Home-Based businesses have exploded in the U.S. generating more than $28.6 billion in US revenue according to a Woman’s Day article. Who is not familiar with the names, Mary Kay, Pampered Chef, Scentsy, Silpada or has not attended an in-home party?
The attractions of home-based business are many, like being your own boss, flexible working hours, working from home, and rewards for productivity. But be mindful, to be successful a home-based business requires the same hard work, focus, and planning as a brick and mortar business. The success of a home-based business is dependent upon a firm sense of direction, the amount of time and focus the consultant is willing and able to invest, and a realistic budget plan.
Before jumping in to a home-based business, assess your business and financial goals and objectives, translate them to a measurable plan, and track them. How much of the product does the consultant need to sell to turn a profit? What are the start-up expenses? It is critical for the home-based business to develop a budget for both Income and Expenses and track progress. A budget for a home-based business need not be complex or require professional software. It can be as simple as using an Excel spreadsheet. Microsoft offers many Templates to help set up basic budgeting categories for both income and expense planning. eHow provides step-by-step directions for Building a Budget that can help the consultant assess if income exceeds outgo (expenses).
Understand the Income side of the budget. How much product needs to be sold to offset expenses? Carefully track customer order slips both from on-line and home parties; keep track of leadership bonuses, and other company perks. What are your expenses? What is the start-up cost? Include inventory–does the company require the consultant buy a certain amount of product each month or quarter? Consultants will incur promotional and advertising costs, travel expenses, gifts for customers or charities. It is important to understand what the breakeven point is for the business you are considering and how long it may take for you to actually reach the level of income that the business opportunity claims is possible.
For every six figure home-based business, there are many more earning an average of $2400/year. A business is truly successful when hard work comes together with sound financial planning and measurable profit. With forethought and planning, a home-based venture is capable of becoming a successful, income earning, business that gives the consultant the best of two worlds, working from home and running a business.