Don’t get overwhelmed with it
What does WAHM mean anyway? The world of work-at-home can be confusing and overwhelming for someone who’s just toying with the idea of “what if”. Beginning your online business can be challenging when there is so much jargon. Figuring out what applies to you and what you need to know can seem impossible. All the terms can be meaningless until you get some context.
Starting a business doesn’t have to be complicated. It isn’t always easy, but that is more likely because of the work involved. It shouldn’t be because you need a translator just to figure out the basics.
What is work at home?
Work-at-home simply refers to any kind of regular activity that you do from your own residence, for which you get paid.
This could be something as simple as crafting baby hats and selling them at farmer’s markets. Maybe you have a home daycare. It could be a job where you are a virtual call-centre customer service representative. Or you’ve been hired to transcribe medical records or do real estate data entry.
It could be something more, such as a direct sales business or network marketing business that you’ve taken on. Or even something where you have a home office, set business hours, and you’ve taken the time to legally and financially declare yourself a business.
Whether you have a job or a business, if the majority of the money-making activities take place in your home, it’s work-at-home.
WAHM/WAHD are acronyms that spelled out say work-at-home-mom or work-at-home-dad. These refer to parents who manage to work from home and take care of children at the same time. There are many times that parents who work from home have different needs and priorities than someone who is childless — and different challenges.
Working from home as a business owner
A business opportunity usually means a direct sales or network marketing business which is trying to recruit new representatives. Sometimes, it will refer to an existing business or franchise that is being offered for sale.
Types of businesses
1. Direct Sales
A direct sales business is a type of business that typically uses some form of catalog and home parties to create sales. The head office will take care of branding, product manufacture, and marketing materials. Individual representatives purchase “kits” of those products and marketing materials, and use them to promote the business. The individual reps get commission off sales of the products, and extra bonuses for recruiting new reps.
Read more: Your Direct Sales Business
2. Network Marketing
A network marketing business is similar to a direct sales business, but here the head office also takes care of shipping products directly to the end consumer. Generally, product sales are in the form of a recurring subscription or automatic shipment of some sorts. Representatives purchase their kits, but sell the subscriptions or memberships rather than the products themselves. They also get commission off all sales of products in their organization. They also get significant bonuses for recruiting new reps.
Read more: Your Network Marketing Business
3. Entrepreneur Businesses
A. Sole Proprietorship
A sole proprietorship is a type of business owned and run by a single person. That person is the one that started the business from scratch. They handle all product manufacture and provides all the services. They may subcontract or hire out certain business functions, such as bookkeeping, administration or marketing. Ultimately the sole proprietor is the boss.
B. Limited Liability Corporation (LLC)
A limited business is legal term for a business where the owner gets some financial protection from their business. It’s the first stage in separating the business from the owner, and creating two separate entities.
Unlike the first three kinds of businesses, this kind of business can stand on its own, outside of its owner. The owner is protected from debts the business may have.
But it’s operated and run very much like a sole proprietorship. Generally, it’s the next step up from a sole proprietorship business, as business profits and sales grow.
A corporation is a completely separate thing from it’s owner(s) and founders. Most people think of corporations as these big, multinational businesses that are complex, but most corporations are actually quite small.
A business owner might decide to incorporate their business, when they are ready to sell it, sell pieces of it, or need to bring in extra financing to grow or expand a business.
There are certain legal and financial advantages to creating a corporation, but there are also some legal and financial complexities to it. You need a lawyer or accountant to help.
No matter the business type, all businesses sell a product.
Product refers to what a business sells. Sometimes it will mean the service they provide rather than a physical or digital “thing”. Every business has to have a product in order to be legitimate and genuine. If there is no product — nothing to sell — then it’s just money changing hands, and generally that’s illegal.
Marketing your Business
A market, in business terms, refers to the customer base or audience that is the recipient of the marketing and sales actions of the business. The market is who the business is talking to, and trying to sell to. Figuring out who that market is and what they want, need and like is a big part of what businesses must do in order to be successful.
A niche is the specific target area that a business or entrepreneur will specialize in. It’s the specific need that business meets, or problem they solve. While any store can sell milk, a niched store will sell organic milk, from a variety of sources – cow’s, goat, camel, sheep, etc. The store that specializes in the organic milk has a better marketing strategy and more loyal customers than the one that doesn’t specialize at all. That’s the power of niche marketing.
Marketing means those activities used by a business to tell the world they exist. All marketing is designed to create name and brand recognition. Generally, the purpose of marketing is to get people to know who or what a business is, and what they do.
