Homegrown Income

Yesterday, I wrote about why I think paying off debt is the best use of one’s tax return money. But, everyone’s circumstances are different. Sometimes, there is nothing left to cut from the budget to make ends meet. There is only one solution: increase household income.

Some people work two jobs, or raise money to pay off specific bills by having a yard sale, and many people turn to government programs like food stamps to bridge the gap. All of this helps, but I would strongly recommend opening your own business for long-term, sustainable income.

Can you sew, make alterations, follow a pattern? You can have a business!

Can you sew, make alterations, follow a pattern? You can have a business!

Starting your own business can be intimidating. Outside of certain careers, most people don’t consider this option. Perhaps, they were never encouraged to do so. Working as an employee for an established company has offered job and income security in the past, so it’s understandable why people are encouraged to get a job instead of create one. However, I am not convinced that this strategy still works.

As a consequence of this lack of emphasis on taking an entrepreneurial approach, many people don’t have a clue how to start and grow a business. Venturing into the unknown is often uncomfortable. This is where resistance to the idea of striking out on your own begins. If you are a homesteader, however, you already have some experience to draw upon with striking out on your own.

If you have tons of questions, you’re not alone. What kind of business? Will I have to quit my current job? How much money will I need? Do I have to go back to school? What kind of red tape will I have to cut through? What about health insurance, retirement benefits, and vacation/sick time? Can I really do this? How long will it take to earn a living? What if I fail?

No doubt, getting a business off the ground takes time, effort, and determination. The same could be said for finding and working two jobs and juggling their schedules. However, working two jobs does not offer the tax benefits that having your own business does, or the potential of becoming the only source of income you need. Creating a business is a sustainable source of income as opposed to a single fund-raising event, and without question it allows you more control over your finances than dependence on a government program from which funding can be cut.

The benefits of having your own business need to be considered, not just the challenges. One of my favorites is that you get all of your income upfront, and then are able to deduct legitimate business expenses from that, which is your net income. Your taxes are based on that reduced net income. As an employee with a paycheck, the taxes are based on the gross income, not the net income.  Other benefits can include setting your own schedule, setting your own rate, not having to ask for permission to take a few hours off to attend your kid’s baseball game or to make a doctor’s appointment, and earning a living doing something you love doing anyway.

One farmers market vendor twho we know personally sells potted plants at markets 5 days a week, making $700 per week.

One farmers market vendor who we know personally sells potted plants at markets 5 days a week in different towns, making $700 per week.

If you are thinking of using some of your tax return money to start your own business this spring, here are some things to keep in mind.

  • What do you enjoy doing? 
    If you are going to go through the effort of starting your own business, you get to pick what kind of business. You are meeting the economy on your terms now. Do so by choosing something you like to do! What are your hobbies? Do an internet search to find other people who knit, keep bees, raise chickens, grow roses, make herbal hand lotions, build garden benches (or cold frames, or coffee tables), or whatever you are into, and see how they are making  money at it. I know people that make jewelry at home, and just post on Facebook that it’s for sale. A Paypal payment and a trip to the post office later, and you’ve got a business. That can be done with a smartphone and cell-phone signal only- no additional internet service, additional camera, expensive marketing, etc.Some people draw an income writing about their crafts, selling patterns, provide ready-made weekly menus and corresponding  recipes, or produce e-books. You can take advantage of both real-life (farmers’ markets, flea markets) and online (Etsy, eBay, and Amazon) marketplaces, to reach lots of customers/clients quickly.

    If there is something you have a burning desire to do, but you do not have the money, set up a business just to earn the money to start the business you really want. Make that part of your business plan (see below). So what if you have to take things in stages? You will gain experience while earning money at each stage, and get closer to your goals at the same time. Time is going to pass anyway. It may as well pass working towards creating a life you enjoy.

