Strategies For Your Home-Based Business
For most small business owners, running a business from home is about more than just making extra money; it is also about freedom and a better lifestyle. It is about creating income streams that allow you to live the life you want, rather than being trapped as an employee working to put money in someone else's pocket. Home-based businesses can become successful enough that you never need to work again.
But to create a successful home based business that can achieve all this it is important to understand the difference between different forms of income: linear income, passive residual income and leveraged income.
A linear income is the sort of income you get by working at a job. You work a number of hours and get paid so many dollars an hour. This is the way most people earn an income and if they don't work, they don't get paid so they end up spending a whole lifetime working for someone else and earning an hourly rate, only being able to stop when they have enough of a pension pot to retire. Being a faithful employee is certainly not the best way to earn a living and even people with high paying jobs are still at the beck and call of their managers and bosses -- there is usually very little autonomy in a job or control over your income. This is why so many people envy the lifestyle of an entrepreneur and want to set up their own home based business. However there is still a place for a linear income in a small business even if it is paying others to work for an hourly rate for you.
Passive residual income
A passive residual income allows people to achieve amazing success as a home-based business because it is income that repeats and keeps coming in without any further effort on your part. You may work very hard to set something up, but then the income just keeps rolling in week after week. That's not to say that you don't have to spend any time and effort developing your business or marketing it but it is a fabulous way to earn your money. A passive residual income can be achieved by networking, for example having affiliates working to sell your products. It can also be achieved with products such as digital books, where once the book is written and a system in place to sell it as a downloadable product, such as a Kindle book, no further effort is required apart from marketing – the customer pays and automatically obtains a digital copy of the book and you collect the money.
Leveraged income is usually based on the efforts of other people -- usually these people earning money by way of a linear income and this can be achieved in various ways such as employing people to work in your business, franchising your business or outsourcing work to virtual assistants. It can be very lucrative and a business that is leveraged by franchising, for example can produce huge profits in a very short time.
Develop a strategy
From these various ways of earning money from a home-based business, you can develop your own strategy for your business. Perhaps you could earn a linear income as part of your business by working from an employer part-time or consulting for other companies, for example -- this would bring you in a steady source of income while you set up your home-based business. Many small businesses start off part-time while their owners continue in paid work until the business is established.
Perhaps you could set up some downloadable digital products which would bring in a passive residual income. This could become your main source of income or perhaps you could produce information products alongside your main products and services.
When your business is established, consider if it would be possible to leverage your profits by developing and selling franchises or outsourcing some or all of the work to other people. For example, you could get someone to manage your business for a percentage of your turnover, or get a marketing company to do most of your Internet marketing.
Businesses are much more productive when there is an overall direction and a plan for increasing your profits over time. Consider how you will earn money from your business and what form it will take.