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So you want to start a home-based business without breaking the bank, but you aren’t sure how to go about it. The good news is, starting a home-based business on a budget is entirely possible.
There are many decisions to make and a number of items are required. Some of these items could be expensive by themselves; all of them together even more so. We’re Frugalites! We hate to spend money, let alone lots of it. But sometimes we do what we must do because it can take money to make money. This article will give some ideas about how to acquire the items you need to run your business without breaking the bank.
Research building your home-based business on a budget.
I’m assuming that you’ve done your research at this point. You know what kind of business you want to be in, you’ve done some market research to be sure your idea is viable, and who your competitors and customers are. If not, these things are mandatory. Before starting my freelance publishing business, I spent a good six months researching. I hung out on discussion boards, learning about everything from dedicated software packages to accounting & taxation to how I might find & approach prospective customers.
Since I had no direct publishing experience I had to sell my college degree. I had researched and completed a book indexing course, discovered the professional organizations, and learned that freelancing is an incredibly competitive business. I had also learned how I might find contact information for my prospective clients and how I might approach them. I prepared a resume and contact email, and scheduled two hours per day for sending emails. All of this cost time but very little, if any, money.
My needs were pretty basic at first. I needed a computer and an internet connection. Since I already had both, these weren’t exactly new expenses. If you’re reading this article, chances are that you have both, and free is good. Use what you have before buying. What to do however, if you don’t have a computer suitable to running your business?
There are a number of ways to acquire a computer
I believe in good equipment, especially if my livelihood depends on it, but that doesn’t mean break the bank. Used machines are best purchased from a reputable retailer unless you’re very confident in your fix-it skills. Big box stores, including Amazon and eBay, carry many machines both new and used. The Apple refurbished store is also a great source but of course, Macs are more expensive. They’ll pry mine out of my cold, dead hand, but a Windows machine can serve well.
I started my business on one, in fact. At one point I needed a Windows machine to run certain utilities and found a refurbished machine for $135 on Amazon. Once set up, the total cost was $300. I made thousands of dollars on that machine! How’s that for return on investment?
Your internet connection will depend in part upon what’s available, but I suggest not to be cheap here either. Whether I was downloading PDF files for indexing or uploading pictures for my eBay sales, dial up was slower than molasses in January! Since time is our one true asset, I suggest using good internet. I have broadband, which isn’t cheap monthly, but the time it saves well makes up for the out of pocket cost. If dialup is all that’s available in your situation, adapt and work with it.
How about office furniture?
Desks and chairs should be ergonomic if at all possible; your back and wrists will thank you! These can all be acquired very cheaply, anywhere from Office Max to Goodwill to eBay. I bought my first chair on eBay, in fact. Other things were purchased locally. I enjoy supporting small businesses in my community, and it’s often cheaper. Many of today’s corporations, for example Microsoft, started in a garage using what they had available, including furniture. If you already have something that suits the need, go for it. You can always upgrade later.
Software: accounting at least!
You’ll have to keep track of sales and other tax-related items. Some use a spreadsheet successfully and bonus! Most computers come with one natively. Otherwise, it’s possible to buy older versions of many of the most popular packages. One note of caution: I do not purchase software on eBay! I’ve had too many bad experiences. Pirated software is rampant there and difficult to detect. While we’re on the subject, I also refuse to deal with any eBay seller who’s positive feedback percentage is less than 99%. Life is easier this way.
What else does your home-based business require?
For mine, very little. I didn’t even need business cards. But if you do, it’s likely worthwhile to research some options. Remember, your business card is a form of advertising. All advertising should contain three elements: who you are, what you do, and how to get in touch with you. Images are very powerful but should be kept simple, partly because printing gets expensive the more colors, text, etc. Can you print good business cards out on your computer? I have a stand-alone printer/scanner/copier/fax for these things. These things are very cheap new but can be purchased used in some cases.
Websites are the new business card, and they’re neither terribly expensive nor difficult to construct. They’ll be a bit more expensive if you’re using features like a shopping cart, but look around! If you’re at all technically savvy, a good website that offers an automated builder can run less than $200 per year, and mine included a domain name and email to boot.
And yes, it’s usually a qualified tax write-off
Don’t be lured into the cheapest, Unix-based package unless you’re familiar with Unix however. Remember, time is our one true asset. Don’t spend it gritting your teeth trying to figure out a WYSIWYG. Spend a few extra bucks for the website builder.
Speaking of taxes, the IRS prefers that business transactions are kept separate from personal affairs, but there are cheap ways to do this. My bank gave my very small business a free checking account, and yours might also. Be sure to read the conditions carefully however! My free account will cost once I go over a certain number of transactions per month. Other than clearly business expenses, I use my personal checking account. Also free. Since my legal structure is sole proprietor, paperwork is minimal.
Do you really need an accountant?
Those are expensive and can be very detrimental if they’re dishonest. I do my own taxes, painful but much cheaper and much more trustworthy. Software helps and usually counts as a write off; granted it would be more fun to keep my entire dollar, but getting $0.38 back is something at least. Since I don’t depreciate anything, I do use the home office deduction, which in my case allows me to write off a portion of just about everything home-related. It wouldn’t hurt to check your personal situation with a qualified tax advisor however. Everyone’s situation is different and the IRS isn’t helpful.
Does your home-based business require reference books?
I found mine in used book stores, thrift bins, and my local library’s used book sale. The most common way to find contact information for my prospective clients is a book titled The Literary Marketplace. I checked out last year’s edition from my local library. Will you need packing materials to ship items? Look around your home and improvise, using what you have. I’ve seen some crazy cheap ways to do things on this board, and I have faith in you!
Be cautious when getting things online
At this point we’ve discussed sourcing the needs of your home office from three different places: locally, Amazon, and eBay. The latter two especially require caution. Neither one does much to vet their sellers and it’s very easy to get ripped off if you’re not careful. For example, I can buy seeds on Amazon to grow the brightest, metallic blue Venus flytraps I ever saw! The only problem is, the listing is a scam. There’s no such thing as a blue flytrap. As I mentioned before, pirated software runs rampant on eBay.
It’s worthwhile to check things out a bit no matter who you’re buying from online. However, keep the same healthy skepticism you’d keep when buying dishes out of the back of some guy’s van in a parking lot. (I really did that once, got a good deal and used them for years but I knew very well it wasn’t Corning!)
Ready to open your home-based business on a budget?
It’s very possible to start a home-based business using the equipment you currently have. If you need to buy something, it’s fairly straightforward to find a good deal. But there are certain guidelines that I’ve found useful, as given in this article to start your home-based business on a budget.
Have you already started a home-based business on a budget? Share your helpful and frugal tips with other readers. Have any of you wanted to open a business but were deterred by expenses? Let’s talk about it in the comments section.
Good luck and good business!