A mompreneur's guide to business basics
How parents with home businesses can do it all.
You’ve probably got more than one title: Mom or dad, provider, chief fixer-upper, head problem-solver, career parent—the list is endless. Whether you work at home or in an office, you might be wondering if there’s a way you could take on an extra gig to add a little more income to your budget. If you’ve ever thought about what more money would mean for your kids, family and savings, you’re not alone. Small businesses (including those run from home) are growing nationally, with those owned by women increasing at 5X the national average.1 So, how are they doing it? Here are 7 things parents should know about how to start a home business.
1. Start with a business plan
Many budding mompreneurs and dadpreneurs skip this step, but having a plan from the start can be the difference between success and failure. Businesses of all sizes should have an idea of:
Goals: Where do you want your business to be in 5 years? What do you need to earn to feel successful? Is it something you want to do separately from your kids, or can they work alongside you?
Hurdles: If you’re opening your own catering company, for example, how much will your equipment cost? How many events can you realistically handle each month? Are there city permits or legal requirements to meet? Can you work on your passion while still making it to your kids’ special moments?
Immediate and long-term needs: Initial costs, marketing materials, upkeep and maintenance costs, setting up a system for tracking savings and expenses, etc., should all factor into your business plan. A brick-and-mortar startup can easily cost more than $10,000, but experts say you can start an online business for under $1,000, so doing your research is crucial.
Savings benchmarks: Your business plan should include realistic savings targets to help you hit your goals and overcome any hurdles. And, once it’s running smoothly, continue to save a little for unexpected expenses.
Having a clear plan helps you get the most out of your extra income, as you’ll have an idea of both potential pitfalls and areas of opportunity.
2. Understand your financing needs and options
Once you’ve mapped out your business plan, you can start looking at your financing options. The type of business-from-home endeavor you’re planning to start will affect how much money you need (a photography business, for example, could have higher setup costs than some multilevel marketing programs). Be sure you choose financing that matches those needs and won’t upend your family’s budget. Some options include:
Saving for startup costs: It takes time to save up for a business, but this is often the best course of action. By saving up money first, you can avoid going into debt, owing money to family or putting your retirement at risk. This can be as simple as opening a separate savings account and putting $20, $40 or whatever your budget allows per week into it. Over time, that money will add up and earn interest.
Borrowing from your 401(k): This can be a source of startup funding, but you should carefully weigh the pros and cons before borrowing from your retirement.
Using a credit card: While this can seem tempting, it’s often not your best approach as your debt will accrue interest, and keeping up with payments can add more stress.
Asking for loans from friends and family: If you decide to do this, be sure to document the loan amounts for legal purposes.2
Businesses you can run from home are “small businesses.” Unlike ride-sharing or other side jobs you can run through an app without much oversight, you’re putting a lot of effort into building your own business. There are also resources available through the U.S. Small Business Association (SBA). If you’re willing to do the paperwork, you could qualify for grants, loans or other assistance through the SBA.
Another option to consider is your local bank. Many community banks offer loans or lines of credit specifically for small business owners. Do your research and see which type would best fit your needs.
3. Take taxes into account from the beginning
If you’re using your business idea as more of a “side hustle,” you may not open a business bank account for the money you’ve earned right away. But experts say even if you just open a separate checking account to help you track incoming and outgoing business expenses, you’ll be ahead of the curve when tax season rolls around.3 Plus, that separate account means you’ll have a better idea of what money is going toward your kids’ soccer uniforms vs. what you spent on that new business website.
However you do it (Google Docs, use an invoicing app, etc.), you will need to keep track of the money you’ve earned. When tax season hits, it’s all taxable. It might be a good idea to set aside 20%–40% for federal taxes on your extra income, but state income tax varies. You’ll need to check with your state to estimate those amounts.
4. Keep up with the paperwork
The administrative side of things can seem overwhelming, but successful stay-at-home business moms suggest these tips for getting everything done:4
Make a daily list of tasks to check off, and a schedule that lets you do them.
Use spare time (like when the kids are napping or doing homework) to catch up on email or small things.
Take advantage of apps that handle tasks like invoicing and payment. They’ll let you keep up with your paperwork while you’re cheering on the sidelines of that soccer game or dance practice.
Give yourself a dedicated space to work in (even if it’s just a corner you clear for yourself) instead of sharing the kitchen table with your kids.
5. Prioritize time for family
Juggling a job, child care responsibilities and your side income can be a tricky task. Experts suggest giving yourself downtime with the kids so you don’t forget to enjoy being a mom while you work on pursuing your passion. A recent study of working moms showed that 39% of them work a “second shift” on their business after they’ve put the kids to bed.5 They said this habit lets them use their time wisely and still enjoy being a parent first.
6. Make time for you
Your to-do list may seem never-ending, but it’s important to also take time for yourself. It can be as simple as taking 10 minutes after you get the kids to school to enjoy a cup of coffee and a podcast before you touch anything work-related. Time to recharge your own batteries will give you more energy to work on your side business. While you may be passionate about what you do for extra income, you don’t want to get burned out by doing too much at once without a break.
7. Ask for advice and find like-minded support
Whether you’re a mom or a dad working to give your family that extra boost, it’s a good idea to seek out advice when you’re struggling or stuck. And try to find a network of people that can support and understand the challenges you’re facing. It can be in person or online, but a strong support circle can make a world of difference when you’re trying to do it all.
It can seem like there aren’t enough hours in the day when you’re trying to be a super parent. Work-from-home businesses aren’t for everyone and will require a balancing act between parenting, family and chasing your own creative dreams. But, by using these tips and focusing on maintaining that balance, you can be a successful parent, breadwinner and business owner. And when you’re watching your passion grow and your family is enjoying a dream vacation, you’ll know those extra hours spent on your business have paid off.
This site is for educational purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.
(2016). The State of Women Owned Businesses in the U.S. 2016. Retrieved on August 30, 2017, from: http://www.womenable.com/70/the-state-of-women-owned-businesses-in-the-u.s.:-2016/
Beesley, C. (2016, September 23). 6 Tips for Borrowing Startup Funds from Friends or Family. Retrieved on September 18, 2017, from: https://www.sba.gov/blogs/6-tips-borrowing-startup-funds-friends-or-family/
4 Ways to Survive as a Mompreneur. (2017, May 10). Retrieved on September 8, 2017, from: http://www.modernmombusiness.com/4-ways-survive-mompreneur/
Welker, S. (2017, August 29). 8 Productivity Tips From Creative Work-At-Home Moms. Retrieved on September 8, 2017, from: http://theglitterguide.com/2017/08/29/tips-for-work-from-home-moms/
99designs. (2017). How mompreneurs balance business and family [infographic]. Retrieved on August 30, 2017, from: https://99designs.com/blog/business/mom-entrepreneur-infographic/