Published on July 25th, 2020
Can I run a business out of my home?
Which work-from-home business option is good?
There is no doubt that the work-at-home industry is filled with several terms. Now, most people don’t understand the difference between working as a freelancer, being a telecommuter, and having a home business.
While home businesses are an entrepreneurial effort, freelancing and telecommuting are considered as paying jobs that let you work from home. In this article, we will take an in-depth look at each of the home-based businesses mentioned above.
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Understanding A Home Business
With a home business, you are both the boss and owner of the company. However, understand that simply because a business is run from home doesn’t make it a part-time, small-time, or sideline venture.
Did you know that many entrepreneurs have thousands of employees working from home in a multi-million dollar company?
Come to think about it, Disney and Google were started at home. What this means is that there is a lot of possibilities that can be explored in the comfort of your home.
Advantages Of Running A Home Business
You get to enjoy whatever you are doing. Working from home allows you to turn your hobby or passion into a business. You get decent pay.
There have been several debates about women getting paid less than men for the same job. With a home business, you get what you deserve since you set the price.
A flexible schedule. A home business gives you the chance to work around your family’s schedule and needs. You also get a lot of time to explore other personal interests.
You get to manage your business however, you see fit. Sometimes, you might have been working a different job but felt that things could be done differently. Well, now you have the opportunity to do precisely that.
Additional tax perks. Did you know that a home business comes with several tax deductions? You get to save more money, which means that you can work on expanding the company.
Disadvantages Of Starting A Home Business
You dictate the success of the business. It can be a hefty burden when both the failure and success of the business rests on your shoulders. You get to dictate every element of your business, which can be rather scary.
The income is not guaranteed. With a home business, there is no guaranteed salary. This is a considerable challenge, especially during the first couple of months.
Income fluctuations. The income you get from home business is never fixed. Sometimes you might get a lot of cash while other times money might be tight.
More working hours. Understand that the success of your business rests on your hands. You, therefore, need to work extra hours, especially during the startup.
Lack of resources. Getting starting capital and loans is incredibly tricky for home businesses.
Most of these businesses have no help and little cash. Tax implication. Yes, you get a lot of tax perks. However, just like any other business, there are specific tax rules that you must follow.
Although starting a home business comes with a lot of pros and cons, it is the best alternative for individuals who want to be their boss. You need proper management and planning to be successful with a home business.
Telecommuting is also commonly referred to as telework. It is a term that is used to describe home-based employment. A company hires employees that work at different locations from the main office or at home.
With telecommuting, you can either choose to work part-time or fulltime. Understand that certain telecommuting firms offer benefits and salaries—however, a majority of this establishment pay by commission.
- Stable income thanks to wages and salaries. With telecommuting, you get a steady income, which is great considering the state of the economy.
- You don’t need to hustle anymore. Once a telecommuting firm hires you, then the struggle of building a home business ceases.
- Ability to work from your preferred location. Telecommuting gives you a rare opportunity to work at a different location or your home.
- A bit of flexibility in your working schedule. Many telecommuting jobs allow you to take time off or create your working schedule.
- Hours and pay are lower, especially for non-professional or non-technical jobs. Most of the time, you will get somewhere between $8 to $15 per hour.
- Less flexibility when compared to contract or self-employed workers. Yes, you have a little bit of flexibility. However, it is considerably low when compared to self-employed or contract workers.
- No benefits offered. Most telecommuting jobs won’t include any benefits. This is especially true when it is a non-professional job.
- Not as secure as other jobs. Job security is a huge problem when it comes to telecommuting. Even when the income is stable, you can never be sure about job security.
- Finding jobs is a huge challenge. Most people don’t know where to look when searching for telecommuting jobs.
According to several reports, telecommuting is slowly fading. However, more businesses have started looking for virtual workers to save on money. You need to be an accountable worker not only to get hired but to maintain the job.
Freelancers and contractors are considered self-employed. However, they get to be hired as part-time or full-time employees while being paid as independent workers.
Freelancers and contractors are, therefore, not considered as employees. Most of the time, you will have to sign a non-disclosure agreement.
Difference between a contractor and freelancer: A freelancer has more control over their work and who they work for when compared to a contractor.
Most of the time, a firm will ask a contractor to sign an agreement that hinders them from working for other businesses.
Contractor vs. employees: According to the IRS, a business has the right to control and direct the work done by ban employees.
However, in the case of a contractor, the business can only clarify what they want to be done. The time and how it is done is left to the contractor.
Pros and cons of contract and freelance work: contracting and freelancing work has the same perks as a home business. The negatives, however, include more complicated taxes, no benefits, isolation, and less job security.
Deciding Which Work-At-Home Option Best Suits You
Choosing between the different work-at-home options can be rather tricky. Freelancing or home business is ideal when you need to dictate your working hours and choices.
However, when you need a stable income and love structure, then a contractor or telecommuting job is perfect.