Are you thinking about starting a home based business? The Australian Government says nearly one million Australians are running a business from home. Forbes reported that home-based businesses were quickly becoming the fastest growing form of business start-ups. With a slowing global economy this statistic can only be expected to grow.
What are the benefits of starting and growing your business out of your home? There are many benefits and each would appeal to you differently but here are my top five that I find to be key:
(1) Ownership – Yours to build and grow
(2) Flexibility – No commute and freedom to structure your working hours
(3) Taxation – Put simply…the system favours business ownership
(4) Low Overheads – Investment can be low, no large office lease expenses
(5) Leverage – Ability to leverage your efforts and scale up
I will expand a bit more on these and share some thoughts on why I think these are critical including some insights from work surveys…but first…
…a lesson I learnt from my dad
My late dad was an Accountant – I took after him, he worked long and hard for over 20 years in senior management for a Swedish ball bearing manufacturer. I got back home from boarding school one summer, and dad sat me and my older brother down to let us know that he had been “let go”.
Life quickly changed in a space of 6 months – moved out of the company house, no company car, no driver and no more executive perks.
It became clear that though dad had a great job employment by nature generally does not provide any “business equity” – he got paid his redundancy package (maybe a year’s salary) and that was it, back to the drawing board…which was starting a home based consultancy business in accounting.
This was my first encounter with the difference between business ownership and employment. You get to make your own conclusions here as to how you would respond to such a situation…I shared in a past blog how social welfare became an unwanted reality for me and my wife a few years ago when we went through the same scenario – how are you preparing yourself?
The five key benefits of starting a home based business in my opinion are as follows:
1. Ownership – Yours to build and grow.
Building a business means that you will be building equity for you and your family, if you work it right and event if it takes you say 20 years to really get it established, that is just under half of your working life, you can build a substantial enterprise that is willable, saleable and transferable.
The best time to start is while you are at the peak of your career which for most people is right now, start from your home and grow it from there – don’t just focus on building equity in your home, build some business equity as well.
2. Flexibility – No commute and structure your working hours.
A colleague said to me she spent about 2 hours last week getting home because there was two accidents on the major roads during peak hour…that’s happened to me several times before!
The abc reported that Australians on average spend close to an hour each day on the daily commute to and from work. A gallup survey reported the same for the average American commute.
You can save a lot of time and turn that into productive hours, you can work around your family and your own personal routine with your business hours structured around that. As your business grows you can structure and systemise it so that you free up more of your time. This will demand discipline but the flexibility is a real tangible benefit.
3. Taxation – the system favours business ownership
Any good tax accountant will tell you that the tax system favours businesses, there are a whole lot deductions that a business can qualify for that enables a better after tax take home pay.
If your situation qualifies you can benefit from many deductions including a qualifying portion (directly relating to your business) of your mortgage, property taxes, insurance, utilities, home office consumables, training expenses and even client related travel expenses.
Advanced tip: A tax good accountant will help you optimise your taxes further through advanced tax structuring that you can’t benefit from unless you are running an enterprise.
4. Low Overheads – Investment/ operating costs can be low
A home based business can generally be started with low capital investment and low operating costs. Working from the home, leveraging online connectedness reduces your risk exposure and explains why more and more people feel empowered to start a home based business be it full time or part time.
Office lease rentals and its associated sprinklings can be a debilitating cost for start-ups. A low cost base helps you factor those savings into having competitive pricing which is critical as you build market share.
5. Leverage – Ability to leverage your efforts and scale up
In a job situation you generally only get paid for the hours you personally work, a home based business allows you to leverage your efforts. As opportunity arises you can begin to grow in systematic and staged approach. You could even outsource some of the components of your business to free up more productive time, or even start to hire a team of people as you grow.
That’s the power of leverage – it can compound in your favour over time and help you impact more lives and champion more causes that you may be passionate about not just with your money but with your time and expertise.
Finally, if you structure and systemise your business right and pace your growth grow well, after a season of planting (maybe 5 to 7 plus years) you will be able to start freeing up some of your time while your business continues to grow without you.
This is only made possible in a business, and in my mind it’s a worthwhile pursuit – if you have that “inner itch” for it, start now, start part time – start from home!
To your success,
Got Questions? Send me a message here via my Contact page or email me today at firstname.lastname@example.org. Or Call +61 405 521 461
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I am a chartered accountant, an entrepreneur and a business coach. I am passionate about speaking to people on entrepreneurship and business – not just for people already in business but everyone who has a dream to be in business for themselves.
As a Speaker and Coach I train on the “Dream Maximiza Model” and the “13 Pillars of Success” under the label #BusinessGenerals. I also love to work with corporate professionals who are serious about creating a Plan-B income stream, without impacting full time career/business commitments.
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