The Cost Of Starting A Home Based Business
by BB Lee

As the editor of SmallBizBits News I am often asked how much does it cost to start a home based business.

Here's a brief roundup of the typical cost involved with starting a home based business.

Take note: By working out of the home start up cost will be much lower than if you were working out of an office suite or even a neighborhood shop.

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Many entrepreneurs started a home business with little more than the money in their pockets and a dream. While quite a few have saved for years, others used business loans or second mortgages to cover startup expenses.

Keep in mind there are many things to consider in evaluating startup cost: typically, whether or not you already have much of the equipment or office supplies, furniture, computers, or other special material specifically for your type of business.

And of course you will need to consider your advertising budget.

Your advertising budget depends on how you plan to market. Word of mouth marketing might cost zero. While heavy advertising in local publications, radio, or television might empty your wallet.

The minimum home office equipment requirements are:

• A computer setup.
• Required software.
• Business cards, stationary, other supplies.
• Business telephone lines.

The average setup cost for a home office is around $2,500 dollars and up!

If you already own a computer with peripheral equipment and software reduce startup by at least half.

Your only cost might be purchasing office supplies, installing a business telephone line and printing up a few brochures, business cards, letterhead.

Next, the question often asked is where will you get the money to start the home business? My first suggestion is to take it slow. The odds are if you start out part time you will not need a business loan.

In fact, most home business owners fund their first business enterprise through a savings account, money on hand, earnings from a full time job, credit cards, income tax refunds, family, friends.

Here are a few startup examples to note:

Mary and her sister decided to start a two woman apartment cleaning service. They spread the word about their business to friends and family. Posted flyers at a local grocery store and in their apartment complex. Total cost: Less than $100.00 to print up flyers, brochures. They already own a car and have many of the cleaning supplies and equipment.

Karol started a biz selling cosmetics and skin care products from home. She informed friends, family and neighbors about her venture. And asked them to pass the word around about her new business. Total cost to get started:$295.00 for the sales kit and samples.

Bob was a business management consultant for a small private firm. After losing his position he started his own small/home business consulting firm. Bob knew he had experience associated with starting a home business because of his own personal dealings. Bob invested in new computer equipment with needed peripherals and software. Purchased new office furniture. He invested in professional stationary and office supplies. And hired a professional advertising firm. Total investment: $20.000 from savings.

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As you might note: start up expenses are varied. What your cost will be depends heavily on the type of business, whether you will work full time or part time and your clients.

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BB Lee is editor/publisher of SmallBizBits News. A Home Based
Business Newsletter packed with info on starting a home biz.
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