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Have you ever wished you could learn how to make extra money from home? Whether you’re feeling the itch to switch up your career or you’re just looking to add some extra income on the side, you want a new job that not only makes money but one that you actually enjoy.
Before You Start A Home Business…
1. Research the proper way to start a business
Make sure to get your paperwork in order too. Check out the right documentation for personal liability protection, tax forms, sales forms, and financial forms. Make sure that you pick the right sort of business as well. Debating how your business is viewed, vendors and banks may be more willing to help finance you if you are perceived as a permanent fixture (meaning you’re not just a fly by night operation).
2. Learn about tax deductions
When you’re just starting, you’ll find that you’ll be operating at a loss. After you buy all of your essential materials in order for you to run properly, you may find yourself in the negative. If you are running a business, you’ll be able to deduct those items. If your “business” is classified as a hobby, you can’t deduct those items.
Check out your IRS guidelines for more information. Specifically, Internal Revenue Code Section 183 which is labeled “Activities Not Engaged in for Profit”. This section is also called the “hobby loss rule” because if your new gig is considered a hobby, this is telling you what deductions you are limited to. Of course, this is just a reference and you’ll need to go see someone for clarification about your specific business.
3. Can your idea work?
I love playing board games but I’m not going to lie to myself and say that there’s a demand for this if there’s not one out there. That’s just a waste of my time and money.
However, if you’re really determined, there is usually a way to spin it but it will require more work than other items on your list that already fill all of the columns. For example, I could open an after school center, playing board games with kids but that will require a lot of training and classes in order to qualify.
4. What’s your USP?
When it comes to knitted caps and baby blankets, you’re probably going to find that there is a lot of competition out there. I’m sure that you have a built-in fan base (your mom only counts if she’s going to actually buy your products). However, you will still need a USP (a unique selling proposition). You need to figure out what makes you unique in your market. Find your niche. Even with just a side project or job, you’re going to have to do this work or you will end up just being a “hobby” in the eyes of the IRS.
5. Continue to learn
Another important aspect that you must consider is the fact that you will need to continuously learn about the new developments in that field. Do you want to be a photographer? Sure, there may be some classic photography techniques (and it may just come naturally to you). However, you will still need to learn about the latest equipment and techniques in order to stay active in that very competitive market.
- Check out all of the books in the library.
- Subscribe to the latest magazines.
- Read up in the latest publications and books.
- Go to the conventions.
- Take the courses.
You don’t have to do this all before you open. But you should always be learning as your business gets bigger. And remember: this will be easier if you like what your side project is. It will seem “worth it” and “easy”.
Check out these things you need to do before starting a new business.
Ways To Make Extra Money From Home
#1) Stick With Your Passion
A lot of passion projects get the reputation of being hobbies as opposed to solid business plans, but that doesn’t have to be the case. In the long run, you will always be happier staying authentic to yourself and going with a business plan that you truly love and not just something that seems guaranteed to make you money. Sure some avenues of entrepreneurship offer money that moves quicker, but if it isn’t going to feed your soul will the money even mean anything anyway?
Starting and running any kind of business can be stressful so it’s of the utmost importance to choose the path that will be feeding you along the way (through ups and downs) instead of just depleting you.
#2) Share Your Opinions
If you have a lot to talk about on a certain topic, why not turn it into a blog? A blog has relatively low start-up costs (if any) and it can be the perfect place to organize your thoughts. The nice thing about starting a blog is that it can seem a little less daunting than other things. After all, before you get a following, there won’t be many people judging your learning curve.
That being said, starting a blog with the intent to make money is going to require that you research marketing procedures to ensure that you’re really getting your word out there. Unlike websites where you are selling services, with a blog you make money based on your readership.
#3) Try an Online Business
Anyone with an idea of something to sell, whether it’s a service or goods, can do it from an online store. Again, the startup costs can be relatively low as far as the site goes. All you need is an awesome product or service and a great way to express the uniqueness of it. There is a lot of work involved in running any sort of e-commerce site, but it can also make you a lot of money and put you in complete control of your workday.
Starting an online business can be faster and more efficient than opening a real store for a variety of reasons, but it requires a lot of passion from you about your product or service. You must get the message across to other people that they should take it as seriously as you do. Selling a product online can work for anything from greeting cards to dog walking services.
#4) Turn what you love to do into what you make money from
Thinking about what you do in your free time is a great way to start thinking about what would be a good business option for you. Are you always dropping by your friend’s houses to hang out with their kids? Maybe throwing children’s birthday parties is your calling. Read a lot? Perhaps book blogging is your destiny. Anything that you might be interested in has some sort of business-related aspect to it, so it makes sense to consider if it’s the type of business that might fit into your life as well.
This is the key to making work not feel like work, and also the best way to get paid for the stuff you’re already doing anyway. When you can start your own business doing something that you love you might be surprised at how quickly it escalates into a bigger business than you originally anticipated. And that is a wonderful place to be!
We’ve talked about turning your hobby into a full-fledged day job before but what if you just want some extra cash? You still need to be careful and consult with your tax lady at your local IRS office to make sure that you fill out the right paperwork and that your side business really does qualify as a side business and not a hobby.
#5) Not Just Crocheted Hats
When I talk about turning the hobbies that you love into side jobs, I don’t just mean hobbies that involve crafts like sewing, crocheting, and knitting. I also mean hobbies like these:
- playing guitar (you could tutor)
- organizing (you could be a virtual personal assistant)
- writing (you can be a blogger or a content writer)
- photography (you could set up photography sessions or sell your prints in local boutiques)
Those are just a few ideas off the top of my head. If you really want to find something that you don’t mind working as a side job then I suggest you pick up a pen and pencil and start writing down things that you enjoy.
Write down three columns and fill them in: what you enjoy doing, what you are good at, and that there is a demand for. Enjoy. Expertise. Demand. Fill that first column with activities that you enjoy doing and check off the next two columns with items that qualify. Do you enjoy playing board games (and you’re good at it too) but there’s not much of a demand for it? Then it isn’t good as a business.
Now it’s your turn. Do you have a side business? How do you coordinate the time between a day job and a night job? Have you turned your hobby into a job that can turn a profit? Do you have tips for the other readers? Learning to make extra money from home could be a lot fo fun. If you’d like to share your thoughts with us, write them down in the comment section below. We’d love to hear from you!