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075: Five Key Benefits of a Home Based Business (w/ Davis Mutabwa)

As corporate downsizing continues to make news and the internet makes telecommuting ever more productive more and more entrepreneurs are discovering the benefits of running businesses out of their homes. If you are looking to get out of the rat race, to spend more time with family and friends, and to live a more balanced life, a home-based business may be the right decision for you.

Home-based businesses are quickly becoming the fastest growing form of business start-ups. Growing your business out of your home allows for flexibility that is difficult when renting or buying office and warehouse space. Although

working at home requires self-discipline, the benefits can be substantial-especially in the start-up years.

Starting a Home-Based Business

Nearly one million Australians are running a business from home according to the Australian government. 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.

Benefits of starting a Home-Based 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

Personal lesson

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 have shared in Episode 077: Five Things Redundancy Social Welfare Taught Me, how social welfare became an unwanted reality for me and my wife a few years ago when we went through the same scenario

The 5 key benefits of starting a home-based business

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 even 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 were 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 systemize 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.

Tip: A tax good accountant will help you optimize 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 an 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.

Final comment

If you structure and systemise your business right, and pace your growth 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!

Get Your Hopes Up and Maximize Your Dreams 🙂

Cheers,
Davis!
#TheBusinessGeneralsPodcast

 

About the author, Davis

My Dream of sharing inspirational success stories started many years ago and this Podcast is an amazing show that brings some of those conversations to light.

This show is dedicated to being a voice of encouragement to you because I believe God created you and I with a purpose to fulfill and I want to be here to cheer you on through this Podcast, our Blog and through our other channels of interaction via our comments section after each Podcast and Blog as well as on social media.

I love business and entrepreneurship and I truly believe you have greatness inside of you 🙂