How working 9-5 might be costing you more than you earn

This article is directed to all you parents out there
with pre-school children who would prefer to quit your jobs
and stay at home with the kids but think you can't because
you think you "need" a second income. Don’t be so sure.
That 9 to 5 grind may be costing you more than it’s paying
you.

Let's say you're a parent of two pre-school children and
you're earning $25,000 a year ($500 a week) in your full-
time job. Let's see where the money goes.

First of all, you don't have family nearby to care for your
children while you're working so you put them in daycare.
That takes care of $150 a week, leaving $350.

You need a car to get to work and your kids to daycare.
Let's be optimistic and say you have only a modest car
payment of $50 a week. Your other expenses are fuel,
insurance and general maintenance. Fuel is $25 a week,
insurance $10. Allow another $10 a week for new tires,
servicing and repairs. So $95 a week goes towards your car.
That leaves $255 out of your weekly paycheck.

You work in a professional office so you must dress
accordingly and be well-groomed. Allow $10 a week for
clothes and accessories, another $5 if you're female for
cosmetics and haircare. There's another $15 a week leaving
you $240 out of your weekly paycheck.

With so much to do to get the kids organized in the morning,
you don't have time to make your lunch so you buy it every
day. At $5 a day that's $25 a week. You're down to $215 a
week now.

And after putting in a full day at work you don't always
have the time or energy to cook a family dinner from scratch
each night and so once a week you pick up take-out on the
way home ($20 for four people) and spend more on
prepackaged foods at the grocery store each week. Let’s put
this at another $20 a week. This additional $40 a week for
convenience foods leaves you $175 out of your weekly
paycheck.

Still worth it, you say? Oops … forgot about taxes, social
security and health insurance! Better deduct another $100
a week for that little lot. Now you’re at $75.

Now, you tell me, is $75 worth working a 40 hour week for?
Is your time really worth as little as $1.80 an hour? And
that’s not even taking into account what your income does to
your partner’s tax bracket! Without being able to claim you
as a dependant it may put it over the top and the increased
tax paid on your family’s primary source of income could well
mean that the net contribution of that second income is a
deficit! If that’s the case, it’s actually COSTING you to
work outside the home.

If you find yourself in this situation, there is an answer
a home-based business. You can forget about daycare costs,
you’re there! How difficult do you think it would be to make
$75 a week working from home? Easy! In fact, it would not
be difficult to generate the same level of income from your
home business as you were generating from your full-time job.
But because you don’t need to incur the unnecessary expenses
such as daycare, vehicle expenses, clothing and food, you can
be MUCH better off. Not only that, you can now claim home
office tax deductions! And all of that’s just focusing on
economics. Factor in lifestyle and family issues and a home-
based business can literally take your life back and give
you back to your family.

Choosing the right home business

Pay any attention at all to your email inbox and you'd be
forgiven for thinking that the only way to run a business
from home is on the Internet. Sure, many people are
running spectacularly successful Internet-based home
businesses. Many, many more are doing so even more
spectacularly unsuccessfully.

But what if you're not interested in running an Internet
business? What if you want to start and run a home
business the old-fashioned way? Where do you start?

Actually starting any home business is the easy part.
The hard part's deciding what that business should be.

So how do you even start the process of deciding on the
right home business for you? The key is to be methodical,
realistic, objective and patient.

Step 1 : Personal Inventory

The first place to start is to inventory your skills,
experience, interests, and personality characteristics.
These are what you have to work with - your raw
ingredients, so to speak.

Make a list of personal qualities and factors that you can
throw into the mix. Include things like:

=> your personal background;
=> training and education;
=> work and volunteer experience;
=> special interests and hobbies;
=> leisure activities;
=> your personality and temperament.

All of these qualities and factors make up what you know
and what you're good at.

Step 2 : Identify What You Like

It's one thing to know a lot about something or be good at
it. It's quite another to enjoy it enough to want to make it
your life's work. So, remove from the list you created in
Step 1 anything that you don't really, really like doing or
which plain doesn't interest you. No matter how good you
are at it. If you're lucky enough to like what you're good at,
as a general rule, stick with what you know.

Step 3 : Match Your Likes With Marketable Activities

If Steps 1 and 2 still haven't suggested feasible home
business ideas, review the following activities that have
proven marketable for others and weigh them against
your "likes" from Step 2:

Crafts - pottery, ceramics, leadlighting
Health and Fitness - aerobics instructor, network marketing
for a health products company, home health care
Household Services - cleaning, gardening, shopping
Professional Services - attorney, architect, interior
designer
Personal Services - make-up artist, hairdresser
Business Services - business plan writer, meeting planner
Wholesale Sales - antique dealer, dropshipper
Retail Sales - children's clothing, widgets
Computers - web design, internet training.

