Whether you are looking to spend more time with your family, want to pursue a passion, or you’re just fed up with your boss’ incompetence, starting a home-based business can give you the freedom and personal satisfaction you crave.
As enticing as the idea of being your own boss is, it is also important to understand the potential challenges that come along with running your own business from home.
We’ll look at 11 benefits of a home-based business as well as 3 disadvantages so you can make this most informed decisions possible when starting your home business.
Advantages of a Home-Based Business
This is one of the biggest benefits of running your own home-based business: you set your own schedule. If you only want to work in the mornings so you can spend the afternoon with your kids when they get home from school, you can. Want to take a vacation? You don’t need to worry about time-off requests. You can just pack up and go. Need to run to a doctor’s appointment. Go ahead. No need to bring back a doctor’s note. You have complete control over your schedule.
Lower Overhead Costs
Think about all the costs associated with a typical brick and mortar business: rent on an office space or storefront, development or retrofitting costs, utilities, internet, phone lines, furniture—the list goes on and on. With a home-based business, you don’t have to worry most of these expenses. This greatly reduces the ongoing cost needed to run the business and allows you to invest these savings back into your business.
Less Financial Risk
Any new business comes with risk, but by minimizing startup costs and ongoing overhead costs you can mitigate some of this risk. Because there is a smaller financial barrier to entry, you can recoup your initial investment quicker. Also, if for some reason you need to close the business, you won’t be locked into a long-term lease or other financial obligations that can strap you for years to come.
Test the Waters
A home-based business allows you to dip your toes and see the viability of a business and if it’s something you really want to pursue. Again, because startup costs are low, you can test out an idea before making a large investment. You can even start working your business part-time while you maintain your current job.
A home-based business can be nimble and adapt to changes or opportunities quickly. Because you call all the shots, you don’t have to go through layers of approval. Plus, because you are not tied to a physical space, you can scale your business up or down more easily.
Raise your hand if you enjoy sitting in bumper to bumper traffic every day? Didn’t think so! Commuting is no fun can add hours to your workday. Plus, the cost of gas or public transportation can add up quickly. When you work from home, you only have to go a few steps to get to your office. That’s more time back in your day and more money back in your pocket.
Pursue a Passion
Odds are if you are willing to invest the time and energy into starting a business, it’s probably something you’re passionate about. Owning your own home-based business allows you to truly dive into your passion and make it part of your everyday life. This can be incredibly rewarding and bring a great sense of personal fulfillment.
Every Day is Casual Friday
It’s a good idea to at least put pants on, and if you are meeting with customers, you’ll want to look presentable, but outside of that, you have the freedom to dress how you want—no corporate dress codes to worry about.
You’ll want to talk to your accountant or tax pro, but many home business owners can deduct a portion of their home expenses when filing taxes. This may include part of your mortgage interest, property taxes, utilities and home maintenance. That equals more money back in your pocket or toward your business.
Keep Your Money
There is a saying that the harder you work, the more money your boss makes. With your own home-based business, any profits generated from your work come straight back to you. You can invest these profits back into the business or put them into your bank account. You earned the money. You can decide what to do with it.
You Are in Charge
The buck stops with you! This is one of the main reasons people start a home-based business. As your own boss, you get to call all the shots and determine how the business is run. No nagging bosses or micromanagement. The decisions are all yours.
Disadvantages of Starting a Home-Based Business
You Are in Charge
As liberating as this can be, it also means you have to deal with everything. Angry customer? It’s your responsibility to deal with them. Delays with a supplier? You have to figure out an alternative. There’s no punting to anyone else. The buck stops with you!
Hard to Separate Work from Home
When your home is your work and your work is your home, it can be hard to distinguish the two. You’ll want to make sure you set up expectations with your family about when you are working and make sure you take time to disconnect.
When running a business from home, you miss out on some of the social interactions that come with working in a traditional office. You can still build meaningful relationships with customers, but you won’t get the daily watercooler talks with coworkers. (This can be a plus for some.)
Start a Business from Home
Looking for more helpful tips about starting your own home-based business? Download the free starting a business from home checklist and get started today.