My wife stays home with my children. Because we are a one-income family, I started a business that I can work on from my home. It is a software development/consulting business that I work on after-hours from my day job.
The initial investment to start was $700, which covered the state and attorney's fees to set up an LLC. Not everyone needs to have that kind of entity, but because of the potential for liability, I wanted to have at least some protection in case of a lawsuit.
As far as marketing the company, the biggest thing that generates me the most money is a website designed specifically for people looking for contract software development work. It costs $20/year and has been the way all my largest paying clients have found me. I tried advertising my IT skills in the local paper, and in the yellow pages, and on several website with banner ads, with little or no results.
My advice to those starting a home-based business is to be very careful about your advertising. You will need to spend some money to get the word out, but any form of ad is very expensive (yellow pages, newspapers, etc). I also had some limited success in getting leads from Google Adwords, but if not properly done, this can be a big money loser.
Business is never easy, and there is no magic formula to get new clients. I've been through lots of hard knocks over the last two years, and spent more money on ads than I should have. Start small with your advertising, and if something isn't working, don't be afraid to drop it and try something else.
My fixed business costs are about $350/month, which includes telephones, Internet, liability insurance (as I understand it most homeowners policies do not cover business assets), and credit card processing fees. It's not too bad, and running it from home is certainly a good way to save money on rent and utilities at another location!
One other thing I've found is that if you accumulate assets, you may have to pay property tax on the business assets in the city or town in which you live. The rule of thumb in this area is to make sure that you keep good records and keep business and personal things separate. I have a dedicated room in my house for my "office."
"My Story" is a regular feature of The Dollar Stretcher. If you have a story that could help save time or money, please send it by mailto: MyStory@stretcher.com
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