You're in business to make money. And the money you earn is called your profit. So why can your home business be more profitable than almost any other type of business you might start? Here are your answers:
- The largest fixed expense for most small businesses is the rent they pay for their office, store, factory or other space they occupy. In most small businesses, rent costs will run from 7% and 10% of total sales–or $7,000 to $10,000 per year for a $100,000 business.
- Next you have heat, light, telephone and other utility type expenses in the space you rent for business. These costs can range from 3% to 5% of your gross sales.
- A gross receipts charge must be paid by some shopping-mall stores. This can range from 2% to 5% of sales.
Add these charges and you'll find that 12% to 20% of your sales are “spoken for” before you start to pay for labor, shipping, etc. As some people put it, “When I rent a store or factory I'm working for the landlord!”
In your own home business you're working for Number 1–YOURSELF! You have NO rent payments, very little, or NO, light, heat, or telephone costs and NO gross receipts charge. So you can add 12% to 20% to your profit–right away!
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