How To Make Money With a Home Based Business

Anyone can learn how to make money with a home based business. You just have to open up a book or go online and learn a few basic things. One of the biggest problems I see with the network marketing or work from home industry is that many people jump right in with no previous business experience and expect it to be a no-brainer. It's far from that. You can make money online if you are willing to learn.

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If you work at home you need to start treating it like a REAL business because you are doomed to fail if you don't. We are in the mlm and network marketing business, but this stuff applies to everyone who is trying to make money online with their home based business. It's really important and most home based business owners don't pay attention to it.

One of the first things I want you to understand is, if you're starting a home based business and it doesn't matter what it is, don't quit your day job yet. You need to make sure you have other income coming in so that you can get comfortable building your business. Once it has sufficient income to support your family without your job, then you can transition into full-time. Remember it doesn't matter whether you're into mlm, network marketing or you're starting a service business. Stay in your job and learn how to run a business first. Read books or go online, but you need to learn. Do whatever you have to do to prepare for the day you go full-time.

One of the biggest reasons for home based business failures is lack of knowledge. People jump into this stuff and think that it's all about making money, but it's much more than that. They don't know anything about running a business. You need to learn about bookkeeping and have accurate records. It can make the difference between success and failure in any business and especially your home based business. If you learn this stuff your business will be stronger than 90% of the others out there.

You should learn about what type of entity you're going to use. There are "S" corps, "C" corps and LLC's and each serves a specific purpose and has advantages and disadvantages. For now a "sole proprietorship" is the easiest to start and should be sufficient unless you think you have a large liability, like a painting or landscaping business or something like that. With a sole prop you just basically state that you are starting a business and away you go. It is easy to set up because you're operating under your own social security number. You'll want to learn about your other options as soon as possible. If you do have larger exposure you may want to start off with an LLC. With a network marketing business or mlm you'll be able to start off as a sole prop.

The IRS Is Your Friend

This is contrary to what everybody thinks. Especially employees. Few people realize this but the IRS is your friend. The IRS tax code is designed and set up for promoting small business and home based business. Only five percent of the IRS code is really written about bringing in income for the IRS. The rest is all about expenses and deductions. It's really set up specifically for business owners.

It is awesome!

There are a few things that you need to provide the IRS to qualify your home based business. The top three things they are looking for are profit intent, consistency and record keeping.

  1. Profit Intent is relatively easy to prove. If you're receiving your optionship or autoship products that's a start. If it's a hobby, like if you're trying to turn your Saturday golf game into a business, that's going to a bit tougher. Home-based businesses like network marketing, setting up a paint company or wedding planner or something, should be pretty easy to prove it's a "for profit" business.
  2. Secondly, you need to work your business on a regular and consistent basis now. There's no specifics on that but, even four to six hours a week, every single week should be sufficient. Of course, I recommend more than that if you are going to be serious about your business.
  3. Lastly, you'll want to keep accurate records to show proof that you have income and expenses.

Build Your Business As Fast As You Are Comfortable

What I mean by this, especially in the network marketing industry, is NO BUYING RANK! I know some people are gonna totally disagree, but I really hate the fact that these people will spend thousands of dollars, to get a title. Just recently, with, a lady had claimed that network marketing was such a horrible thing because she spent thirteen thousand dollars and never made any money. No where did they talk about her not marketing herself or doing any work. That's just stupid. That is somebody who doesn't know anything about business and never even took the time to learn anything about business. She goes out and spends thousands of dollars trying to BUY her way to the top instead of WORKING here way to the top. That's like starting a Subway franchise and trying to go buy a bunch of inventory so that you can be the top franchisee. It's ridiculous. You must move a product in every business.

Obviously the people in her up-line we're greedy idiots!

If you keep accurate records of expenses, you can offset other income that you have. The expenses you have from RUNNING your business, such as expenses from your office in your home based business or money spent building your business, doesn't go to waste. You get to write it off. Your marketing, your business cards, your flyers, brochures or anything like that. If you want to RUN a business, you need to use all legal write-offs in your business and that's what will help you, not so much to get profitable right away, but make it worthwhile so that you're not losing money.

My Two Favorite Legal Deductions

My first Favorite legal deduction is the home based business office deduction, which is huge!

For example, if you have a 1,000 square foot house and you have a 100 square foot office, this gives you a ten percent write-off. It doesn't matter whether you're renting or you own your home and have a home mortgage. If your rent or mortgage is one thousand dollars, you get to write off, 100 dollars every month.

Most network marketing companies have optionships or autoships around $100-150 so that write off alone almost covers that cost. Another part of the home office deduction is office supplies, such as, ink and paper for your printers, pens and pencils, etc. If you need a new computer for your business, a video camera, software or anything that you use to promote and market your business, it can be written off.

My second favorite deduction may be even bigger. It's sitting in your garage or driveway as we sit here.It's your automobile.Currently the business use mileage rate is 55.5 cents per mile. Always check the IRS website or with your accounting professionals, for updates.

Let's look at how this works.

Let's say you need to drive to go meet a prospect or you have to go to the office supplies store. You're going to keep track of all your "business" mileage to and from your business stops. You track ten miles in each direction for twenty miles total. That's $11 that you will deduct at year's end. As long as the initial reason for the trip was business, you can write it off. It will be between you and me if you just happened to stop at the grocery store on the way home. Oh yeah, the food you ate at your business meeting;50% of that can be written of as well!

You can use a mileage log or a GPS solution on your smart phone to track miles, but you need to get in the habit of doing it. Both the mileage log and the miles you drove to go get it are deductible!

I hope you see how very powerful this stuff can be folks. These are not deductions you can make as an employee. If you understand this, you'll realize it's pretty hard to "lose" in your network marketing business, if you just keep running your business.

Other Legal Deductions

  • If you have a child over the age of 6, they can be employed in your business. You can deduct their wages and they don't have to claim it up to $5,450. Double whammy! It must be a business related activity and not just taking out the trash. They could do filing or database management. Face it, your 6-year-old probably knows how to use the computer better than you anyway!
  • With the proper planning you can deduct part or all of your vacations. Let's say I am going to New York to meet with my Preservation of Wealth sponsor, Bill Constain. We are going to have a few business meetings and talk about ways to grow our business. I can take my wife and we can do some tourist stuff while we are there.Travel can be written off with the proper planning. Always check with a tax professional folks.
  • All of your health costs may be able to be deducted.
  • Again, 50% of all food and entertainment that is "business" related can be deducted.

These are just the tip of the iceberg folks. You need to learn this stuff! If you know what you can deduct, it will help offset the cost of getting your home based business up and running and put you in a NO LOSE, situation. Once you are profitable, you will still need to track your deductions, but it will have become second nature by that point.

There are many books on this subject and your tax professional can help as well. I suggest starting with the Home Business Tax Savings Made Easy Book. You need to have the right tax person because some will fight you on certain deductions. If they are LEGAL, there is no reason why you shouldn't be taking them. It's all in black and white on the IRS website, so get familiar with it.

Using Your Money For The Monthly Expenses Of Your Home Based Business

I hear people saying that they just can't afford to build a business. GARBAGE! If you are currently employed, which you should be if you are trying to start a home based business, you can afford to get started. All you need to do is change the number of withholding on your w-4 and receive your tax refund in advance.

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Posted in Financial Services Post Date 07/11/2020