How To Make Money On The Side From Home

We're going to give you some tips on how to make money on the side from home. But we're also going to share with you something that can dramatically cut into your profitability when you are getting started, and how to overcome this.

So What Is This Hidden Deal Killer?

Working on the side from home sounds great in theory. You get to make your own hours, be in control, and work at home. If you already have a job, you are still guaranteed your regular paycheck. But when picking a business to do, there's one big concept you need to wrap your choice around, and that's on the subject of fixed costs. Now, fixed costs might seem like a simple, common sense thing but it's amazing how often people overlook the impact that this can have on the income they get to take home.

When you're planning to make money on the side from home, you are basically looking at part-time work which means that fixed costs eat even further into your income than if you were working full-time. That's because many fixed costs stay the same for businesses no matter how many hours you are working. This means that if you are working your at home business part-time, it will be much harder for you to be profitable.

Examples Of Fixed Costs

Here are a few examples of fixed costs. The following are recurring costs that may not seem like much but when they occur monthly or annually, they can end up being much larger than you anticipated:

Recurring Costs
  • A dedicated phone line
  • Website hosting fees
  • Email autoresponder that you use for prospect and customer follow up
  • Minimum monthly purchase required in order to get a commission check
  • Paid advertising

Then there are the one-time purchases, such as:

One-Time Purchases
  • Equipment like computers, video cameras
  • Computer software
  • Training courses you take to develop your skills
  • Office furniture

When you have been able to put more time into your business and your income from it has grown, it becomes easier for you to cover these expenses and increase your profitability. But in the start up and beginning phase of your business, fixed costs can really cut into your profits.

So keep in mind that if you want to work on the side from home, you will need to thoroughly analyze and estimate your income versus your expenses.

A Tip For Solving This Problem

It really is amazing how your fixed costs can eat you alive in the beginning unless you are careful. But there's also another aspect to fixed costs that a lot of people don't consider. And that is taking a detailed look at these costs from the perspective of the type of business you are choosing to do from home. That's because even though businesses may seem very similar at first, they can actually have very different levels of fixed costs.

Optimizing Profitability Examples

Here are a couple of examples of choosing a business to optimize your profitability.

It's best to start by using knowledge you already have to create a business so that you can keep expenses to a minimum. For example, because I had worked as a legal secretary in the past, when I was at home with my baby, I did freelance legal typing for a local estate planning attorney. All I needed was my computer which I already owned.

In contrast, if I had chosen a different business model in order to stay at home with my baby like providing day care for children, I would have had to buy supplies and equipment, get licensed by my state, have first aid certification, and meet health and safety requirements in my home. All of which would cost me additional time and money.

Here's another example. Let's suppose you love to cook. You've thought about starting a catering business from home. What kind of fixed costs would you be looking at? Ingredients would be a big one. Another one would be transportation. You have to get your platters of food to various venues where events occur. There's also the added complication of health regulations required for food prepared in your home as well as the liability risk of serving food to lots of people.

Now let's look at taking your same skills and becoming a personal chef instead. Your clients pay for the ingredients, one of the largest fixed costs. You work for a few clients in close proximity to you so transportation ceases to cost much. As long as you are preparing food in the clients' homes, you don't have to worry about health regulations, and your liability risk decreases because you are serving food to less people.


So when you're looking at ideas on how to make money on the side from home, carefully consider the costs involved with various business models. The reason it's so important is because when you're planning on working part-time, fixed costs have a much larger impact on your profitability.