The term sales is similar to marketing, but a little more specific. With sales, the business is looking to get customers — to sell a product or a service directly to someone, and make money. That’s why we can refer to sales and marketing, because the two things will overlap. But they aren’t quite the same. Usually you have to have marketing before you can have sales.
Social media is a term that includes all those sites where we like to socialize — Facebook, Twitter, Pinterest, Instagram, etc. Some experts include blogs like this one, message boards and email lists as part of that grouping. But most of us use the term “social media” to mean just the sites we login and check daily (hourly?!)
All the terms surrounding what it means to work from home can be confusing. While you don’t have to start a business to work from home, it is one of the most common ways to earn money from home.
The online world of Work from Home
If the world of work-at-home wasn’t confusing enough, going online and trying to earn income just adds chaos to it all. There’s an entirely separate language when you work online. Working from home shouldn’t mean you need to start learning a new language just to get started.
For most of us, working from home means you must work online in order to be successful. Getting started online is relatively easy, but doing it well means knowing the terms. There can be a steep learning curve!
Starting online means starting with a website.
A website is a home-base on the internet. It’s where you point potential customers to, in order to share your self, your business, and your services.
A website has 3 key defining factors:
1. Domain name
The domain name is the website’s internet address. It’s the “www.” that gets typed in to find you. Also known as a “url”, the domain name needs to be custom, memorable, and short. The domain name pinpoints where you are and gives a quick peek into who you are and what you do.
The hosting is the behind-the-scenes framework that holds your website together. This includes the company that pins your website onto the global internet system, using the domain name as the address, and the software that allows you to create and customize your site.
There are several hosting companies to choose from, including more well-known ones such as GoDaddy, BlueHost, and WordPress.com, but my personal recommendation is SiteGround, for its phenomenal technical support and customer service, as well as ease of use and user-friendliness.
3. Content Management Software
The software used to create your site can also vary from hosting company to hosting company.
WordPress software (not to be confused with WordPress.com) is one of the more popular ones, powering up to 15% of websites on the internet. It has a great deal of customization available, with a variety of themes (color schemes and website features), and the ability to have a designer build it from scratch.
Another popular option is SquareSpace, especially for those businesses that sell products. Other possible software choices include Wix or Weebly.
When you design a website, you may run into strange marks and codes. These are the backbone of what really creates websites. Luckily, most website design software doesn’t require you to know these codes. You can drag-and-drop, and do a lot of design by yourself, and still get a decent looking website.
However, the most common coding references are HTML and CSS.
HTML is the computer coding language that most websites are written in. It’s the building blocks of web design. HTML codes let you put text, images, videos and all the other pieces of website together in one coherent form. Unless you are a web site designer, most of the website builders don’t require you to know or understand HTML anymore.
CSS refers to the specific part of a website that controls the colors, fonts and styles on your website. Again, unless you know HTML or are a website designer or graphic designer, you don’t need to know how to create or edit your CSS.
What to put on your website
Putting up a website isn’t the end of your job to create an online presence. Once you’ve created the website and it looks all nice and shiny, it’s time to work on creating your voice and message online.
Content refers to the blog posts, pictures, graphics, videos, podcasts or products that you create, share and sell to your clients. Creating content is how you show off who you are and what you do. Content is the core of your online presence. Without content, you can’t attract, sell, or retain customers.
1. Blogs, vlogs and podcasts
A blog is a type of website or content that uses text and images to give out information. Blogs are updated on a regular, if not frequent, basis — usually weekly. Blog posts include lists, interviews, how-to tutorials, reviews, personal stories, and descriptions. A vlog is similar to a blog, only in video format. The audio version of blogs are known as podcasts. They should be entertaining and educational, so that readers will want to keep coming back.
2. Online store
An e-store or e-commerce site is a website that allows customers to shop online. It will usually have an online catalog, showcasing products, information about the products, the store and shipping/delivery options, as well as a shopping cart system that lets customers choose their products, pay for them and arrange for delivery.
A static website is a website that has one or two unchanging pages. Used mostly by brick-and-mortar businesses, static websites offer directions and contact info, hours of operation and a description of the business. They do not allow for an interactive experience for the customer.
A portfolio website is a website that showcases the work of the professional. Most photographers, designers and copywriters need portfolios. They will display samples of their work, offer testimonials and references, descriptions and pricing of services, and a way to connect with the business owner.
