When people are having trouble getting ends to meet, an especially common occurrence in today's economy, there are a couple of things they turn to help them out. One is a payday loan - often more trouble and more dangerous in the long term than they are worth - and the other is by working a part-time job, or even more than one, as well as a full-time job.
It can be a much better idea to set up a part-time business from home instead of getting a part-time job in addition to a full-time one.
Pros and Cons
One admitted problem with setting up a business in comparison to a part-time job is that the part-time job will more than likely bring money in much faster and in less time than a part-time business normally will. With a job, you will start earning the day you start working, whilst with a business, especially the right sort of business, initially you will be spending time building it.
Credit: MorgueFileA part-time job on the other hand will likely have added travel expenses and loss of time in comparison to a business you run from your own home which will erode the money made from the job, as some will be lost in non-refundable expenses, as well as losing more time that can be used for recreation or spent with your family. Some downtime is necessary in the long run.
A further problem is that, no matter what, there are only so many hours you can work, and if all you are being paid for is the work you do eventually you will run out of hours or max out your potential income. Working every single hour, or expending it on a work related matter, will eventually take a health toll too.
The greatest advantage a part-time business of the correct type has is that it could even develop sufficiently to actually replace your full time income, and quite often it will do so in less hours per week than a full time job would require. This should certainly be the aim.
A common problem with working from home is time lost due to other people. It's often difficult to get family and friends to understand that you being at home does not mean you aren't working, and you may have to deal with constant interruptions. These must be dealt with as politely as possible, subtly reminding people that you are actually working and need to get back to work. The phrase "I must get back to work" can be a good one to use.
What Sort of Business?
There are many possibilities for part-time businesses you could start. As mentioned earlier, you want to look for one that provides residual income so that you do the work once and then get paid repeatedly. These are only some of the ideas for potential part-time businesses. There are many more, and these can also be divided into different types.
You may initially want to consider a combination of work for immediate pay as well as work for future cash flow, especially if money is tight. Some immediate money now, rather than further down the line, can make a big difference, but you don't want all your work to be like that.
Network marketing, also known as multi-level marketing, had a somewhat deservedly bad reputation in the past due to unethical, or simply badly run, companies during its early days and even now still, like any industry, has companies that are not run in a decent manner. It can be with a correctly selected company a very good way of increasing your long term residual income. Unlike many traditional businesses, such as franchises, it has very low entry costs.
The product of your selected company needs to be suitable for repeat purchase and consumable. No matter how good an item is, it won't improve your long term income if it's only an occasional or one off purchase.
There are many ways of earning online. You can earn money from writing by signing up for writing sites such as InfoBarrel, although a reasonable command of English, for English language sites, is needed. Using these you can increase you income by sharing your expertise, especially if it's on a subject that other people are searching for information on.
Setting up your own website is also a good idea, although you may wish to have some income coming in from other sources first in order to pay for this, but initial expenses for a small site are likely to be low. A good niche site can by itself be a decent source of income. A site should be as automated as possible.
The income can be generated from various affiliate programs. AdSense and Amazon are two of the best known, but there are many others out there. Various sites such as ShareASale and ClickBank have entire collections of products and affiliate programs you can join.
Property, or real estate, investing has long been a popular part time business, as it offers the potential of leveraged capital growth as well as an additional stream of income. Recent problems with the Credit Crunch combined with a fall or stagnation in property values highlights the need to take care when purchasing a piece of investment real estate and to do all the necessary research and cash flow analysis required on any property. When everyone is buying property, that's probably an indication that the market is inflated in value and should be entered extremely carefully.
A property must, at the very least, break even after taking into consideration all its associated expenses, including but not limited to mortgage payments, insurance, repairs and maintenance, taxes and loss of revenue due to vacancy. Don't purchase a property expecting to make your money from the capital game; make your money when you buy it. A house that covers all its expenses but never goes up in value will still be profitable in the long run as the mortgage is paid off by the tenants.
The purchase, renovation and rental of houses that were in poor condition when they were bought can be ideal for the more practical buyer, especially those who, through their normal job, already possess the skills needed to do most or all of the renovation work themselves.
DISCLAIMER: The following remarks are made for illustrative purposes and do not constitute actual tax advice. Tax laws vary from country to country and even between state/region/province within a country. Before trying to cut your taxes, it is essential that you seek advice from a competent professional advisor for your tax planning. The difference, in the UK, between (legal) tax avoidance and (illegal) tax evasion can be quite slim, and this work should not be done by an amateur.
A home based business can have potential tax benefits. With a wage, everyday costs such as household or vehicle are paid with after tax money. The government first takes its cut, and then you pay for them out of the remainder. By running your own part-time business some of these costs can become tax deductible; in other words some, or all, of a variety of expenses can be deducted from your tax bill. A percentage of your household costs can be used as a valid tax deduction, and the same with your vehicle if you use it for work - although these may have insurance consequences. A meal out can become a deduction if done whilst meeting clients; so can a vacation if some business is done on the trip. These must all have valid business reasons to be done, and not merely be there to save money on your taxes. This is where a good accountant, or similar tax professional, will pay for themselves by legally saving you more money in taxes than they cost to hire. Good accountants don't cost money, they save money.
To help take advantage of any possible tax benefits you need to keep good records. Again, an accountant can set you set up an easy to manage system that can be done in a few minutes per day, if you lack the knowledge on how to do it yourself. If you are too busy to keep any records, you really shouldn't be working for yourself, as this will eventually come back to haunt you.
Don't Build a Part-Time Job
It's all too easy to end up building yourself another job, rather than building a business. This is especially true if your new business is in an area where you have an existing competency, perhaps through your primary job. The objective should be for your part-time business to help "To create a lifestyle that does not require my presence."
To avoid creating a job for yourself that can be even more tying than a part-time job working for someone else, it is important to build a system for your new business, especially if your business has the potential of requiring employees in the future. With a system in place, any job can be done by simply following the system. This has worked well for McDonalds.
Consistency is Key
Building your part time business consistently is one of the most important things you can do, beyond the obvious things such as building it legally and profitably. Even if you don't have much time, perhaps you only have an hour a week, consistently using that hour in a constructive fashion will, slowly but steadily, build your business.
Do Your Due Diligence
Due diligence has a specific meaning related to businesses but it also has more general meanings regarding how you act. Basically, it can be understood to mean do the proper research first. It's far better to discover any potential problems before you invest money and/or time, rather than after.
Whatever area you decide to look into for a part-time business, do the necessary work before hand, but remember that you will need to take action on it. There's little point spending all your time researching if nothing ever comes of it.
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