Benefits of Owning a Home-Based Business
Home-based businesses are on an upward trend, quickly becoming one of the largest forms of business start-ups in the United States. Working from home offers a flexibility that cannot be matched by a typical office job, but requires a substantial amount of self-discipline to be successful. If you are willing to start small and work hard, you could potentially reap the rewards of a thriving business. In this module, we will discuss the advantages and disadvantages of owning a home-based business.
There are many advantages to owning a home-based business. The following are the advantages we will discuss within this module:
- Be Your Own Boss
- No Commuting
- Love Your Location
- Create Your Own Hours
- More Time for Family
- Earn Multiple Paychecks
- Pay Less in Taxes
- Less Stress
To learn more about a specific advantage listed, simply click on it to go straight to that section of the module. Or, continue through the module to learn about all of the advantages of owning a home-based business.
A home-based business gives you the ability to be your own boss. In essence, you have no one to answer to (except your clients) and you can run things the way you want. You can start your day when you want and take vacations upon need. Moreover, you will directly benefit from your hard work.
Forbes.com reports that the average American spends almost 50 minutes a day commuting to and from his or her office. What if this valuable time could be spent actually working? In fact, eliminating a commute could potentially save you thousands of hours in a year, enabling you to spend more time on producing revenue.
Plus, you will save money on the “wear and tear” of your vehicle, as well as gas and parking costs on a daily, weekly or monthly basis. Additionally, you will not have the stress of dealing with any type of traffic, unless you must travel to serve your clientele. But, again, you will have control over the timing of your client visits.
When you call the shots, you’re free to call them from wherever you want. Your location no longer will depend on elusive job offers; instead, you can choose where to live and love your choice. You don’t even have to get dressed to start your workday. The only thing you need to do is get up and start your day. Furthermore, working from home doesn’t always have to be from “home.” Your laptop can tag along on the next vacation, so work can intersperse itself between lounging on the beach or hitting the slopes.
Creating your own hours allows you to play to your strengths. Some people are more productive in the wee hours of the morning, while others work best right when they wake up. The ability to set your own hours allows you to juggle other obligations you may have, such as children, community volunteering, etc. Moreover, eliminating office hours allows you to contact customers or suppliers at any time via e-mail, fax, or voicemail without hassle. Flexible hours also allow for scheduling around family activities and accommodating clients and customers in different time zones.
Having a business in your home gives you the opportunity to spend more time with your family. If you have children, you have the option to schedule meetings and client visits around school or extracurricular activities. You also have the opportunity to provide a learning experience for your family in terms of client relationships and how to organize your time and business. Additionally, based on the circumstance, you can involve family members and work together to provide success for your business.
Working from your home, you can branch out in ways that a typical confining office job does not. For example, a marketing expert-turned-blogger may receive paychecks from numerous clients who have hired him to grow their web presence, but also runs a successfully monetized blog. Multiple paychecks equal an infinite income stream and more opportunities for growth as well as expanded learning.
Owning a business has its tax advantages. There are many different things you will be able to write-off, which may result in paying less in taxes. Be sure to consult your tax advisor to find out what you can legally write-off by owning a home-based business.
While there is definitely some stress associated with having your own home business, you will find that your stress level may decrease as time progresses. Simply put, you will not have to commute, you will not have an internal struggle to be with your family, and you will have more ability to do the things that you want to do, not things that you have to do. Plus, when you are doing what you really love, or something that you are passionate about, you will feel like you are not working at all and actually just enjoying life every day.
While there are several advantages of owning a home-based business, there are some disadvantages to consider as well. The following are the disadvantages we will discuss within this module:
- You Must Have Self-Discipline
- Sporadic Hours
- Different Pay Schedules
- Scheduling Time Off and Holidays
- Family Demands May Increase
- Insurance Issues
- Lack of Technological Support
To learn more about a specific disadvantage listed, simply click on it to go straight to that page. Or, continue through the module to learn about all of the disadvantages of owning a home-based business.
It is easy to get side-tracked when you are working at home. You may think, “I’ll just do a load of laundry,” or “I’ll just run this errand or that errand,” and then all of a sudden your work day has not been productive. Working from home requires that you schedule your day just as you would if you were at an office; only you have the option to work at different times than when a typical office is open. If you do not have good time management skills, working from home may become too difficult because you will not get things done, thus not earning any income.
