Everyone wants more control and freedom over their working lives. Here at Three Month Millionaire, we believe anyone can enjoy the benefits of a home-based business.
We want you to experience the success that Leslie and I have had, but we also want to be honest with you about the process.
That’s why we have put together this article. This will give you an honest look at home-based business benefits, but also at the disadvantages (and we’ll show you how to overcome those disadvantages).
So let’s get started. Here are the top home-based business benefits:
Benefits of Building Your Own Home-Based Business
More Freedom
Far and away our number one reason for creating our home-based businesses. You are the boss. You set the hours. You choose the next job or project.
Remember, the ultimate goal of this site is to help you build a million-dollar business that you can run in two hours a day or less. Check out our productivity guide to see how we do it!
Less Stress
How much stress could you eliminate from your life if you didn’t have to report to somebody else, work with that team, or wait for that budget approval?
When you build a home-based business, You decide what stress to let into your life. There will always be some, but when you’re in control of it, it all becomes so much more manageable.
More Creativity
Once that stress falls away, you will be amazed at the creative potential that was waiting inside your head this whole time.
Honestly, it’s incredible the negative impact stress can have on the creative process.
I would venture a guess that 90% of people who believe they are not creative are actually just overstressed.
You Keep The Money You Make
Ever hear that rhyme, ‘Boss makes a dollar, I make a dime…’? Well, now you are the boss. Now you decide what to do on company time.
But seriously. There is something wonderfully satisfying in knowing that you get the money you make. You determine how it gets spent. Again, it’s about freedom and control.
To really take this to another level, we recommend reinvesting both inside and outside your business. We go into more detail on our investing page.
Much Easier To Outsource Annoying or Difficult Tasks
Ready to meet your new human resources department? Here it is:
SaaS
SaaS stands for Software as a Service. It is how we build a complete business that one person can run in just a few hours per day.
What does that mean?
Here’s an example:
Leslie and I currently run two home-based businesses. We could hire someone to handle our social media accounts…
Or we could use a social media management service.
I once worked for a company that paid a person a full-time salary (my guess was around 45k per year) to do what we get done with Tailwind for less than $20 per month.
And it only takes us a few minutes per month.
Besides social media, there are also email marketing tools that simplify the process of maintaining your email list.
We keep a running list of useful small business tools as well. These are miscellaneous apps, add-ons, and plugins that have saved us time, money, or both.
Lower Costs
No Rent. No Utilities. No (or low) commuting costs.
Our overhead expenses are basically zero.
Our whole business fits into a corner of our basement.
What do we do with the money we save?
We invest in SaaS solutions (so we do less work) and we invest in other businesses (so we make more money).
As a bonus, lower expenses mean…
Less Risk
According to Investopedia, lack of working capital is one of the major reasons small businesses fail.
That means they didn’t have incoming cash to cover outgoing expenses.
But with our home-based business, our outgoing expenses are minimal. That means we need minimal cash to stay afloat.
There is a very wide margin between our expenses and our profit. We keep the cost low, we don’t use leverage, and that lets us sleep well at night.
No Commute
Do you know how much driving actually costs?
According to this handy calculator, driving only to work and back for the average American (a 54-mile round trip) would cost over $18,000 per year. That’s gas, wear and tear, and insurance.
Or just imagine how much you’d save in bus/subway/cab fares.
People Will Leave You Alone (If You Want Them To)
This goes back to your freedom and your control. You decide who can interrupt you and when. You make the rules.
There is a bit of a misconception that home-based businesses are lonely ventures.
That might have been true in the past, but with the hyperconnectivity of the modern world, it simply doesn’t have to be that way.
If you want to be alone, you can be. If you want to talk with people, you can.
No Office Politics
This one almost speaks for itself, right? With a home-based business, you don’t get passed over for the boss’s golf buddy. You won’t lose out because of other people’s connections or favors.
You’re Free to Actually Multitask
You get to do what you want to do when you want to do it. You can jump from one thing to the next if you want.
