Home Based Businesses – Myth or Magic?

How to Find the Money to Fund your Home Business

2007-05-26T07:38:00.000-07:00

One of the most common objections heard when trying to recruit someone into a home-based-business is "I don't Have the money to invest." Depending on where you are in the discussion, you may have determined that this prospect either is not interested in your particular business, or is simply searching for excuses not to take any risks in life.

If that's the case, now may be the time to abandon your recruiting efforts. However, if the prospect seems to be genuinely interested and has the desire to take the next step, there are ways to fund a home-based-business without impacting their current budget.

The easiest method applies to those that are currently working an outside job and pay income taxes. Congress has passed laws specifically designed to encourage entrepreneurship and home-based-business, and they include immediate tax relief for these enterprising individuals. You can't use these laws just as a way to reduce your tax burden. In the event of an audit, you must be prepared to prove that you're actually working the business four to five days a week for an hour a day.

The laws allow you to estimate your business expenses and adjust your W-4 form to increase your take-home pay, which you will use to fund your ventures. The savings typically range from $4000 to $7000 per year - that's a minimum of $16 per workday (based on a 5-day workweek and a two-week annual vacation).

That amount is more than enough to fund most home-based-business, if you stay away from big-ticket items that promise great riches for little effort and systems that require you to buy huge inventories of product to sell to your family, friends, and neighbors.

Funding your home-based-business is crucial to your success. No commercial venture can be profitable without investing some money to get started. While most of your investment should be your time and effort, there will always be some sort of financial obligation involved. The money is there if you know where to look!

*Note - the tax information presented applies to U.S. taxpayers only. I recommend consulting with a tax professional for specific information to ensure that you're complying with tax laws...which can also be considered a business expense!

Basic Business Management

2007-05-22T09:43:00.000-07:00

Managing your online business effectively will save you a lot of time - and money. You don't need a business degree to be a successful online entrepreneur; you just need to know a few basic management principles.

Manage your time effectively and you will experience much less frustration in the overall management of your business. Schedule a timeslot for every business related task and stick to it as closely as possible…including the administrative tasks discussed here. It may seem like it takes a lot of time away from doing the things that will generate revenue, but in the long run the time you invest now will more than pay for itself.

Protect Your Business Assets!

2007-05-18T14:48:00.000-07:00

Your business revolves around information. Your financial records, business contacts, websites you've bookmarked, etc. Protect it well! Store the information you receive and generate in relation to your business in more than one place.

I recommend at the very least that you get an external hard drive and do a weekly backup of the data vital to the running of your business. There are also services available, some free, where you can store critical files. You can also burn the information to a CD and keep it at a friend or relative's house.

Your most important physical asset is your computer. Safeguard against accidental or deliberate damage to that asset by investing in the proper protection. Buy a surge protector for your computer, preferably one with a battery backup built in that will allow you to shut down gracefully in the event of a power outage. One can be purchased for less than $100, and will potentially save you a lot of grief.

And get a good anti-virus program! I personally recommend PCcillin by Trend Micro…I've used both of the other, more popular brands and have had my computer infected with viruses that I didn't even know existed.

Revenue is NOT Profit

2007-05-16T14:20:00.000-07:00

I see so many ads on the internet and have heard so many sales pitches talking about the money these guys are raking in, complete with screenshots of their accounts to prove they are getting rich. What you don't see in these ads is what it took to get that revenue in the door.

For example, if I pay $5,000 for an ad campaign and invest 100 hours of my time, and my sales revenue from that campaign come to $5,100…I just spent 100 hours of my life working for a dollar an hour. You get the picture.

Speaking of profit, the government is going to want some of it. When you get past the break-even point and start generating profits, make sure you tuck a percentage of it away in an interest bearing account so you can pay your taxes when they come due. Too many small businesses have had to shut their doors because they end up scrambling to find the funds to pay their tax bill when the time comes.

Tips on Managing Your Online Business

2007-05-13T08:52:00.000-07:00

The one place where many entrepreneurs stumble and fall is in the basic management of their business. Being successful in any business venture requires at least a minimal amount of management skill.

