Friday, December 15

The Other American Dream – A Home-Based Business

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For many, a home business is the American dream, second only to owning one’s own home.  No more commuting, no more bosses, no more getting up at the crack of dawn to sit in traffic jams.  Bliss.  Nirvana.

It’s true enough: having a home-based business is all those things, and more.  As owner, director, manager and producer, you now have the opportunity to make all the decisions, call the shots and do as you please.  You’ve had great ideas all these years, but were never able to implement them.  Here is your chance.  You feel you are responsible enough to get the job done even outside “normal” business hours?  Go for it.  You dream of spending more time with your family, which, of course, is possible since you are now shaving a couple of hours of commuting time each day. 

But beware: along with the freedom that comes with making your own decisions, calling the shots and having more time to spend with family and friends also come enormous responsibilities.  You no longer have a boss, you now have several — all your customers.  You can make your own decisions, but you also must shoulder all the burdens and all the expense of running a business.  Even if you engage a clever accountant that shows you how to shelter business expenses; and even if your banker can’t wait to lend you the upfront finances, you may find that launching your own home-based business is much more complicated and frustrating than you had anticipated.  And there are no fringe benefits: if you don’t work, you don’t make money, unless you are fortnate enough to have royalties or residuals.  Medical insurance is out of pocket, including the deductible; there is no 401(K), though there is the SEP-IRA into which you can contribute considerably more than a regular IRA (as of 2007, the limit is the lesser of $45,000 or 25% of “eligible compensation.”  Problem is, you’ve got to make that kind of money before you can contribute.  Your FICA expenses are also higher: double what you otherwise would pay as an employee (the total is 12.4% of income, which you pay entirely as a business owner, but only half of which as an employee, with the employer contributing the other half).  Granted that there are different forms of business ownership which can mitigate some costs, but where there are benefits, there are frequently also tradeoffs.

As for the time you thought you’d have to spend with your family?  Forget it!  It’s a truism that one works 12-hour days in one’s own business, while a regular job means a “mere” 9-5 stint, and, once home after the long commute, your time is your own.  Not so with your own business.  There are management details, planning, marketing, advertising, accounting and handling the actual business that suddenly consumes much more than a regular 9-5 job.  Ah, yes, time with the family.  While you are trying to do your work, your 2-year-old runs in and lays her chocolate-covered fingers all over your just-completed report.  Or the cat dances on your keyboard while you’re on the phone with an irate customer, and you forgot to save your work.  Or your husband comes home in an amorous mood.  You name it, it has happened.  “But,” you protest, “surely you can close the door!”  Yes, provided there is someone to watch the toddler; and provided there is someone to prepare dinner or snacks for school-age children; and provided your spouse is understanding enough to share you with your long-winded customers.  You frequently find yourself working into the night, bleary-eyed, having forgotten to take a shower or eat, only to fall into bed next to your snoring honey, with your brain mulling over unfinished tasks, or going over your to-do list for the next day. 

Then there is the solitude.  Over the past 23 years, while working in my own home-based business, and being very focused on my work, I must admit that there were times when I felt anxious about my next account or my income level, and working alone at home did not seem like such a swell idea.  I missed the camaraderie of office mates, the occasional banter by the water cooler, the simple presence of other human beings.  I was not caring for young children during that time, so the house was not buzzing with voices or footsteps.  Solitude is something that one must adopt and embrace as a necessary element if one is to thrive in one’s own business. 

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