Or you can do two things at once. It’s up to you.
Now we can argue over the efficiency of multitasking, but at the end of the day, you are in control. If you don’t want to care about efficiency, then don’t!
You Control Your Schedule
This is a very big deal around here. Leslie and I built our businesses because we didn’t want to work more than two hours per day.
We built them over our three-month vacations (we’re teachers) and we haven’t looked back.
Do you know how many business calls we take in a day?
None.
We work on what we like most. We work when we want. We set our own goals. We make our own hours.
The Home Office
Probably the most well-known tax advantage on this list. You can deduct a percentage of most household bills (like your rent/mortgage, utilities, insurance, phone/internet bills, and even your property taxes).
The percentage you can deduct is based on the percentage of the area of your house you use for your business.
For more information, here is what the IRS has to say about it.
Office expenses
One of the lesser-known home-based business benefits is that you can deduct any improvements or repairs you make to your home office.
So painting, shelving, and flooring for your office are all deductible. But don’t get creative here. You can’t put a new roof on your house and say it was for your home office!
(Home Based) Business Expenses
Just because your business is home-based doesn’t exclude you from tax benefits. Don’t forget to look into some of these popular deductions:
- Software for your business
- Education costs required to improve your business
- Tax preparation services
- You can even deduct mileage traveled for business. (There is a per-mile amount you can deduct but do your own research for the amount that applies to you).
Lower Startup Cost
It is kind of ridiculous how cheaply you can start your own home-based business. We started our first (an online retail store) with less than two hundred dollars. And even that money we raised by buying burner phones with a $50 gift card.
While its all fun and exciting to say that we turned $200 dollars into a six-figure business, the real reason this is great is this:
What do you lose if it doesn’t work out?
We built our businesses by reinvesting profits. Everything came out of that initial $200. If it had all gone south, we would have been out… what? I know people that spend that much on TV subscriptions per month.
Ok, so starting a business from home has a lot going for it. But it wouldn’t be right to only show you one side of the coin.
No job, career, or business is perfect. So here are some of the downsides to this plan.
Disadvantages of a Home-Based Business (And How To Fix Them)
Lonely
Loneliness can be a problem… If you do it wrong.
Remember, our goal with these home-based businesses is to increase freedom and control. We do not want to become slaves to our PCs.
Instead, we want to use our freedom to go and live more. Hang out with friends and family more. Do more human things.
Part of the solution is to know when enough is enough.
In your home-based business, you will reach a point where you could earn more and more money by working longer and longer hours.
Don’t!
If you want that, stick with a traditional job.
Keep focused on the reasons you’re building this business. We all like to talk about the money we make, but that’s not really the point.
The point is freedom.
So we work to make money, sure. But we pay ourselves in time.
Be proactive with your time as well. Make plans with friends and family. Get it on the calendar. Don’t just let the days slip away.
If you’re doing it right, you’ll spend more time around more of the people you love than ever before.
So remember: the goal is to live more, not less.
You Are The Boss
It’s a blessing and a curse. You can’t blame anyone but yourself. You can’t hope for anyone to bail you out.
But it’s ok. Keeping costs low. Investing well. Working smart. These are our principles and they will keep you out of trouble.
But when trouble does come around, own it. Hold yourself accountable. Accept blame and be willing to apologize.
And above all else, be ready to learn. One of the greatest gifts you can give yourself is the gift of a growth mindset.
View every setback as an opportunity to learn and grow.
Clients Are Used To Traditional Offices
In businesses where you must work face-to-face with clients, there could be a bit of a barrier.
This is just a prejudice that many people have. And that’s ok.
The trick is to provide the kind of service that gives your clients no choice but to rewrite their notions. Prove to them that one person at home can provide better service than a team in an office (this is actually easier than you might think).
For quite a lot of businesses, having an office inside your home can be charming. It all comes down to how you spin it.
Or follow our path and build a business that requires no face-to-face interaction.
