Financial Positioning Matters…
If you are planning on leaving a paying job to work at home, having a good handle on your finances will be a must. In most cases, it will take some time to build up a business or freelance venture enough to replace a workaday job. Beyond the capital needed to launch the business, you will also need a nest egg to cover the start-up period. How much money to set aside will be dependent on a number of factors, including:
Your monthly bills
Understand just how big your contribution is to the family’s budget on a monthly basis. Make sure to have figure covered for at least a few months. Three months can do the trick, but it is a conservative (and safer) choice to shoot for six to even 12. Keep these figures separate from what you will need to give your business venture a fighting chance of success, as well.
Anticipated extra expenses
Establishing a business at home can take a little upfront capital. Beyond what is needed to cover the family, you will also want money for equipment, marketing, licensing and so on. A small business loan might work in some cases, but for many at-home operations, you will be on your own with start-up costs.
Projected “red period”
While business plans might not always pan out exactly on schedule, have a good understanding of your particular venture’s anticipated period of running in the red. You will want to make sure you have the money available to cover this period and keep growing the business. Be realistic here.
If finances are standing in your way, consider seeking out loans, activating a savings plan or just working at your business part time at first. There are ways to make your dream happen even if the cash is not available as quickly as you would like it to be.