Andee Sellman, friend and occasional $7million7years contributor, refers to the Small Business Success Index study saying:
There are about 6.6 million home based businesses that generate at least 50% of the owner’s household income.
Now, assuming that home based businesses have either no – or very few – staff, I think that means that there are about 18 million home based businesses that are generating less then half the owner’s household income.
Now, think about this: the chances are that the whole household has a maximum of two full-time salaries – IF the owner of the small business runs it purely after hours …
… so, most home based businesses are making less than one full-time salary.
Let’s look at the most successful 6 million of these businesses: what are the chances that many of them are doing much better than “50% of the owner’s household income” – or, a maximum of one full-time wage (but, probably, much less!)?
Not much, I would think.
Now, there are exceptions: if you say that Facebook was a home-based business when it started … or, Apple … or, Google. But, most are just small online/offline concerns … low cost, low revenue, low return.
Chances are, you aren’t going to earn a lot from it, or sell it for a lot.
So, what’s the value of starting a home based business?
Well, unless you’re one of the very lucky ones, it’s in what you do with:
1. What you earn: this is extra income (assuming that you just haven’t thrown your old job in until it replaces your income … plus more) that you SHOULD be investing 100% of (some back into the business … some into outside investments, RE is ideal because the extra business cashflow can help fund any shortfall in the first few years), and
2. What you learn: there is no better way to learn about business than by running a business (preferably, with the resources of sites like Andee’s to help you); sure, my son made a couple of grand between the ages of 12 and 14 running his little eBay business from home … but, the lessons that he learned – not just business lessons, but Life lessons – will become priceless!
No, Michael Masterson’s 50%+ compound growth rate is reserved for businesses that can grow rapidly, have intellectual property that is both desired and protected, and have owners who are inspired by their Life’s Purpose to reach extraordinary heights …
… but, even the most humble home-based business can be a huge turning point in your financial life.
I highly recommend that you give it a go … and, keep trying until you find The One that helps you reach your Number 🙂
Did you ever have a side business? If so what was it and what lessons did you learn from it?
@ Rick – Not while I had a job … but, a great question to throw open to our readers!
sounds like a plan. i will be part of an mlm in a few weeks and you can all join under me. then i can take that experience and use the lessons to start a few other crack brained ideas that are floating around.
Def sounds like a plan! 🙂
Our home business in our village is a small catering service. The profit is good in the food and beverage business. .”