4. Memberships and online courses
A membership or e-course site is the kind of website where the client will set up an account and pay a fee, monthly or single payment, in order to gain access to a restricted and private part of the site. It will have a home page with a description and a way to sign up, a login page where members can put in a username and password, and then the rest of the site with its private exclusive content.
Getting Seen Online
Creating the content is a very important part of your online presence, but it isn’t the only thing you have to do. Once you’ve created the content, you need to make it visible and accessible by the public.
1. Connect to other sites
Linking refers to joining together two separate websites. This may be through creating a hyperlink — a section of the text content that allows the reader to click on it and be taken to a different website — or by using a scheduling or automatic publishing tool.
You can create backlinks, by getting your site’s content mentioned on other sites, using “dofollow” links. Dofollow means that search engines will transfer “rank” from one site to the next, and nofollow means the opposite. The more dofollow backlinks you can create, the better your site will be seen by Google, Yahoo, Bing and others. And the fewer dofollow links you create, the better your site gets seen too.
2. Share on Social Media
A scheduler or automatic publishing tool will publish content that is created in one place on to another website, specifically social media platforms, such as Facebook or Twitter. This means that you don’t have to recreate content more than once — you can create it once, and then send it out to your website, as well as all the social media and other sites you may want to use to find customers for your business.
Schedulers and automatic publishers vary in price and features. Some of the more popular ones include HootSuite, Buffer, Agorapulse, and SproutSocial.
3. Search Engine Optimization
SEO means “search engine optimization”. This uses “keywords” — specific words that are highlighted in your content — and tells the search engine (sites like Google, Bing, Yahoo, etc) to list your site as a possible answer to the search for that specific word or phrase. Good SEO puts your site higher in the search rankings of sites when someone searches for information on your keyword.
A keyword is a word or phrase that you are highlighting in the text of your content – ad, blog or graphic. Keywords get picked up by search engines so that when someone searches for that word or phrase, your content will come up on the search engine as an answer to that keyword search.
The Learning Curve of Marketing
One of the steepest learning curves for getting started with your own business is marketing. Whether you own a brick and mortar store, or work out of your bedroom as a freelance graphic designer, you need to get the word out there about your business. Marketing is what we call all those activities that shout out that you exists, what you do, and what you have to offer the customer.
The first part of marketing is branding. Branding is what creates that feeling. Part of branding is very visual, so choosing specific colors, fonts, style and patterns is all part of branding.
A logo is the “face” of your company — the first thing your potential customer usually sees online. That logo needs to tell your customer everything about your company, in a glance, so getting it done professionally is important.
Voice refers to how your brand will “speak” to your audience. Is there a fun-loving casual feel? Is is rich and luxurious? Or are you looking to be more formal? A more casual brand can use acronyms, “text-speak” and light-hearted memes with ease, but a more formal brand will be able to use wealthier symbols, stats and figures, and will use more professional language.
No matter what kind of advertising you use, online or off, there are certain elements that are common to all.
a. Call to Action
A call to action is what you want the customer to do when they see your advertising. Online, this might be click to purchase, or sign up for the newsletter. Offline, it might be to call a phone number or visit a location.
b. Conversion Rates and Click-through rates
The conversion rate is how effective your advertising is. Usually this is how many sets of eyes viewed that piece of advertising verses how many actually responded to it. Online, this is often tracked by the “click-through” rate.
Click-through refers to people who click on your ads or social media posts to your website. Tracking the rate of click-throughs versus views helps online marketers determine how effective the marketing is.
Ultimately though, the conversion rate is used to help determine if the advertising was cost-effective. How many sales resulted as a direct result from that ad? That’s what businesses need to know to make sure they are spending money on advertising in the right way.
Online Marketing and Advertising
1. Where do you advertise?
Online advertising can be anywhere on a website. It can be a small text ad at the bottom of a webpage, a banner ad that stretches the width or down the side of the webpage or an ad that comes up on a social media feed.
2. How much does online advertising cost?
Most online advertising is sold on a pay-per-click (PPC) basis. That allows business owners to control their budgets better, by only paying for the potential customers that actually click on the ad, rather than just paying for a set amount of time or views.
Sometimes it’s sold on a pay-per-impression (PPI) basis. This means that advertisers will pay based on how often an ad is seen, instead of how often it’s been clicked on. For high-traffic ad placements, or for certain types of ads (such as free physical events) this makes sense.
3. Where do you link your ads to?
The landing page is what all those click-throughs go to. It’s the first page that your audience sees, and is the first impression they get. A landing page, also known as a lead page, is what you’ll use to collect information about your audience, or sell them something.
