Of the nearly 28 million small businesses in the United States, about half are classified as home-based enterprises. Each started as somebody’s dream and later became a thriving business.
Thinking of starting your own home-based business? Don’t let these six common misconceptions dissuade you.
1. It has to be a full-time operation. Starting a business doesn’t mean you need to quit your income-producing day job. Some home-based businesses start as a hobby, and some have owners who work another job until their company grows. Start small and, when your business is large enough to provide you with a steady income, turn it into a full-time endeavor (if that’s your goal).
2. You need a lot of cash. It’s true that some businesses require a lot of startup capital, but others need only a few hundred dollars. Consulting and service-oriented startups require very little capital, for example. If you’re planning to start a home-based business, don’t assume that you don’t have enough money. A little research should clarify this for you.
3. You need a lot of experience. Yes, there’s more to running a business than simply having a marketable product or skill. But there are plenty of resources available to help you learn about accounting, sales, or business registration. There are free mentoring programs through organizations like SCORE and helpful articles on sites like this one, SBA.gov, and many more.
4. It takes a lot of time. If your goal is to build a business that will be a leader in your niche, it’s going to take time. But your idea of what constitutes a “successful” business may be simply to support yourself or to earn extra income, not to dominate the market. A part-time, home-based business serving a few clients doesn’t have to consume all of your free time. One of the advantages of small-business ownership is your ability to control its size and your time commitment.
5. You’ll have tax consequences. Any income generated by your home-based business is taxable, but like other businesses, you can deduct qualified expenses to reduce your taxable income. Accounting software and business-related equipment, mileage, licenses, and insurance are all deductible.
6. Most small-businesses fail. According to the SBA, only half of all new business will survive for at least five years. That’s not an encouraging statistic, but this average encompasses all small businesses founded by people with varying degrees of knowledge and experience operating in various market conditions across the country. Careful planning, passion to succeed, and high level execution can tip those odds decisively in your favor. Don’t let statistics deter you from your dream.