  • Make a plan. 
    Successful business do not just happen. They start with a business plan. A lot of people skip this step, and this is why a lot of businesses fail. It is the least favorite aspect of starting a business to most people. It requires some research, some planning, some risk assessment, some math, and a fair dose of soul searching. The information you gather in creating your business plan is as good as gold, and something most failed businesses completely undervalued. Not only does it help you clarify why you are working for yourself, what your purpose, mission, and goals are, it can point out where you need to be cautious, areas where you may need to ask for help, actions that generate more income than others, and much more. Do not skip this step.
  • Stop saying, “I can’t.” Start asking, “How can I?”
    It’s true. Roadblocks exist.  Red tape, money issues, and many other things out there that will appear to conspire against your best intentions. Instead of giving up, and saying, “Well, I can’t do this because (insert negative belief here),” ask yourself, “How do I get from where I am now, to a point where this is no longer impossible?” Thinking outside the box is often an underdeveloped skill.If you cannot see how to get to that point, ask someone who has. Just because you haven’t come up with a solution, doesn’t mean someone else won’t be successful at finding one. Don’t, however, go find every Negative Nancy that you know, and ask them how to get there. They will only reinforce your belief that something can’t be done. Get advice from people who get things done.
  • Keep it simple.
    Start smart, which may mean start small. Don’t up and quit your current job. Base your business around the hours you have available outside of work. Set business goals that are a challenge, but still doable for a part-time endeavor. In other words, stretch yourself enough to grow, but not so much that you can’t maintain growth. Schedule down time to connect with friends, family, and just to be alone.Of course, if you are unemployed, or under-employed, you have a lot more time during the day to make a business happen. You may not have a lot of funds to get started, but we are approaching tax return time, and you also can invest time and labor instead. If you don’t have the land or the space to grow extra food, herbs, eggs, or other common farm items to sell, and part of wanting your own business is to create the money to buy land for a homestead, look into cleaning houses or small offices. Offer to do a few for free in order in exchange for references. If you can sew, you can offer alterations. When the economy gets tight, people buy fewer new clothing items, and will get items hemmed, taken in, let out, repaired, etc. Look for opportunities like that.
  • Keep your overhead low.
    If you are working from home, you don’t have to rent office space (you can, as of this writing, deduct your home office expenses from your gross income on your taxes). Look for opportunities like starting seedlings and selling them at a stand outside the house, or at a farmers’ market (very inexpensive to participate in). For the investment of potting soil, a soil block maker, and seeds, you can plant hundreds of seeds and sell the resulting plants (there is an inexpensive gizmo that makes the newspaper pots). You could even make the pots out of newspaper, and eliminate the expense for plastic pots. Even if this isn’t what you had in mind, if you put the effort into growing healthy plants and marketing your business, you can earn the money to help you start something you really want to do.A word about going to school to get additional skills… This only makes sense in certain circumstances. People will say that no education is wasted. That’s true to a point. All education has value, but that value may not be enough to justify the expense. Unless you have a deep, burning desire to do something that requires highly specialized skills and/or knowledge, or has licensing requirements with specific educational requirements, perhaps it’s a better investment to look into some basic business management courses, or even some solid business management, marketing, and/or skill-related books. A small investment in easy-to-use accounting software, like Quickbooks, will handle your bookkeeping, so need to pay for a class, tying up both your money and your time. For almost any hobby or skill, you will find plenty of information online for free.

    Just keep in mind, you don’t need to go to college to teach a home canning class, and you could use your own equipment to demonstrate without any need to take out a loan. Take this approach and modify it to the kind of business you want to create.

  • Don’t listen to naysayers. 
    Naysayers seem to put down everyone else’s dreams and insist almost everything is impossible. This is their own baggage. You don’t need to carry it for them. I’m not talking about anyone who you may have asked to review the risk assessments for your business plan. There’s a difference between looking at risk honestly, and being a naysayer. If you’re doing risk assessment, this is to be informed, be aware, and mitigate potential risks. Naysayers just drone on about how you can’t do whatever it is you want to do. Thank them for their concern, and get back to your business.
You know you want to be at my game. :)

You know you want to be at my game. 🙂

I’ve included a lot of individual ideas throughout this article to hopefully spark some ideas of your own. It’s really easy to get down in the dumps when money is tight, you can’t do the things you want because of it, and there doesn’t seem to be an end in sight. I offer this challenge to you that there is something you haven’t thought of yet. It’s time to go find it. Try something. Have faith in yourself.

 

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