A recent report suggests that approximately seventy percent of home-based businesses will last over a three-year period, compared to twenty-nine percent of other business ventures. With estimates of the total number of home-based business ranging from thirty-four to thirty-six million, it’s clear that home-based businesses offer a less expensive alternative to traditional businesses.
Only twenty-seven percent of millenials and thirty-three percent of all other age groups work exclusively in a traditional office setting according to a survey by Staples Workforce. What was even more telling in the survey is that over half of the respondents considered working remote from home as a critical consideration when applying for work or bidding on a potential job in the freelance industry. As the job market shifts towards preferring to work at home, the gig economy will be supporting the growth for home-based businesses over the next decade. Here are some of the primary advantages of home-based businesses:
Lower Starting Cost
Forty to forty-four percent of all home-based businesses require less than $5,000 for startup costs. Many business owners often use their own savings to cover this expense, while others ask family or friends for a loan. There is a growing movement to seek funding to start a home-based business on crowd funding platforms like GoFundMe.
Most traditional office-based start-ups have lots of deposits required to begin operations such as rent, utilities and insurance. Home-based businesses can often limit costs to that of creating a website, purchasing a strong customer relationship management software, and setting a budget for pay-per-click advertising to begin generating traffic to the website.
Businesses that operate out of the home can deduct a portion of their home’s operating expenses in addition to the depreciation expenses on the home as business expenses. In other words, you can apply a percentage of the property taxes, vehicle, insurance, electric and water, phone and internet, mortgage, or maintenance expenses consistent with the portion of the home you use for business purposes. If you itemize your personal taxes, this can lead to a significant tax advantage.
A study by the United States Federal Highway Administration found that the average United States citizen spends about 348 hours each year commuting. These hours are now free to use for business strategy or personal use as you see fit. Home-based businesses give owners the freedom to choose the hours they work and the pace of operations. Home-based businesses don’t have special dress codes, office politics or bosses to be held accountable to.
Equal Opportunities for All
Women-owned businesses are being created at about twice the rate of male-owned business. Many women choose to create home-based businesses to allow them time for dual roles of both mother and entrepreneur. This allows them the time to spend with their children while allowing them a supplemental source of income.
A recent IDC survey indicates that the average income for income-generating home office households is $63,000 a year. Entrepreneur magazine estimates that $427 billion is generated each year by home-based businesses.
As a recap, lower formation cost, tax advantages, personal freedom, and equal opportunities are only some of the numerous advantages of starting up a home-based business. Now is the perfect time to start your own home-based business and become the successful entrepreneur you always wanted to be. Your business can be one of the many home-based businesses that contribute to the $3.3 trillion globally in the ecommerce sales market.
If you are looking to take the plunge towards forming a home-based business, the first step is to be sure to file the legal documents needed to be a legitimate business. If your business needs help filing sole proprietor, partnership, limited liability company, or corporation paperwork please contact us directly at BryteBridge. We have helped over 30,000 businesses file initial paperwork over the last fifteen years.