an online site, like Amazon or Walmart, they buy something, and the company pays you a commission. Since you do not actually produce a product, you don’t have to carry any inventory or actually ship anything to your customers. If this is something in which you might be interested, I urge you to head over to Wealthy Affiliate and sign up for a free account. They can walk you through the whole process of setting up a website and creating content that will ultimately drive traffic to your site.
Network, or Multi-Level Marketing (MLM)
Multi-level marketing (MLM) has received a bad reputation in recent years, and much of it is well deserved. Terms like “pyramid scheme” are common, and stories abound of how everyone at the bottom is working like crazy to sell the product while those at the top make all the money. But like any industry, there are good players and bad, and “one bad apple spoils the whole bunch.” Most people associate MLM with that relative you haven’t heard from in years, who calls you to tell you about some great new products, or corners you at a wedding and tries to convince you to come to a meeting where you will be pressured to “join his team.” But did you know that Tupperware and Mary Kay also use the MLM structure to build their business? The point is that you need to do your research if you are interested in joining an MLM-based company. I could write multiple articles on MLM; in fact, I may do just that. Tune in later for future articles on MLM.
There is really no limit to the ideas. Again, it should be something you are interested in. If you have a hobby, consider converting it into a business. Here are some ideas I have come across and even considered myself:
- Selling arts and crafts
- Fish tank maintenance
- Dog training
- Dog walking
- Personal Assistant
- Article writing
- Web design
Those are just a few ideas, and you can definitely add more. The sky’s the limit!
Common Home Business Mistakes
Of course, there are thousands of mistakes to be made when starting a business. Here are just a few:
Being a Perfectionist
This is a big one for me! I don’t want to take a step unless I know exactly what I am doing and can take that step perfectly. There’s just one problem with that: perfection is impossible. And even if it were possible, there’s this little thing called the law of diminishing returns. The law of diminishing returns basically says that producing a product that is “perfect” might take 100 times as long as producing a product that is “good enough.” Don’t be a perfectionist. Like Nike says: Just do it! Make your mistakes and learn from them.
Not Understanding your Customers
One of the best skills you can develop when you go into business is the ability to put yourself in your customers’ shoes and understand what they want and what makes them purchase something. If you can do that one thing, you are already ahead of 90% of the people who go into business. Steve Jobs was a true visionary leader who could determine what his customers want before even they knew what they wanted. Obviously, not all of us can be a Steve Jobs. But all of us should strive to work toward understanding our customers’ wants, needs, and problems. Here is some great training on understanding The Customer Purchase Lifecycle. It describes what customers typically go through before making a purchase.
Setting Unrealistic Goals
It’s great to shoot for the stars. Don’t get me wrong; I think it’s great to push yourself to achieve something you are not sure you can do. However, I think a lot of people fail because they expect to be raking in millions within their first few weeks in business, and when they are not, they simply quit out of frustration. You need to be realistic. A better goal to strive for is constant improvement. Are you earning more this month that last? If not, why not? As long as your business is improving, you are on the right track.
In summary, this page is just a starting point to get you thinking about going into business for yourself. You may decide it is not for you. But if you do, I urge you to check back here every so often. I plan on expanding on many of the topics I’ve discussed here.
If there’s a home-based business you’d like to see discussed in a future post, I’d love to hear your ideas. Just post them below.
Have a great day!