While setting your own hours is a benefit, it can be a problem if you have clients on the West Coast while you live on the East Coast. What may be 5 p.m. to them is 8 p.m. and you are still working instead of spending time with your family. Also, many home business owners state they feel like they put in more hours in the day while working at home because all of the work is right there and why not just get it done. Sometimes you will find yourself working at 2 a.m. and then back up at 7 a.m. to get your family out the door for school or other activities. Whatever the case may be, if you set a schedule and stick to it, you can avoid some of these issues.
When you work at an office, you will be paid on a regular basis: once a week, bi-weekly, once a month, etc. Working from home allows you with opportunity to have different options for payment from multiple sources; however, you are at the mercy of your clients making those payments, and in many instances, those payments are not timely. For example, at the end of the month you may need to pay yourself to make your mortgage payment and a client is running behind with a large payment for you. As you can imagine, that puts you in a bad position.
It is critical that you work closely with your clients to develop a system for payment and try to stick to it the best you can. Ideally, if you are a consultant or some other type of service provider, it would be nice to have some sort of retainer that is paid on a certain date each month so you know that will always be there.
When you are working from home and every hour counts, especially when you are starting your business, it is difficult to take time off. Not only do you feel you are missing out on possible income, but you are truly not earning any money. At most office jobs, you are given a week or two of vacation in which you are paid to be gone; that is not the case with a home-based business. When you take time off, you truly take time off – no income coming in, just expenses going out.
The same holds true with holidays. At an office job, you will be paid for certain Federal holidays, such as Christmas, New Year’s Day, etc. But, when you work from home, no one is paying you for the holiday, so there is a temptation to work on the holiday instead of relaxing and taking a break.
Because you are at home, some members of the family may feel that you have more time to run errands or help them with certain issues. While that is the case in most instances, you must be careful to schedule your time so you are putting in the time necessary for your work while scheduling time with your family. There must be a balance and just because you are home does not mean that you are always available to do things that can wait until family members get home from school, jobs or other activities.
One of the biggest expenses you will have if you have a home-based business, and your significant other is self-employed as well, is that you will have to get your own insurance, and that is not a cheap venture (especially if you have a family). Depending on where you live, you may pay up to $1,500 per month just to provide basic insurance needs for your family. When in this situation, make sure you research all of your options, talk to a professional in the field and make a choice that works best for your business as well as your family.
Another disadvantage of owning a home-based business is the fact that there is not an IT Department (unless you are an IT person). If your computer acts up, or you can’t fax something, or even if your Internet goes down, you must figure out how to fix it on your own. In today’s highly technologically savvy environment, it is vital that you develop a good, working relationship with someone who can provide technological services for you, especially if that is not a strength for you. For example, if you are a copywriter, you can offer to write copy for websites created in exchange for work on your computer network, or something of that nature. If you are dependent upon a computer for your business, it is strongly recommended that you have a back-up system in your home in case of emergency. Remember, when you are not working, you are not earning money.
One of the disadvantages of having owning a home-based business is the fact that you are in your home 24/7. Sometimes it is a great advantage because you can create your own hours and even stay in your pajamas while you work; however, you can also get “cabin fever,” in that you are always in your home. Part of the creative process for many is talking through ideas with co-workers or even your boss. In a home-based business, you don’t necessarily have that opportunity. With Internet chat rooms and social networking, there is more opportunity for this type of interaction; however, nothing beats having a one-on-one conversation with someone about a strategy or idea. Furthermore, it is nice to just have the human interaction on a daily basis.
To avoid “cabin fever,” it is vital that a home-based business owner get out in the community when necessary, especially if it helps his/her business. He or she should also participate in industry groups or associations and try to maintain a connection to his or her particular field of interest. And, last but not least, a home-based business owner really needs to exercise regularly. Exercising will keep a person fresh and rejuvenated for the day and ready to tackle any issues facing him or her.
Should you own a home-based business? There are advantages and disadvantages to owning any type of business and a home-based business is no different. You must determine what fits your lifestyle and personality best and then make a plan to do so. If a home-based business is for you, talk to people who are home-based business owners and get tips from them for even more success.