Financial Mistakes Made by Work at Home Entrepreneurs

July 15, 2013

Being a work at home entrepreneur is very difficult and many people make mistakes along the way. There can be a steep learning curve, but if you run out of money you can find yourself stopping before you have even started. It is wise to make sure that you do not make mistakes with money, or keep them to a minimum. Below are some examples of mistakes that can be made and therefore should be avoided.

Financial Optimism

It is good to be optimistic about how well your business will do. However being too optimistic about how much profit will come in from it can be a problem. You may see a rosy future and start spending as if that money was coming in now. Then there may be a delay or some bills come in and you get in to financial trouble. It is best to only spend money that you have and to not spend in the hope that money will appear.

Financial Pessimism

Being too gloomy about your earning prospects can be a big problem. If you have low expectations, then it is likely that you will get poor results. You need to be positive about how well your business will do and it will get you working hard to make sure that it is a success. If you think it will fail, then it will and you will have no profits.

Getting personal loans to help the business

Some people do get tempted to use a personal loan to pay business expenses. This can lead to trouble. A business loan is tied in with the business and so if the business collapses then the person will not lose any of their personal possessions. However, using a personal loan such as credit card, overdraft or payday loans will always make you personally liable and so whatever happens, you will be responsible for paying it back. If you struggle with this then the charges can be extremely high and so you will get yourself in to a lot of personal debt.

Thinking the lack of business expenditure gives them a licence to spend

If you are working from home, then your business expenditure will be lower. This is because you will not have to pay rent on a property and all the other expenses that go along with that. However, this is not a licence to spend lots of money on the business. You are saving money, but keep it saved, don’t feel you need to spend it on something. Just cover your necessary expenses and keep any savings by so that you can use them when you really need them.

Lowering Productivity by Putting in Too Many Hours

It can be really easy to put in far too many hours when you are working from home. You could be working all of your waking hours as your work is so close. This could lead to problems with productivity as you may not be doing such a quality job because you are burnt out. This will eventually lead to a reduction in quality and therefore fewer customers.

Get your weekly HOME|WORK delivered to your inbox each Wednesday that keeps you up-to-date on ways you can grow your business.

© 2012. The Working House, LLC. All Rights Reserved