Earn More Than You Spend And Generate Extra Cash From A Part-Time Home-Based Business
Earn more than you spend – Starting a business on a shoestring
No Matter how hard you try and make savings, eventually you will reach the point where you cannot cut your budget any further.
It’s a bit like governments who find that making cuts and reducing wastage can only go so far. The country’s economy must produce more revenue and GDP in order to prosper and grow.
You need a combination of both keep costs down and increasing revenue and profits.
It’s the same for your own personal “uconomy”, which is the only economy you can control. After making those savings and cutting down on waste and nonessential spending, the next logical step is to start earning a little extra cash so that you can enjoy a better standard of living.
Starting a business on a shoestring
You could get a better paying job, work longer hours or take a part-time job, but you will still be exchanging your time for money. Working harder or longer hours has its limitations.
You could also start a part-time business – online or offline – from home, as millions of people have done. Most small businesses start as home-based or part-time ventures with little or no start-up capital.
Amazon, Dell, Apple and Microsoft all started off from home or in a garage.
I have started several service-based businesses from home – before we had today’s technology at our fingertips – and did not scale up to an office or employ until the business started generating revenue.
Starting a physical business requires capital, premises, equipment and staff.
Starting an online or service-based business usually requires little or no capital, as you are giving your service in exchange for money.
If you’re starting a new business, I would not suggest renting a shop in the High Street or signing leases for offices. If you must have an office, rent one of the many serviced offices, like Regus or We-Work, with a flexible short-term contract. The rent will be a little higher than a basic office room, but they provide you with telephone lines, answering service, photocopiers, printers, coffee machines, meeting rooms, cleaners and so on. The other advantage of a professional serviced office is that you will immediately look more credible and established.
You can also work from home while using an office accommodation address and answering service.
Every year, I see shops in my local High Street come and go as one business after another fails. In the last five years, I have seen shops selling party costumes and balloons, bathrooms, kitchens, carpets, curtains, café’s, ice cream parlours and numerous restaurants all collapse within a couple of years. Some were start-ups, but others were established businesses and chains, like Linens Direct and the Frankie & Benny’s who didn’t last very long in the premises they had spent a fortune renovating.
If the likes of House of Fraser, Maplins and Toys “R” Us (all have recently gone bust) cannot make it in the High Street, you are going to need something very special or unique, plus a lot of capital, in order to survive.
Over the years, I’ve seen so many people who have had a windfall or come into some money (or borrowed money from relatives who had a windfall) start up a physical bricks and mortar business or paid thousands of pounds for some useless franchise only to lose everything.
Remember, most new businesses are financed by one of the three F’s – Family, Fools or Friends.
You’ve only got to watch TV shows like Dragons Den – where people pitch new ideas to wealthy entrepreneurs in the hope of attracting their investment and backing – to see some of the ludicrous business ideas that people have and get into without doing any proper market research. Some of the contestants have already sunk hundreds of thousands of pounds of their life savings into an invention or business idea which has no chance of succeeding. When asked by the experts what research they had done, they usually say they have asked their friends and relatives if they thought it was a good idea and most people said yes. What would they expect their relatives to say? What their friends and relatives know about it anyway?
I’m not saying never start a physical business, but you have to be very careful and have enough capital and a sound business plan to survive for the first few years. Even if you start a physical business, like a bathroom or kitchens company, do you really need a shop premises? Why not start from a garage or small workshop and promote your services online until the business has a revenue stream?
What are the alternative ways of getting into business without large amounts of capital?
You don’t have to spend your life savings or start a physical ‘bricks and mortar’ business, as there are plenty of better, and safer business models.
When the Napoleon Hill published his ground-breaking book, Think and Grow Rich, during the great depression of the 1930s he said that the way to start a business with little or no capital was to provide “services”. This has not changed that much in the last hundred years.
Hill mentions services like bookkeeping, which is still relevant today as most businesses need a bookkeeper in addition to an accountant.
When I was running a physical business, we employed various bookkeepers over the years, most of whom came to the office, used software we had to supply and had no business premises of their own. On average we paid between £25 and £45 per hour for a bookkeeper, and it was not easy to find a good one.
The service sector has replaced the old heavy industries that used to power the UK economy. Today the City of London employs hundreds of thousands of people and earns billions in revenue for the British economy.
3 steps to starting a small business
Step 1
Decision.
Before you start any business, first decide what it is you like to do or better still, what is your passion?
What do you like doing in your spare time or at weekends?
What jobs would you do for free?
What would you really like to do if you won the lottery after you’ve got tired of travelling the world and sitting on beaches?
We all have unique skills and talents which can be monetised, so what are yours?
Of course, you may need further training in your field, this can be done very cheaply in your spare time.
One thing that has changed over the last hundred years is the multitude of opportunities which are now open to us in the Internet age.
There are thousands of jobs and businesses that didn’t exist 10 or 20 years ago.
People can now make a good living working from home selling products on Amazon, Shopify or Groupon. You don’t need to rent a shop in the High Street, as these companies have built an online store for you, and they get far more footfall than you will ever get in the High Street or on your own website.
You don’t even need to invent your own product, as there are thousands of products and services you can sell as an affiliate partner on a commission basis. You can also sell products for direct sales companies like Avon, Betterware and Ann Summers, which employ thousands of part-time self-employed agents. You can also earn commission working with weight loss organisations and networking companies who have done the hard work of building a product and brand for you.
I know many people who are making a very good living in property, but started with no capital. They used other people’s money to ‘borrow and grow rich’ – see chapter on how to use Other People’s Money (OPM).
Some are running letting agencies or rent-to-rents businesses, which earn excellent profits and have no shop, office or fixed overheads.
If your business is scalable, you can obtain investment and further funding once the business is up and running. Check out my podcast, How to Obtain Angel Investor Funding on iTunes or visit www.moneytipsdaily.com.
Step 2
Open your mind.
The second thing you need to do is to open your mind and change your mindset. If you’re stuck in your old ways and refuse to see the opportunities around you then your closed mind will hold you back forever.
Things will not change unless you do.
Step 3
Take action!
The third and most important thing you need to do is to take action, as nothing moves without action.
Taking action now might involve writing a quick plan, doing some research or setting up a free online account with Amazon.
I can hear some of you saying, “well that’s alright for some people, but I haven’t got the time”. However, this has more to do with your mindset than reality. In reality, we all have the same number of hours in a day. How we use those hours will determine our success, happiness and future security.
For Instance, you choose to spend all your spare time in front of the television or instead spend time improving yourself, learning a new skill or looking for opportunities.
Check out my podcast, How to Get Back 30 Lost Hours a Week on iTunes or visit www.moneytipsdaily.com.
If every waking hour really is filled with activities, you might want to consider outsourcing some of the work you do to free up time for income generating activities.
Hiring a cleaner or gardener might cost you a little bit of money, but the time it will save will be worth it if you use that time to generate extra income.
I’m sure your hourly value is higher than a cleaner and if it’s not right now it will be if you follow the right path.
Summary
You can only get so far by trying to save and economise, so think about how to generate more income. Starting a business is not for everyone and you should take professional legal and tax advice.
Lessons learned
- Earn more than you spend.
- You only go so far by cutting back and cost saving.
- Find ways of generating more revenue.
- Think about starting a part-time business.
- Avoid costly start-up business costs until you have started generating revenue.
- Use other people’s money to borrow and grow rich.