4. What do you advertise?
The purpose of collecting the information is to build an email list. An email list is a list of your audience’s names and email addresses, and will let you be able to market more directly to them. You will use an email marketing provider to collect the email addresses and send them emails. Popular providers include Convertkit, MailChimp, AWeber or MailerLite.
Some people will use a lead magnet, also known as a freemium, or free gift, to encourage their audience to give them the contact information. This is simply a small, digital or virtual product you give away in exchange for a name and email address. For example, you could give away a checklist, a coloring book, or a reference list.
Most lead generation like this requires an opt-in, which means that your lead or contact explicitly gives you permission to email them. If they choose to unsubscribe, this is also known as an opt-out.
Selling as an online business owner
The ultimate purpose of all this marketing is to actually sell something – service or product — and make money. How you sell and do all your marketing will depend on if you are marketing B2B (business to business) or B2C (business to customer).
The CRM (customer relations management) system you use will help you keep track of your customers’ information, and you’ll pick that based on your needs. There are lots out there, from simple email management programs to more comprehensive systems.
1. Sales Pages
Online sales usually start with a sales page. Similar to a landing page, this is a page specifically designed to sell a product or service. It will list all the features (describing the item) and benefits (what it will do for the client or the results they’ll get) to the customer, and have buttons or places for customers to actually buy the item.
Read more: Sales Pages Sell Products
2. Sales Funnels
Sales pages are part of systems called sales funnels. This is a system of marketing, especially used by high end coaches and service providers, that uses a system of lower end products and service options to lead a customer into buying the high end signature item. So it’s a specific marketing technique that, used correctly, will create consistent income.
Read more: Sales Funnels Create Customers
Affiliate marketing/sales is where online businesses will gain commissions by referring their audience to another business’s product. Every sale from an affiliate link gives a little bit of money back to the referring business. Most of these are marked as affiliate.
For the business owner offering affiliate commission, they get more sales, exposure to a wider audience, and the ability to control their advertising budget better. For the affiliate marketer, they get commissions based on the sales. So it’s a win-win for everyone.
4. Products in the sales funnel
A trip wire product (or introduction product) is the initial product in a sales funnel. This is usually a lower priced product, such as an ebook, a one-time workshop class, or an audio/video lesson, usually priced between $20 and $50.
A signature product is the high end product or service — a 6 month or year long class (or mastermind), a series of ongoing coaching, etc — that ranges in price from a few hundred to thousands of dollars.
Marketing is Necessary
No matter how you do it, you need to market yourself. You won’t have any clients or sales if no one knows you exist. No one generates income by slapping together a website and sitting back and waiting for phone calls. So you have to get out there and build a following, collect contact info, and talk to people. Marketing is the lifeblood of your business.
Making Money Working from Home
When starting to work from home, one of the most confusing things can be managing your finances. What’s the difference between wages, commissions, and profits? Do I really need to know the break-even point? Which numbers are important and which aren’t? The financial terms relating to running a business or working freelance can often be so baffling it prevents some from even starting.
We all want to work from home to make money.
Dealing with the money you make — keeping those records, reporting properly, and managing everything — can be simple, if you know the lingo.
There are 2 main forms for every business: the balance sheet and the profit & loss statement. While on the surface they look similar, there are a few key differences.
1. Balance Sheet
The balance sheet is the statement of where the business or freelancer stands at that point in time, in terms of finances. It lists all the things the business owns or expects to receive in cash value, and all the items the business owes or needs to pay, in cash value.
All the things in the positive column are called assets. Assets are the stuff that the business owns or money it has received or expects to receive — money coming in, or things worth money.
Accounts receivable refers to those payments that are expected in to the business. For example, if a freelance wedding photographer has had a contract signed with a client, but not yet received final payment, that money is still in the accounts receivable, not as cash. It’s owed them, but hasn’t been payed yet.
All the things in the negative column are the liabilities. Liabilities are all those things that the business needs to pay or has paid for. We call these the accounts payable.
Similar to accounts receivable, these are the payments the business owes to services it needs and uses. Here, you could list things like the heating bill, office rental bill, or internet bill. It’s a catch-all to refer to all those expenses that happen over and over again, without having to list them separately every time.
The difference between the two sides should be a $0, so that all the money paid out matches all the money that was brought in or the equipment and other things the business owns.