You get the idea. This is not an exhaustive list, obviously.
You can visit the AHBBO Ideas Page for a list of over 500
home business ideas at http://www.ahbbo.com/ideas.html .

Step 4 : Make a List of Business Ideas That Fit With Your
Likes From Step 2

By the time you're done, you'll have a hitlist of possible
matches between your skills and interests on the one
hand and home business ideas utilizing those skills and
interests on the other.

Step 5 : Research

Armed with your list from Step 4, identify those ideas that
you think have marketable potential and then research
whether that belief is accurate. In order to have
marketable potential, the idea must satisfy the following
criteria:

=> It must satisfy or create a need in the market. The
golden rule for any business is to either find or create a
need and then fill it.

=> It must have longevity. If your idea is trendy or faddish,
it doesn't have longevity. Go for substance over form in
all things.

=> It must be unique. This doesn't mean you have to invent
something completely new but it does mean that there has
to be some *aspect* of your product or service that sets it
apart from the competition. This is easy if you go for the
niche, rather than mass, market. Don't try to be all things
to all people. You'll only end up being too little to too many.

=> It must not be an oversaturated market. The more
competition you have, the harder it will be to make your mark.
It's unrealistic to expect no competition, of course. In fact,
too little competition is a warning sign either that your business
idea has no market or that the market is controlled by a few
big players. What you want is healthy competition where
it's possible to differentiate yourself from competing
businesses.

This all gets back to uniqueness. If you can't compete on
uniqueness, you must compete on price (or convenience).
If you're forced to compete on price alone, that just drives
down your profit margin. Not smart business.

=> You must be able to price competitively yet profitably.
The price you set for your product or service must allow
you to compete effectively with other businesses in your
market, it must be acceptable to consumers and it must
return you a fair profit. If any one of these three is off,
move on.

=> Your business must fit with your lifestyle. If you're
a parent of young children and you primarily want to start
a business from home so you can stay home with them,
a real estate brokerage business that requires you to be
out and about meeting with prospective clients is obviously
not going to work.

You'll instead need to choose a business that can be
conducted entirely (or near enough entirely) from within the
four walls of your home office. Similarly, if your business idea
would involve having clients come to your home, you're not
going to want an unruly 3 year old underfoot as you're trying
to conduct business.

=> Your financial resources must be sufficient to launch and
carry the business until it becomes profitable. No business is
profitable from day one, of course. But some are quicker to
break even than others. If your business requires a
considerable initial capital outlay to start - computer, printer
and software for a web design business, for example - it will
take you longer to break even than if the only prerequisite
was the knowledge inside your own head, such as working
from home as an attorney.

If your financial situation is such that you can't afford to quit
your day job until your business is paying its way, this, too,
will mean it will take longer to break even than if you're able
to devote every waking hour to your business. Just do what
you have to do. That's all any of us can do.

Step 6 : Business Plan

Once you've gone through the above process and identified
what appears to be the right business for you, the final "gut
check" is to write a business plan for your business, much as
you would for a presentation to a bank for financing. Include
sections for strengths, weaknesses, opportunities and threats,
and set goals for what your business needs to achieve for
you, by when, and how you are going to get there.

There are plenty of good resources online about how to
prepare a thorough business plan.

Although it may seem like a waste of time and effort to
complete a business plan if you don't intend to seek outside
financing, taking the time and exercising the discipline needed
to really focus your mind on the important issues facing your
business, you will be forced to take a long hard look at your
idea through very objective and realistic eyes.

If your idea passes the business plan test, then you can be
reasonably confident that this is the right business for you.
If you come away from this exercise feeling hesitant,
uncertain and unsure, either do more research (if the reason
for your hesitancy and uncertainty is lack of information) or
discard the idea (if it's because you don't think your idea is
going to fly). If this happens, just keep repeating Steps 5
and 6 until you end up with an idea and a business plan that
you're confident is going to work!

Although it's frustrating to wait once you've made up your
mind to start a business from home, this really is one situation
where the tortoise wins the race. By taking a methodical,
systematic and disciplined approach to identifying the right
home business for you, you give your business the best
possible chance for long-term survival, hopefully avoiding
some very expensive mistakes along the way.