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Date: Friday, December 11, 2009
How Does a Home Business Opportunity Cost Compare to Brick and Mortar Businesses?
Even in a recession there is a lot of weighing that must be done before deciding that a new small home business idea and opportunity cost would be less than that of an actual brick and mortar business. Even if you're not the one wondering it will help you when you speak to prospects to have an idea of the money you're saving yourself by selling someone else's products.
Here are just a few of the costs involved in working a business outside the home:
1) Product creation expenses. In almost any industry (with the possible exception of certain service industries) there is the expense of creating products that must be considered before anything else. Without a product or service you have nothing to offer and no reason to go into business.
2) Building. Oddly enough, the building itself (rent, mortgage, construction costs, etc.) may be a drop in the bucket compared to maintenance, lighting, heating, plumbing, running water, and countless other things that are necessary for the building you'd be working in or selling from.
3) Packaging. Not only do you need to create the product you're going to sell but you need to spend some time, money, and material into creating packaging for these products that are going to be eye catching and appropriate for the product, product name, and product use.
4) Research and development for future products. While it might be tempting to bank on one single product the honest answer is that you need to be creating new products or improvements to your existing products even as your primary product is rolling off the assembly line. Research and development often do not come cheap so make sure you invest a good portion of your income each month back into your business for the purpose of R&D.
These are only some of the expenses involved in a brick and mortar business. Think of these things as you measure the home business idea and opportunity cost of a new small online business.
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