2. Profit & Loss Statement
The profit & loss statement (also known as a P&L) shows a picture of the money going in and money going out, at a specific point in time. Similar to a balance sheet, the P&L doesn’t list any equipment or real estate owned or purchased. It only looks at the activities that the business or freelancer does to make money and the money they make.
The difference between the two sides should be a positive number, as that means the business is making money. If it’s a negative number, the business has had a loss. That’s usually not a good thing, so if the P&L is showing more loss than profit, the owner may want to change something.
3. Income, Expenses and Profit
Income is the term we use to mean the money that is coming in. This comes from work done or products sold. Expenses are the opposite. That means the money that is going out. Expenses are the recurring payments needed to makes sure the work can be done and the products can be sold. So expenses include things like the cost of inventory, electricity or telephone service bills, or hiring someone to help out.
Profit is the difference between income and expenses. If the business makes more money than it has to pay out, it’s making a profit. If it’s paying out more than it’s making, it has a loss. All business owners and freelancers want profit!
The break-even point is the point where the income equals the expenses. It’s where profit begins. Paying attention to what the break-even point will be is a very important part of starting a business. If the break-even point is too high, you won’t make a profit.
Profits mean the money earned by a business owner on their business. They can only be calculated after all expenses and costs of doing business are paid, and after any investments back into the business. In a corporation that sells shares or stocks, those profits are divided up and paid out as dividends to the shareholders, based on how many shares they each own.
Breaking down your income:
Cash flow refers to the specifics of cash money that comes in and out of the business. While the accounts receivable and payable refer to what’s expected, the cash flow statement states what actually is. This will change drastically from moment to moment as bills get paid, one way or another.
1. Getting paid
Wages refers to the money earned in exchange for hours worked. Some bloggers use the term “dollars for hours.” Mostly, wages are paid out for jobs, usually at an hourly rate. Sometimes, wages will be in the form of a salary, a pre-determined amount of money not related to the number of hours worked.
Commissions are the money that is earned on sales for or referrals to another business. Most direct sales and network marketing reps get paid commissions. Commissions are treated differently than wages on most tax forms. There can be deductions made to income based on commissions, that can’t be claimed on income based on wages. Check with your local accountant or tax-preparer for assistance on what applies to you.
2. What your business owns:
Equity: This is basically the difference between what you own and what you owe. Most of us are familiar with the term when it comes to owning a house. As you pay off the mortgage, your equity in the house — the part that you own — increases. So that when you sell, you get more money coming to you, and less to the bank or mortgage company.
It’s the same with your business. Hopefully as your business grows, the profit that you gain will increase your equity, because it will outweigh the costs of doing business.
Depreciation: This is how the physical assets of the business are valued over time. Unless it’s real estate, most physical things you own go down in value, the older they get (until they get so old they become antique). That’s why it’s usually cheaper to buy used than new. Things like cars and computers are depreciated over time on the balance sheet, meaning their value becomes lower.
Know What Your Numbers Mean
Hopefully this little financial cheat-sheet will make your next meeting with a tax preparer or accountant less stressful. If numbers aren’t your thing, it’s no shame to hire someone to help you keep the books. But you at least should know what the numbers are, and what they mean to you and your business or work at home opportunity.
Hire it out
Getting started working from home online can seem daunting. But once you understand the language of your online presence, setting it up isn’t actually that difficult.. You can do it yourself, and still have it look good. Or you can hire someone to do it for you. There are options for every budget.
Who to hire?
You can hire social media managers, who can create, schedule, post and respond to your audience on a variety of social media platforms. They’ll also share your posts, and create campaigns to grow your followers, website traffic and clients, depending on your goals.
Or hire a virtual assistant, someone who can handle many of the admin, research or customer services parts of your business. A graphic designer can create your logo, headers, social media posts, or even help design your digital products.
You may also want a copywriter, someone who can write blog posts, sales funnels, emails or other content for you. And a coach, whether for your business or other area of your life, can help you plan, strategize, stay motivated and stay on track to your goals.
As your business grows, you’ll want an accountant, or at least a bookkeeper, someone who can take care of the financial details and make sure your taxes get paid on time. And you may eventually grow into needing a lawyer, for contracts, copyright and incorporation.
Being your own boss isn’t always easy
The online world can turn the difficulty level up a notch or two when you’re the boss. But while the language of working from home online can be confusing, the benefits of self-employment and freelancing are worth the effort.
Do you want to work from home? Do you want to work for yourself? Start with a plan, and learn the language. It’ll shorten your learning curve immensely.
What’s stopping you from starting your own business?
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