Can You Afford To Own And Run Your Own Home Business?
Those struggling economically and those tired of the corporate rat race have a common dream "" to become an entrepreneur
. Indeed, at some point, everyone wants to be his or her own boss. But is that all there is? In a financial sense, what does it take to put up and run your own home business successfully? The answer lies in knowing what needs to be put up and matching that with a well of resources you have and are willing to risk as start-up and working capital.The 2 essential questions that need to be answered then are:
1) How much needs to be shelled out initially and on a recurring basis?
2) Can I fund the requirements of this endeavor until it is profitable and able to sustain its own operations?
In a nutshell, we are answering, ".How much do I need and when?" and "Do I have what I need to have and when I need it?"
Before you even do anything else, do a little homework by researching. Arm yourself with information to get the "big picture" scenario. Gather as accurately and as completely as you can all the necessary purchases or investments you would need to prepare for. I would recommend adding approximately 5-8% of the total for initial contingencies. Separate the "initial and one-time investments" from the recurring monthly disbursements. With this you have set-up the budgeted "investment and expenses" side of your business. If you can, I would recommend putting everything in a spreadsheet so you could project your cumulative cash outflows for each month and then accumulate it for the year.
Now comes the harder part. Determine how much you can comfortably invest towards your own business. It is best to use money that you already have. That implies any savings, surplus such an inheritance, endowment lump sums you have tucked away in a bank account, piggy bank or treasure chest someplace. I would strongly advise against taking out a loan on your credit card or drawing on an existing bank loan, unless this is something you have resolved to do because you have an absolute expectation that you will be receiving personal surplus funds in the next few days or weeks to pay off these obligations. Remember, the intention is to make money and not to spend it needlessly. If you choose to borrow or finance your business, you would have already incurred charges such as processing fees and interest expenses when you haven"t even started yet.
And don"t forget about the Big R "" It stands for "RISK". Risk needs to be acknowledged, understood, assessed and managed for that matter. It needs to be taken seriously because whatever it is you put on the line may have as much as four varying outcomes- it can grow exponentially, remain stagnant, erode incrementally or be lost entirely. The time frame within which any of these can happen can range from a few months to a couple of years. Consider this when you set aside the amount you determine as working capital. With successful ventures, revenues or sales received are supposed to be plowed back into your operations and the cycle repeats itself.
Your working capital is the "fuel" that funds your business. Without it, your hands are tied, and you are constrained to use only the "free option" alternatives. Use them as practically possible in advertising, marketing, selling and even in organizing tasks. Yes, these freebies can save you a great deal but mind you, the free alternatives can be very limiting and they also tend to exhaust another priceless resource"" your time and how you leverage it.
Whether or not you are currently employed, it is in your best interest to consider having your own business. Explore the many options out there and discern which ones are worth looking into. Initially, go for the ones with minimal or free entry costs. They are risk-free. Don"t give payment details yet if you are not fully sold out on the idea. Skepticism is healthy when it is used to exercise due diligence. Always keep both eyes open and minimize the guesswork. Do your homework as I suggested. Don"t start with the wishful expectation that money will come in easy. It doesn"t happen that way. This is a home business, not a genie. Even with some degree of automation, you will still have to give your personal inputs and attention to it to some degree. The ones that are "ready-to-go" are user friendly and can be a practical option. True, some options may be easier than others, but just like any other endeavor, they will require dedication, determination and effort to succeed.
Indeed, in this difficult economy, the home business model has proven to be financially rewarding. Consider it as a source of your second or third incomes. It could eventually replace the job you have now. Many people have already increased their daily and monthly incomes. Others have replaced their jobs. Will you be one of them?
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