Many employees do not want to return to work in the office. Aggregated data from surveys done from June to September 2021 by WFH Research shows that 43.6 percent of employees will quit immediately or start searching for jobs that allow full-time remote work permanently if forced to return to on-site work.
The U.S. Department of Labor’s Bureau of Labor Statistics reports that 11.5 million employees resigned from their jobs from April to June this year. An additional four million quit in July, and 4.3 million people or 2.9 percent of the country’s workforce quit in August. More than half stated that they resigned due to burnout and a third stated that they quit because they feared for their health if they went back to office-based work. Some sought higher income.
Some of those who quit their jobs did not seek other employment but instead put up a small business. There has been a surge in new small business applications during the pandemic, according to the Small Business and Entrepreneurship (SBE) Council. From May 2020 to September 2021 the number of monthly applications was higher than those before the pandemic. In September 2021 alone, there were 431,381 small business applications, representing eight percent more than those in August.
Notably, the applications for non-employer business startups from March 2020 to May 2021 were 1.3 million more than those from March 2018 to May 2019. In contrast, applications for employers increased by only 500,00. This means there are more new small businesses that will be run by a single self-employed person with no employees. For such small business set-ups, the most likely arrangement will be home-based.
Identify Your Business
The easiest home-based businesses to start are those that offer online services. You only need a desktop computer or laptop and a strong and stable internet connection.
Information Technology (IT) professionals are among those who are readily able to shift from employment to self-employment. You can provide any level of expertise you have, from website building to more advanced programming and even cybersecurity.
Digital marketing professionals can launch their own digital marketing services business. You can offer SEO services and social media management services, among others.
Writers and editors are in demand as contractors to provide high-quality online content. Accountants can offer accounting and bookkeeping services.
Dropshipping is something that anyone with any skill set can do. You must search for reliable suppliers of products that are in demand. You then set up a website and join an e-commerce platform where you will promote and sell the products. With each sale, you send the order and payment minus your mark-up to the supplier. The supplier then sends the product to the buyer.
Costs and Tax Deductions
Basing your business at home lowers your costs because you save on overhead expenses for rent and utilities. Being self-employed with no employees enables you to save on a regular payroll and benefits. For professional services you will need, it is more cost-effective to hire contractors.
For instance, if you are not an accountant, hire an accountant on contract. This will save you from costly accounting errors and tax problems. Work with your accountant to choose accounting and bookkeeping software that enables you to easily keep your records updated.
Get business insurance in addition to your existing home insurance. This will ensure compensation if your business equipment, software, furniture, client files, and even online data get damaged. Once you need to claim benefits, hire the services of an insurance law firm to ensure that you get the best returns.
The Internal Revenue Service (IRS) allows a home office tax deduction for registered business owners or independent contractors. You must designate a clearly defined space in the home that you will use regularly and exclusively for the business. Your deductions will be based on the percentage of your home’s square footage taken up by your home office.
You can then deduct a percentage of your home insurance, homeowners’ association fees, mortgage insurance, and interest, internet service fees, phone bills, utilities such as electricity and heating, and general home repairs. You can deduct fully any expenses that are specifically the home office. For instance, office equipment, office supplies, and repairs within the home office.
You can also deduct fully any expenses that are directly for the business. For instance, business insurance; startup costs; professional fees for your accountant, legal services, and other contractual services; expenses related to business development and marketing; business taxes; and business travel expenses.
Start Your Home-based Business Now
The earlier you start your home-based business, the sooner it can become profitable. Take note that you will need some time to establish your clientele. Make sure you have enough funds to see you through at least six months or, better yet, a year. Once the profits start coming in, you can earn much more than you did as an employee. The best thing about it is that you will be doing so on your own terms.