Home Business - Reducing Startup Costs and Expenses

One of the obstacles to having your own home business is lacking the cash to get started. By reducing startup costs and expenses, you can begin business sooner and with less risk. This article shows several ideas for saving money. Remember, the lower your expenses, the higher your profits.

Deferring certain costs and expenses -- There are certain expenses you must pay before starting business. An example would be a business license and insurance premiums. However, other costs and expenses can be put off until after the business is operating and making money. These items to be deferred might include the following:

Getting a business telephone
Setting up a fancy home office
Purchasing materials for future jobs
Purchasing all the equipment you might need for future jobs
Purchasing a new computer
Paying for a big advertising campaign

Borrowing or renting equipment instead of buying -- Let's say you don't expect to use a particular type of equipment very often. Then when you do need it, see if you can borrow it or rent it. This could save you a lot of money.

Using sweat equity -- Sweat equity means doing things yourself instead of hiring people to do it.
An example would be painting your home office. You could get a how-to booklet on interior painting or download instructions from the Internet. Then put on some old clothes and do the work yourself.

Sharing the profits -- Let's say you know someone who has a piece of expensive equipment that you need for certain jobs. You can agree with this person to share the profits from those jobs. Then you don't need to purchase or rent the equipment ahead of time. After you collect the money from the job, split it with the equipment provider. Presto, you don't have any startup cost for this equipment.

Having the customer purchase the job materials -- If some or all of your future jobs require expensive materials, have the customer pay for them upfront. This is another way to reduce your startup costs. This also reduces the risk you would have if you buy the materials upfront and then the customer backs out of the job.

Buying equipment on credit -- It may be better to buy equipment on credit, even with the additional interest costs. This lets you defer most of the equipment cost until you're making money from the business.

Buying equipment at bargain prices -- You may be able to buy needed equipment or furniture at bargain prices. You could go to secondhand stores, unfinished furniture stores, closeout sales, estate sales, and even yard sales. The equipment only has to last until you are making a good profit from your business. Then you will be in a position to buy equipment that will last longer or operate faster.

Final thoughts -- If you really want your own home business, use these ideas to help you get going. Use your money wisely. As old Ben Franklin said, "A penny saved is a penny earned."

More information -- For more details on this subject see the Bootstrap Methods page on my website.

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Charles Moorehead was a certified public accountant for 40 years. After receiving a series of breakthrough revelations, he is now devoting his free time to helping people overcome the barriers to a better life.

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