(Physical) Expansion Is Limited
With a home business, you can grow bigger than your second bedroom, right?
Wrong.
It’s a common belief that the size of offices is proportional to the size of the business.
But some seriously large companies have tiny offices.
Bridgewater Associates, one of the biggest investment firms in the world, started in a spare bedroom. And Berkshire Hathaway is currently one of the 10 biggest companies in the world and still only employs 26 people at HQ.
We have grown our businesses to a value of nearly $1 million without ever needing more space than our original 10-foot-by-10-foot home office.
We can do that because we outsource to SaaS, because we build passive income streams, and because we do most of our work online.
So what if physical growth is limited? We’re not building cars here. We are information workers. Content creators.
We care way more about our financial expansion than our physical expansion.
Lack of Supervision
We’ve all been there. Somedays you just don’t have the motivation. We get it.
We go into great detail on how to manage this in our business and productivity guides.
In short: We externalize our responsibilities and we create bite-sized tasks that move us forward, even if our energy levels are at all-time lows.
And do you know what we do when energy levels hit their low points?
We nap.
Or we read or play video games or go for a walk.
(It’s incredible what a 20-minute nap does for your productivity. If companies let people nap, they’d all make more money).
Family Interruptions
It can be frustrating. You’re deep into a project and the dog starts barking or the kids start fighting.
Most of the sites on the internet tell you the same old advice:
- Create a space for yourself
- Set Boundaries
- Close the door
And that’s all well and good. But here’s a different thought:
Enjoy the interruptions. You’re the boss, remember? What does it really hurt?
So go spend some time with the kids in the middle of the afternoon. Why not? Chances to enjoy family interruptions will be gone before you know it.
You’re free to do it because you’re free.
Structure your business to avoid deadlines and you’ll never need to do anything right now again.
How To Turn Those Home-Based Business Benefits Into A Million-Dollar Powerhouse
There are three basic branches to our business structure here at 3MM.
- We create low-cost home-based businesses
- We operate those businesses in such a way that we spend less than 2 hours per day running them
- We reinvest our profits heavily to generate passive income
Eventually, our earnings from our passive investments will cover our living expenses. And at that point, the actual business operations become optional.
The key to all of this is incremental growth. We set a yearly goal. We want to grow both our business income and our investment income by the same amount each year.
We grow the business in small steps. This keeps us from overextending or facing cash flow problems.
So what’s it all for?
At the end of our careers, we will own a large portfolio of passive income, a business that can be sold or given to our daughter, and all the peace of mind and security that goes with those things.
We intend to leave our daughter a portion of that passive portfolio; in the words of Warren Buffet, it will be “enough that she can do anything, but not so much that she can do nothing.”
Closing Thoughts
Our own personal home-based business benefits have been truly life-changing. This is why we wanted to share our thoughts and experiences with all of you.
The problem, we feel, is the way home-based businesses (and entrepreneur culture, for that matter) are represented online.
There is so much romanticization of the work-80-hour-weeks and the sacrifice-everything-for-your-business mindset….
It just isn’t healthy.
It doesn’t have to be this way. You can create a home-based business and work less. With the right skills and strategies you can drastically reduce your workload and live the life you want.
(Here’s an example: Our main business requires only a few hours of active work per year!)
It started as an Amazon storefront, but then we started applying the financial management techniques of Warren Buffett and before long we had built our own small business Berkshire.
To dig deeper into how to create your own 3MM-style business (that is a home business that can be run in less than two hours per day), check out these other posts:
- Our Ultimate Guide to Building a Business
- Our Ultimate Productivity Guide
- Our Ultimate Guide to Investing
- Our Income Reports
We also publish unbiased reviews of business tools and software that let us work less. To see some of our top review posts, Check out:
- Our reviews of the Best Online Course Creation Software
- Our reviews of the Best Books For Following the Three-Month Millionaire Journey
- Our reviews of the Best Business Tools No One Ever Told Us About
- Our reviews of the Best Social Media Management Tools
