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Home Business Operating Costs

Aug 17, 2007
One of the things that is of major concern when operating a home business is the amount of cash that you will need to extend in order to operate the business. This is of greatest concern during the start up phase when you do not have income to offset with expenses. As your business grows, this becomes of less importance, though operating expense will never be lacking in importance. The operating costs you extend during the early days of your business will depend upon the type of business that you have.

However, for any type of home business, the single most important and possibly expensive will be the price of advertising. Unless you are involved in a service directed business, the advertising should start before you even begin taking orders. By the time you officially open your business, no matter what kind of business it is, you will have enough potential income to offset the initial set up costs.

In some businesses, such as freelance writing, editing, copywriting and similar types of service oriented businesses, the initial set up costs may be minimal, especially if you have the equipment that you need already in place before you begin your business. Other types of business may have expenses such as operating licenses, certification tests, equipment, including special software, telephone, fax, inventory, advertising, packaging for mailing and much more.

If the type of business you are entering includes equipment that you already have in place, this will greatly reduce your initial operating expenses. This should not be a sign to invest in updated equipment that you really do not need at this point but invest the savings into promotional and advertising tools. In fact, in the early days of your business, you will want to reinvest as much as possible back into your business until you have all of the equipment that you need to operate efficiently.

Even a freelance business in the creative arts requires updated computer equipment, so unless you have installed a new system within the past year or two, take the early profits to upgrade your system so that you can work faster rather than longer to reach the same goals. If your business requires the use of the Internet and you do not already have a high speed connection, you should get that into place before you start your business.

In some service oriented business, especially those that require working at someones home, like repair, remodeling, new home construction, you may want to consider insurance to cover any accidental damage as well as insurance for yourself in the event of an on the job injury. This is especially important since you are working your own business with no one to pay you if you can not work. All of these figure into the operating costs of your business, but will vary based on the type of business you operate.
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Obinna Heche. Los Angeles - California

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