In the past, it seemed pivotal that an entrepreneur have a brick and mortar or office location for their business. If they were unable to afford or secure one, many people would abandon their business dreams altogether. Luckily, this has changed, as more and more entrepreneurs are opening or moving their businesses to their home. In fact, there are as many as 38 million home businesses across the U.S.!
Although there are many perks of running a home business, such as having a flexible schedule and improved work/life balance, one of the most notable is that you can save money. With a home-based business, you can cut costs that you’d otherwise have to afford if you ran a business from an outside location. Plus, you can use that money for other business expenses that could prove to be more advantageous in the long-term.
If you’re unsure if you should start a home business or move your existing business to your house, read this post to find out the seven areas of your budget that you could save on by doing so!
Costs You Can Cut by Working From Home
Obviously, if your business is home-based, you won’t have to pay for a business or office location’s rent. This can save your business significant money, which you can put towards hiring more employees, boosting marketing efforts, and purchasing additional inventory, just to name a few options. In addition, you won’t have to worry about your rent being increased, which is something that causes many business owners financial distress.
In addition to monthly rent, you won’t have to afford utility cost for your business if you work from home. Many new business owners don’t factor in how expensive utilities can be, and find themselves in cash flow crunches after just a few months in operation. Due to this, you should consider running your business from home, so that you’ll only have to pay for utilities there.
If you calculate how much your commute costs on an annual basis, you’d likely be surprised at how much money you’re spending. In fact, Americans spend an average of $2,600 each year commuting to and from work.
Whether you take the bus, train, or drive, you’re probably spending at least some money each day commuting to your business’s location. Due to this, you could benefit from running your business from home. Instead of making a daily trek to the office or business establishment, you can simply wake up and get to work – cost-free! Plus, aside from the money you’ll save on commuting costs like public transportation tickets or gas for your car, you’ll have more time to devote to your business. The time that is spent commuting can be put towards revenue-growing activities, and you could boost sales because of this!
If you run your business from an outside location, you might find yourself feeling tempted to buy a cup of coffee every morning, grab lunch at the local hot spot, or take dinner to-go on your way home from work. These tabs will add up quickly, and you could be surprised at home much money you’re spending on food. According to CNBC, eating out every workday, paying an average of $10 per meal, could cause you to spend $2,500 a year! Of course, this money could be better spent on your business.
In comparison, when working from home, you can make home-cooked meals and keep your food expenses low. You won’t be as likely to spend money on food and drinks if you aren’t out and about, passing by delicious restaurants and cafes. Of course, you might give in once in a while and order delivery, but you probably won’t spend as much money as you would if you didn’t work from home.
5. Child or Pet Care
If you have young children or pets, working outside of your home may require you to pay for daycare and a pet sitter. These fees can become expensive, and could greatly affect your personal finances. Per Care.com, 20 percent of Americans spend 25 percent or more of their household income on childcare!
By running your small business from home, you can either spend less money on these services or can watch your child or pet while working. It’s a win-win!
6. Tax Deductions
Did you know that there are numerous tax deductions available to home business owners? For instance, there are home office deductions, in which there must be a portion of your home that is exclusively used for your business. You could also receive a deduction if you spend money to repair or maintain the space that is designated for business tasks. Although filing these deductions can be time-consuming, they are well worth it if you’re able to save money!
7. Uniforms or Business-Professional Wardrobe
While some business expenses, like rent or utilities, are obvious, many people forget about how much a “work appropriate” wardrobe costs. By working from your home, you might not have to invest in a uniform business-professional clothing, since you’ll be in the comforts of your own home. Of course, you may still need some professional items in case you hold client meetings or conduct some business “on the road,” but you’ll probably be able to buy less items than you would if you worked somewhere other than your house.
Should You Run Your Business from Home to Save Money?
Not every business can be operated from home. For instance, a manufacturing company, restaurant, or medical facility will likely require an outside location.
Still, there are many industries that can be operated from a household, such as a retail business, consulting company, or tutoring service, just to name a few examples. If you’re serious about running a home business, you could save money, while still fulfilling your entrepreneurial goals!
Do you currently run a home-based business? If so, tell us how you’ve been able to save money in the comment section below.