You may see, hear, and read a lot of people constantly raving about the numerous wonders of a home-based business but starting and managing one isn’t immediately a bed of roses. In some cases, having a home-based business is easier than having a business in traditional settings, but in some cases, it’s absolutely the other way around.
Tip #1 You Still Need the M’s for a Home-Based Business
The only difference is that there’s no need for you to pay for rent and possibly, you’ll have lower business costs because your business is based at home. But other than that, the process of starting up and the necessary factors of production are still the same.
Money - Its rarely possible, if at all, to start a home-based business without spending even a dollar for investment and pre-operating costs.
Material - If your home-based business is selling products and not services then you’ll still have to ensure that you’ve got the best materials to produce the best products in the market.
Manpower - for a home-based business, you can usually make use of family members ñ even your kids ñ to help and provide the necessary labor for the business.
Machinery - Usually, a home-based business selling services online can function with a computer and Internet access, but if you’re selling products, you’ll naturally need other additional equipment.
Tip #2 You Still Need to Register Your Home-Based Business
The fact that you have a business based or you’re working from home doesn’t exempt you from your obligation to pay taxes. You can, however, apply for tax deductions that you may be eligible for due to your home-based business.
To qualify for tax deductions, you need to prove that one part of your home is indeed used primarily and exclusively for operating your business. Secondly, if ever personal meetings with your clients, suppliers, and affiliates are required, you use that section of your home for such purposes.
Tip #3 Products, Services, or Both?
A home-based business may sell products, services, or both. The success of your home-based business depends on how marketable your products or services are. Consider the following factors:
Quality - How does the quality of your products or services fare compared to those manufactured or provided by your competitors?
Cost - How much are you selling them for? Since you’re operating a home-based business, you should take advantage of your situation and use it to lower the price of whatever you’re selling. Lowering your price is something you can afford to do because you have lower costs, and it will at the same time allow you to compete against bigger retailers on the same ground.
Tip #4 Online, Offline, or Both?
The success of your home-based business will also depend on how you should to advertise about your business. If, for instance, you’re selling home baked cookies, you’ll probably achieve greater profit by focusing mostly on selling to your neighbors and acquaintances in the area then advertising online on the sides. Setting up a home-based web designing business on the other hand would certainly benefit more from online advertising.
Tip #5 Are You Good at Waiting?
A home-based business will also take time to prove its profitability and stability. Thus, make sure that you’re willing to wait for your business to grow. There are any number of hurdles that your home-based business might face in the future but you need to be prepared to face all of them if you wish to succeed.
Big Grocer is Watching you!
Do Businesses Need Better Access to Rent Subsidies?
Will Wage Subsidies Help Retail Businesses?
Need Money? Should you Withdraw from your RRSP?
Think Carefully Before Lending Money to Relatives or Friends
Financial Literacy Lessons Should Begin Early in Life
Paying Digitally? – Tips to Stay on Top of Your Finances
Over-contributed to your TFSA or RRSP? Here’s what you should do.