Start a Home Based Business (if you haven’t already done so) and Here’s Why
In this day and age economic down trend, an uptrend to start a home based business is spreading across this country and have become widely recognized as one of the most desirable businesses to start.
The Bureau of Labor Statistics says that out of 100 people that start working at the age of 25, by the age of 65…
- 1 is wealthy
- 4 have enough money to retire
- 63 depend on Social Security or charity
- 29 are deceased
What’s shocking about these statistics is …95% of people, age 65 and over cannot afford to retire …many will be forced to work until they die. What happened to safety and security?
In J. Paul Getty’s book ‘How To Get Rich,’ his first rule for success is, ‘You must be in business for yourself. You will never get rich working for someone else.’
This may be one reason why, according to Home Incorporated, every 10 seconds in the U.S. someone starts a home based business. Tens of thousands of people are waking up to the fact that there is a better way to make a living.
According to Success from Home magazine, there are three factors that are changing the landscape of how people make a living in the 21st century.
1. No Job Is Secure
The days of staying with one company for your entire career (like your father did) are over. In these days of frequent layoffs and downsizing, even state and government jobs no longer enjoy this “secure” status. Budget constraints due to a lack of consistent tax revenue coming in (the money that goes to pay for these jobs) have forced many of these people to consider other job opportunities.
2. Technology
The computer and the advent of the Internet has allowed small business owners to expand their reach for customers from a local business, limited to a certain geographic area, to a global enterprise almost overnight. The way we communicate today has little to do with where your office is located – millions start their own businesses right out of their homes. Even employers are seeing the benefits of having employees work out of their homes.
3. A desire to Take Control of One’s Future
For most middle-income Americans, living paycheck-to-paycheck has simply become a way of life. In Rich Dad, Poor Dad, Robert Kiyosaki talks about the long-term effects of this kind of lifestyle. “Financial struggle is often directly the result of people working all of their life for someone else. Many people will have nothing at the end of their working days.” A new generation of entrepreneurial-minded people is reversing this once inevitable subsistence by starting their own businesses. They are creating a better life for themselves and their families by taking control of their income.
I am a strong advocate of people starting a business, particularly to start a home based business. Here are some of the reasons why:
No boss
You are the boss. You get to make all the decisions. Decisions on what to work on (your passion), how to work them (your way), how much you want to work (your time), etc.. And, you do not have to put up with an upset, stressed out, procrastinating boss and answer to his/her demands and orders. Wouldn’t that be great?
Yes, you are accountable for the results as well. You take all the responsibilities. But you will have no ceiling on your earnings. And besides, when you are working on your passion, work will not feel like work. It will be something you look forward to. You will want to wake up early to get to work because you can’t wait.
No Commute
You don’t have to commute to work everyday and waste your precious time in rush-hour traffic or on public transportation. You will also have the freedom to spend more time with your family and friends.
Freedom To Work When You Want
The freedom to set your own hours to work is, in my opinion, one of the best reasons to start a home based business. This freedom is especially valuable for stay-at-home moms (or dads) who have children to take care of and need the flexibility in their work schedules.
Freedom To Work On What You Want
Starting your own business inspires your creativity as you involve yourself in the things that you love to do. You can be working on your passion and getting paid for it. It’s a great feeling to be in control of your life and doing what you want.
You Don’t Have To Quit Your Current JOB
You can always start out on a part-time basis until things get rolling and you’re able to replace your income from your job with the income you generate from your home based business. An added bonus here is that any losses that you incur in your start up phase (most businesses normally start out this way) can offset your other income (e.g. wages from your job, interest, dividends, your spouse’s wages, etc.) thereby reducing your tax bill (significantly).
No More Worrying About Your Job Security
You will no longer have to worry about the economy or corporate mergers that often results in “restructuring” and “downsizing”. Nor will you have to worry any longer about playing office politics just for the sake of your job security.
Small Startup Cost
Many traditional businesses require a heavy investment in equipment and office/retail space. When you start a home based business, you usually do not have these huge initial capital outlays. Of course, depending on how far you want to grow your business, you can choose to invest more into the business as the business grows. Still, the initial capital investment that’s required is far less than many traditional businesses.
No employees (or very few of them… maybe or spouse and/or children?)
With more and more regulations being imposed on businesses by the government, it has become an administrative nightmare. A serious business needs to hire specialists to keep up with the regulations.
Little, if any, chance of lawsuits
An ancillary reason for not having employees. Once you start to have employees, there are possibilities where they have to sue you for something (of course, they could very well be good employees, working hard with loyalty for you day in and day out). But, in this litigious environment, you really want to try to minimize that risk.
Much less overhead costs (compared to traditional businesses)
Overhead costs or overhead expenses refer to ongoing expenses of operating a business. The term overhead is usually used to group expenses that are necessary to the continued functioning of the business but that do not directly generate profits.
Overhead expenses are all costs on the income statement except for direct labor and direct materials. Overhead expenses include accounting, advertising, depreciation, indirect labor, insurance, interest, legal fees, rent, repairs, supplies, taxes, telephone, travel and utilities.
When you start a home based business, your overhead costs will be significantly less than a traditional, brick and mortar business, biggest item being rent. As you are working out of your own home that you already own or rent, there’s no additional cash going out, whereas a traditional business will usually rent out an office space, a wholesale/retail space, restaurant space, etc.
A Sense Of Pride
Wouldn’t you feel great to be able to tell your family and friends or just somebody you meet that you are an entrepreneur running and operating your own ‘home based business’?
Increase Your Confidence
Setting out to start a home based business from the ground up is an endeavor that will surely bring about many different challenges, personally, financially, emotionally, etc.. You are embarking on a mission without the certainty of outcomes and the risks involved. You will gain confidence as a person as you face and overcome these challenges.
The late Jim Rohn, who has been internationally hailed over the years as one of the most influential thinkers of our time, often mentions about this lesson he received from his mentor, Earl Shoaff:
“Set a goal to become a millionaire for what it makes of you to achieve it.
Do it for the skills you have to learn and the person you have to become. Do it for what you’ll end up knowing about the market place. What you’ll learn about the management of time and working with people.
Do it for the ability of discovering how to keep your ego in check – for what you have to learn about being benevolent. Being kind as well as being strong. What you have to learn about society and business and government and taxes and becoming an accomplished person to reach the status of millionaire.
All that you have learned and all that you’ve become to reach the status of millionaire is what’s valuable. Not the million dollars.”
Money is important. That’s the primary reason for most people to work at a job or to consider starting a business. We all need to pay our bills, put a roof over our heads and get something to wear. We also want to enjoy the good things in life and take vacations.
But what if you set a goal to succeed in business for what it makes of you to achieve it? Wouldn’t that be inspiring?
And finally…
Tax Benefits
Having your own business opens the door to significant tax benefits. Tax benefits that most people don’t even know they exist. Tax benefits that can save you tens of thousands of dollars every year.
And this is one of my specialties as a former Certified Public Accountant and a tax consultant.
Stay tuned… as I begin to reveal to you the tremendous tax benefits that are afforded to business owners (that are not available to employees e.g. W2 wage earners).
Hiro Kaneko
ex-CPA turned Online Business Entrepreneur
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