Make no mistake, starting your own business is tough, but most things worth doing are. And what if you want to start our business from home? There are many pros and cons of launching your business from home.
Starting a career from home can be an ideal plan but can have its downsides as well.
Let us take a look at some of the pros!
Be your own boss:
This one is great, right? No one telling you how it should be done. No micromanaging. You get to set your own hours, dress code and everything else. You can even get that corner office on your very first day.
No more traffic jams or crowded public transportation. No need to get stressed before your day even begins, because of delays that are beyond your control. At the end of your day, getting home to your loved ones or just being ‘on your own time’ is as fast as stepping out of your work space!
Fulfill your dreams:
This is a big one. The whole point of all of this effort and time is to get what you really want from your life. And there it is. You pick that thing you’ve always wanted to do and run with it. Soon, you can say “I work at my dream job,” instead of “I work at this, but I’ve always wanted to…” You’re on your way!
If your home industry has a client base that you interact with, you can give them exactly the sort of customer care you’ve always loved. Being there to expedite a problem gives a nested series of benefits for both you and your client. By working ‘hands on’, your customer understands that they can count on you. This builds repeat business and customer confidence. They’ll tell their friends, too, so your core customer base can grow.
In addition, you get the direct feedback of their gratitude, and a better sense of a job well done. Even if there’s a problem at the start, you have a great opportunity to turn that around. After all, someone working for a boss is often lackluster about solving issues because they’re not invested. You are.
Make your own decisions and rules:
You can steer your business on the fly, if needed. You are the decider. If a product or service is getting a higher or lower response from your market this week than last, it’s easy to rescale your production and focus to take advantage, or compensate for that. If there is a supply side issue, no chain of command needs to debate the problem or approve actions and budget. You can find a new source and move along.
According to Benjamin Franklin, “a penny saved is a penny earned.” The money you don’t spend can be used to further your business or support your family right way.
Transportation costs are drastically lowered when transit fares, tolls or fuel costs disappear. You might even qualify for a tax break due to your home business, as well. That’s a big change from looking at your pay stub and seeing how much of your hourly wage isn’t getting to your bank account.
Even your food costs will go down. Home cooked meals are much cheaper than take away. You can cater to the diet you want to eat, not make do with whatever is fast or easily available, which brings us to the next pro among the pros and cons of launching your business from home.
If you eat whatever is closest, fastest or just plain there, you can’t control much. If your food comes from your own kitchen, it’s just the way you like it. You’ve been wanting to get yourself onto a better diet for a long time, and now you can.
You might even change your work environment from sedentary to active, depending on your choice of career. Better still, if you’re so inclined, you could start using the expensive exercise equipment that’s been gathering dust, or put on your running shoes and get outside. You can set up a regular exercise routine and use it to replace the time you used to spend on commuting. You’ll have more energy, feel better, be healthier, and live longer to enjoy the rewards of your hard work. Of all the pros and cons of launching your business from home, this one will give you lifelong benefits.
On those unavoidable occasions when you need some time for something outside of work, it’s almost always right there for you.
If a delivery or service professional needs to come to your house, you don’t have to take a day off from work, with lost wages or vacation time. When the cable guy says “between 11AM and 3PM” it’s not a problem. You can work right up until the time that the doorbell rings. Once they’re gone, you can get straight back to your own tasks. Your time is well spent rather than wasted.
If the kids need to be picked up or dropped off, you’ll hardly break stride. You might even be able to work in a trips to the post office or to pick up supplies, to fit in with the timing.
Now let’s evaluate the other side of the coin.
Time spent vs. wages earned:
Whether you feel you have ‘all the time in the world’ or you are completely caught up in ‘getting it exactly right’, the end result is the same. You take more time than you should at a given task or project. If your margins are tight (and who’s aren’t these days?), the time spent vs. earnings ratio is critical to the success of self-employment.
Similarly, when you are ‘on call’ 24/7, if you break down your numbers you’ll probably be horrified at your hourly wage. Even a minimum wage job can look good by comparison! This is a tough hill to get over, especially if you have been at it for a while. You run the numbers and realize that your dream job is a nightmare. Don’t lose heart! As you work smarter, you get your ducks in a row, and the ratio will get better. Take another look at that ‘Pros’ list, and understand what it is that you’re really earning here.
Taxes and bookkeeping:
These will be on you, as well. You won’t be paying into a pension fund, unemployment, disability or any of those other deductions. You have to remember to open that account and put a portion of your earnings aside.
Getting that tax break for a home office is great, but don’t forget to declare your income. Save receipts for expenses? Sure, but don’t overdo it. Calling a lunch with friends a business expense because you talked about your new day job, might not fly if the tax man decides you need an audit.
While we’re talking about taxes and the government, let’s not forget:
Licenses, permits and inspections:
If your business needs licenses, permits or inspections, you’re going to have to get them before you start earning.
Those framed papers with the official stamps on the wall at your last job weren’t free and, like the saying goes, “Ignorance of the law is no excuse.”
