Sushi Money

     I’m curious about the reasons many people have started or are thinking about starting a small business at home or with a franchise.  Entreprenuership continues to be a growing focus for many people, young and old.  The lure of finding a way to put one’s financial destiny in your own hands while “working for yourself” is very strong.  Even with full-time professional careers, many individuals and families are realizing the benefits of starting a home business.  Beginning a small business has never been easier in the U.S. and it seems the demand for services and products continue to increase.  Can blogging be considered a home business?  With a myriad of publishing tools and advertising compensation structures (adsense, yahoo publisher network, text-link-ads, etc), blogging can certainly provide an income stream for long-term leading publishers who offer insight, products and services that consumers want. But it takes time, creativity and a lot of desire!  Personally I don’t see this as a business-model per se, but I’m sure some would disagree.  My question about home businesses speaks more to those who create and sell a tangible product.  Crafts, auction listings, t-shirts, health products… something that a seller or business owner markets and ships to a buyer.  You can read stories everyday about someone who began a very small business and within a couple of years grew to an international clientele.  But what drives people in society to do that?  Is it simply a source of revenue?  Or is it something more… the passion and energy to create something that wasn’t there, and to “own and operate” your own business structure?  There are many tax reasons to start a business of course, and for operating a tax shelter.  But it’s got to be more than that… it must be something you really want to do. 

     Many people have used rental income from property as a tax shelter to offset income.  There are few better tax shelters over time if one can afford to operate (and maintain) a rental property.  I know of one case where an individual held a rental property for over 14 years, with negative cash flow during that time, but using the rental for a tremendous shelter to offset taxable income.  At the end of the period the individual sold the rental property for a healthy gain.   Of course without rolling into another investment, or using a “1031 exchange” they had to ultimately pay taxes on the gain and taxes on the depreciation deductions taken each year during ownership. But in the end, it was a very beneficial tool as an investment and taxation reduction mechanism.

     I see the trend for starting and operating a small business only continuing to grow in the years ahead.  The term “explode” may be more appropriate, especially when seeing how technology has revolutionized the ability for anyone to start an online business.  Payment and transaction tools are becoming simpler, and even PayPal has become an incredible tool for web-based business owners to simply moving money between buyers and sellers.

     And then there are the franchise opportunities.  A cursory look through many magazines or sites devoted to business opportunity reveals a ton of advertisements for franchising.  I have never started a franchise business, but many of these opportunities appear to serve the franchise business developer more than as a viable start-up for a new business opportunity.   Many of them are small operations with little promise of back-end support start-up knowledge, and prospective business owners must look carefully at the details for the type of franchise they are interested in.  But that’s not necessarily true for the larger franchise opportunities.  The barrier to entry for the larger franchises is of course money.  It is not cheap to start a larger, proven franchise.  In many ways, it’s a life-changing decision that will involve a lot of money and time to become successful.  Even if the time, money and passion are there to become successful with a franchise, an increasing problem in many areas of the nation will involve finding good employees to help the business grow and succeed. 

     It’s pretty amazing however, that anyone can start a business or create opportunities to make money over time.  As the U.S. and other nation’s populations become older… and we are indeed an aging society, there will be key trends over time for capitalizing on these demographics.  I hope to write more about the demographics and job trends of the future over time, because for anyone who desires to start a new business, those are key areas to capitalize on for success.

Here are a few references for to explore for starting or operating a small business.  There are countless more out there… why do you want to start a business?  I’d love to hear your experience, insight or simply reasons for doing it!

• U.S. Small Business Administration

• Inc.com magazine online

• Inc.com Guide to Starting a Business

• Entreprenuer magazine online

• Home Business Mag Online: Start-up Guide

• Fact Sheet and checklist from University of Maine: Starting a Home Business

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