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Tips to Make Extra Money at Home

Want to do what you love and make some extra money on the side? Money Girl has the trick to creating your own home business—and even launching a new career.

By
Laura Adams, MBA,
April 25, 2012
Episode #265

Tips to Make Extra Money at HomeIf you’re ready for a brand new career or just want to make some extra money on the side, starting a home-based business might be the answer. Today, I’ll give you tips to find and launch a business that’s right for you.

Benefits of a Home Business

Saving more of your current income is great—but the upside potential of making more money is unlimited. Creating a second income can be the key to dramatically improving your financial life so you can invest more, pay down debt faster, or accumulate a healthy emergency fund.

In addition to earning more, a side business gives you an entirely new source of income that can keep you safe if you lose your day job. And if the business really takes off, you might even have the freedom to quit your main job and become a full-time entrepreneur.

That’s exactly what happened to Donna, who I recently spoke to about her 6-figure home-based business (that you could easily start). Click here to listen to the full interview.

How to Choose a Home Business

When you’re trying to decide what business to start, ask yourself these 3 questions:

  1. What are people willing to pay me for?

  2. What do I have a passion for?

  3. What work fits my skills and talents?

Providing a product or service that you know people are already paying for—like cosmetics, house cleaning, website design, or music lessons—is a smart way to limit the risk of starting a new venture. Without an existing market for what you sell, you might have a fun hobby—but you won’t have a profitable business. 

You also need to have a deep interest in the work because you’re going to spend a lot of time doing it. That passion is how you’ll maintain your enthusiasm for the business while you make sacrifices like watching less TV, getting up earlier, or working on the weekends.

Taking advantage of your existing skills and talents can also ensure your success in a new business. For instance, if people are always telling you that you’re really patient and good at explaining things, you might be an excellent tutor.

Think about what you already get paid to do or have been paid for in the past and whether you can turn it into a business. Or do you have a hobby that has the potential to be a home-based business, like photography, writing, or building furniture?

How to Make Money Working From Home

There are hundreds of potential businesses you can start. If you’re a technology whiz, computer-based home businesses are hot and allow you to work anywhere you have an internet connection. Here are a few to consider:

  • Web Trader: buys and sells goods through sites like eBay, Craigslist, Amazon or through a virtual store like Etsy. This is great for niche products that you know a lot about like antique books, handmade jewelry, or vintage clothes.

  • Webmaster: works with clients to create, set up, and manage their websites and blogs.

  • Virtual Assistant (VA): provides remote technical or administrative services to assist clients with marketing, publishing, blogging, editing, customer service, and much more.

Visit sites like Elance.com and oDesk.com to see the kind of work that you might have the skills to deliver.   

If you’re not so tech-savvy, here are a few offline businesses that you could run out of your home for local clients:

  • Tutor: teaches students of all ages how to improve their academic performance or skills.
  • Elder Assistant: provides services like errands, housekeeping, cooking, and bookkeeping for the elderly.
  • Pet Sitter: takes care of pets while their owners are at work or on vacation.
  • Massage Therapist: provides therapeutic bodywork.
  • Personal Care Worker: assists individuals with daily living and heath care needs.
  • Product Representative: sells products directly to consumers for branded companies like Silpada, Lia Sophia, and Avon.

You have to be certified to provide hands-on services like massage therapy and health care assistance. But once you get certified in a field that interests you, you’ll have a valuable money-making skill that you can use to build a business.

Two great sites to list your services are Zaarly.com and Skillpages.com, where local buyers can find you by your location and business skills.

How to Launch a Home Business

When you launch a business, it’s important to keep good records so you can claim a tax deduction for allowable business expenses, like equipment, computer software, auto expenses, and office furniture.

While you don’t have to have a separate business checking account right off the bat, it’s a good idea—especially if you’re not a great bookkeeper. But first, you generally have to file a fictitious name form with your state if the business will have a different name than yours. Just ask your bank what’s required.

You can operate your small businesses as a sole proprietor without having to complete any legal forms. However, being a sole proprietor means that if the business gets sued, so do you. To limit your liability and protect your personal assets you can incorporate, which means that a business lawsuit would only put the assets of the business in jeopardy.

You can learn more about the paperwork you need to incorporate at sites like Rocket Lawyer or LegalZoom or by consulting with an attorney. 

No matter if you enjoy working with technology or people, it’s a great time to start a business that helps you diversify your income, expand your career options, follow your dreams, and earn more money.

Download FREE chapters of Money Girl’s Smart Moves to Grow Rich

To learn much more about smart ways to manage your money, get a copy of my book Money Girl’s Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don’t. It’s available at your favorite book store in print or as an e-book for your Kindle, Nook, iPad, PC, Mac, or smart phone. You can even download 2 free book chapters at SmartMovesToGrowRich.com!

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There’s a huge archive of past articles and podcasts if you type in what you want to learn about in the search bar at the top of the page. Here are all the many places you can connect with me, learn more about personal finance, and ask your money question:

More Articles & Resources You Might Like:

How to Find a Second Source of Income

From Employee to Self Employed

How to Save for Retirement Without a 401(k)

Taking Home Office Deductions

Start a Home Business With 6-Figure Potential – audio interview

Woman on Computer image from Shutterstock

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