If you sell a food product or bath bar, you probably need some kind of hygiene certificate. If you’re looking after of other people’s children, you’ll need paperwork showing that you know how to keep them safe and sound when in your care. If you’re taking care of someone else’s pets, there might be permits involved.
You should definitely check your local government’s Small Business Website or visit the local office. They’ll have information about these things, and probably even a program to support local business growth. Use the information they have available to plan ahead, and grow your business. You should take advantage of every possible program or class. Most of them are even free. Plus, you’ll probably learn about opportunities you never even thought of.
Working space and equipment:
Maybe your business needs some component your home shop can’t handle or you’ve got cats that won’t stay off the kitchen counter. Off-site work space might be your only option, and it might be an expense you can’t avoid.
Renting a day in a professional kitchen space, business center or maker space might be a required expense to keep your production rate up. You might have to do this if local restrictions or lease conditions prohibit some factor in your business equation.
If you produce anything, there’s bound to be waste. Whether it’s packaging from raw materials or some non-usable by- or end product that has to be disposed of, it could be something you have to consider if you end up paying higher rates to have excess trash hauled away. It could add to your overhead.
Home office utilities:
When you’re working in someone else’s office space or shop, you don’t really think about heating or air conditioning costs, or water bills for the kitchen and bathroom. When you’re working from home, you won’t have the option of turning off air conditioning in summer or turning the heat down in winter.
If you’re making bookcases, those power tools are going to be used more often than just on the weekend. That can add up. If you’re cooking or baking, then your gas and/or electricity bills are going to increase.
Power tools, computers and printers, kitchen equipment, sewing machines. These all need power, and you’ll have to pay for that, too.
No IT support:
No company IT department means that you’ll have to either find a tech support company or other solution for computer related issues. Maybe your child or grandchild is more tech savvy than you are, but remember ‘you get what you pay for.’ A paid professional stakes his or her reputation (or the company’s reputation) on how well they perform.
If you depend on your computer for email and social network marketing, and it crashes, that’s a problem. If you lose customer data or a year’s worth of receipts, it’s a major issue. If you can’t access your PayPal or bank account, business grinds to a halt.
You might have to stretch yourself here, and learn something new and complex, but it will highly benefit you in the future, and your family, too! Becoming a better business person means bigger profit in the long term.
you are responsible for any issues arising from your business. You must be sure of the quality of your output. If that item fails or someone has a problem with your service, it’s on you. Plan ahead. Think through potential issues. Sure, it might seem depressing or discouraging, but you’ve got a good idea of potential trouble, you can probably avoid some problems before they have a chance to happen.
Your time is yours. Or is it? When you’re home from your job, you have quality time with the family. Right. Pretty simple. The line blurs when you’re always home, and that has a number of special pitfalls that must be avoided. Your family or housemates have to ‘get’ that you are working!
If the kids keep wandering in and asking for help with homework, your housemate wants you to go out to see a movie, or the cat won’t stop bugging you, it’s time for action. People have to comprehend that this is a real job and it needs to be done. The cat will just have to deal with being locked out of your work space. Managing time at home is one of the biggest challenges you should consider when you are evaluating the pros and cons of launching your business from home.
Managing you workspace:
Speaking of work space, you’ll need one. A real one. Whether it’s that spare room turned into an office, the garage turned into a shop, or even just the dining room ‘claimed’ for work. You’ll maintain far better productivity to output ratio with a distinct work space. It’s all about regimentation. Which brings us to…
Regimenting Your Routine:
Especially when you first begin the scary (but thrilling!) transition from working for someone else to working for yourself, you have to treat it like a ‘real job’ because it IS a real job. More real than ever before. Set your alarm and get up. On time. Every time. Save that carefree idea of “I’ll work whenever I want” for the time when your home based business is so profitable that you’re considering hiring employees. At least your commute is two minutes or less, though, right?
Eat breakfast. Shower. Brush your hair and teeth. Maybe have a shave or put on makeup, if that’s what you did before. These things set your body in motion and help focus your mind on the day’s upcoming tasks. You’re training your brain, not just going through the motions.
Do NOT work in your pajamas, no matter how wild and carefree that might make you feel. Your bathrobe or dressing gown is not a suitable replacement for a jacket or sweater. The temptation to get up, pour a cup of your morning beverage of choice, and then shuffle of to work in your slippers can be great. Squash that temptation quickly, firmly and permanently. Dress for success doesn’t just apply to regular jobs. You can probably leave off the tie or pantyhose, but if you aren’t wearing something you can step out into public in, then you’re not dressed for work.
You are your own boss. Look the part. Be professional. Your clients will be able to tell, even if you aren’t face-to-face, and you’ll never be taken off guard by an unexpected Skype call with video!
You’re on the job 24/7/365. On call. On standby. Often on overtime.
That’s the challenges you face when starting a business from home. Accepting that there will pros and cons of launching your business from home will be a big step towards achieving your dreams.