There are a lot of things to say about opening a home-based business, and we have said quite a few of them: what it takes to quit your job and be successful as an entrepreneur, and how to market your business, cultivate loyal customers and apply efficient advertising and marketing strategies. However, for every truth said about home-based businesses, there are five myths running around on the internet. These myths are dangerous: some of them discourage people from trying to start their own business, while others make some people believe that they can get rich overnight without working too hard.
In today’s article we will deal with some of the most notorious – and dangerous – myths surrounding the whole process of starting and running a home-based business. It is important to be able to tell the fact from fiction, especially because a lot of people help spread myths in good faith – they actually believe them, too.
Remember, first and foremost, that any kind of business operation has an associated risk. In some cases it is greater, in others smaller – but the risk is there, woven in the fabric of doing business. You could barely break even, you could make a lot of money and live a comfortable life with your family, or you could lose your entire life’s savings. With this caution in mind, let us debunk the biggest myths related to home-based businesses:
1. You Can Start a Home-Based Business with Zero Investment and Capital
This is definitely a myth – and one which will make you wake up to the rude truth once you decide to actually run your business. First and foremost, you need to incorporate your business one way or another. Even if you want to run it in your name (and this is not advisable, as we have shown several articles related to tax deductions and insurance), you still need to register for taxation purposes. When you file documents you are charged various fees.
Next, you will probably run your business, even as a consultant, through a website. You will never get a single customer if you opt for free hosting and a free design template. Imagine if someone wants to convince you to hire them as an accountant or career coach from a website named www.johndoeconsultant.wordpress.com. Would you really trust that person?
So, once and for all, opening a home-based business does need an initial investment and start-up capital, even if in some situations it is very small (check our article on the top home-based businesses you can start for under $100).
2. You Do Not Actually Need a Home Office
If you want to be able to deduct some of your expenses from your taxes, you need to define a special area in your home as the place where you do business. Mixing business and personal expenses in your tax deduction will lead to an audit from IRS (and these situations never end up on favorable terms for you).
Leaving tax deductions aside, lounging on the sofa with the laptop on your knees will never lead to any productive work being done. You will be tempted to turn on the TV, strike a conversation with one of your family members, go to the fridge to grab a snack and so on. Sitting at a desk, in front of your computer and with minimum distractions around you, is the only way of getting in the right mindset for doing business.
3. People Do Not Really Trust Businesses Run from Home
Here is a little secret: unless you explicitly tell people that you run your business from home, in most cases they will not notice it. For example, if you are selling e-books, online fitness courses, or any kind of business which can be done strictly over the internet, people will never know or care to know whether you run this business from a regular family home or a multi-million dollar condo in the heart of the business district.
Leaving this aspect aside, home-based businesses are on the rise – and they are successful. All that your customers will want from you is to treat them fairly and professionally, and to offer them high quality products and services.
4. You Need an Absolutely Original Idea to Be Successful
Do you know how many home-baked cookie businesses are successful? Or how many photography, tax consulting and medical transcription businesses? There is nothing original in these business concepts, but they thrive – sometimes hundreds of them in a town. There is a constant demand for certain services or products, and there is always room for one more entrepreneur. You just need to do your research properly and select a niche where you can find customers for the long term.
5. You Can Get Purely Passive Income and Live off Them Comfortably
There is nothing like a purely passive income. Even as an affiliate marketer, you need to have a website or a blog and post interesting things on it to drive a lot of traffic in order to get any income from clicks or impressions. Anyone promising you instant get-rich schemes is either lying to you, or worse, trying to get you involved in illegal activities.