The most important thing is to keep track of your money! Knowing where your money is being spent, and how effective those expenditures are in generating revenue will often mean the difference between success and failure. At the very least, keep track of your cash flow on a regular basis - cash in, and cash out. No business on the planet can survive without knowing what their financial status is at all times.

Keeping records is a big pain…but not keeping records is an even bigger pain. When tax time rolls around and you need to figure out what kind of profit your business has generated, you will understand this completely. There are software programs available that will assist in record keeping for your business, or you can use spreadsheets to do it manually.

Record every expenditure related to your business. Website subscriptions, hosting services, educational materials, stamps, envelopes, paper, printer cartridges, etc. Keep track of the miles you drive related to your business; it is a tax write-off. Running a legitimate home-based-business will entitle you to deduct a portion of your housing expenses, whether you're an owner or still renting.

Stay tuned...more tips to come!

Believe in Yourself!

2007-05-12T15:38:00.000-07:00

"It's the repetition of affirmations that leads to belief. And once that belief becomes a deep conviction, things begin to happen." Muhammad Ali

Affirmations will help to keep away the demon of self-doubt and encourage you to keep plugging away. Develop a list of at least four or five positive affirmations and make it a point to repeat them throughout the day…and when the demon comes to roost on your shoulders, repeat those affirmations until he goes away!

"He who controls others may be powerful, but he who has mastered himself is mightier still." Lao Tzu

Desire, motivation, visualization, affirmations, and habituation will start you on the path to taking control of your own life and achieving the success you deserve. Here's one last quote to get you going!!!

"There are only two mistakes one can make along the road to truth; not going all the way, and not starting." Buddha

The short answer is – there are a lot of myths, and very little magic.

2006-08-17T20:05:00.000-07:00

The reality is that any home based business you choose is going to take some work on your part…and chances are you won’t get rich overnight. Some of the opportunities advertised are simply pyramid schemes disguised as a business, with specific wording included that takes advantage of legal loopholes that exist (for now).

The good news is that there are many legitimate opportunities advertised – in fact, so many that selecting one could drive a person crazy. So how does one go about choosing a home based business that will work for them? Ask yourself the following questions when determining whether or not a home based business that you’re looking at will be appropriate for you:

Does it sound too good to be true? If so, it may be…on the other hand, that should not be the sole determining factor in your decision. There is a lot of money to be made out there, and it is easier than you think.

Are you willing to do what it takes to recruit the way you’re being recruited? For example, if someone spends 30 minutes on the phone with you and gives you the hard sell routine, are you going to do the same? Many of these opportunities involve a great deal of phone time; if you’re uncomfortable with that you should look at something else…but keep in mind that whatever you choose, you will have to develop new skills and talents.

When someone is trying to recruit you for a particular business, ask a lot of questions about average operating costs, the amount of time and effort it will take to realize the profits they’re claiming, and details about the compensation plan. If they are reluctant to give you this information, there may be something fishy going on. Answers to these questions should not be part of the training process after you buy into the business.

Can you realistically make time to do what’s required? Don’t fool yourself into believing that you’ll do this in your “spare” time – most of us don’t have any…but if you are willing to cut out some of the leisure activities in your life (at least temporarily) you can be sure that down the road you’ll have more recreational time than you do now.

Many home based businesses require you to spend a lot of time interacting with your sponsor/mentor. Figure out if you like them…you may not like all the people you work with in your 9-to-5, but this is a little different. You are going to become a partner in many ways with your mentor, so be sure he or she is someone you are willing to spend time with.

Can you afford the initial investment? Using the rent money to start a home based business is risky – if you’re confident enough that you’ll recoup your investment in time to pay the bills, great – just be aware of the risks and have a fall-back plan.

These are a few of the important factors to consider when looking at a home based business – certainly not a comprehensive list, but an excellent place to start. Another important thing to keep in mind…almost every program you get involved in is going to stress personal development. There is good reason for this, and although some of the things they ask you to do may sound goofy (like telling yourself out loud every day how great and successful you are), the reality is that this concept has been around for a long, long time and has been proven to be effective.

So get out there and start your search!

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