PlusStuff

Working from Home

Create a routine

I launched my first venture in a walk in closet.  I was living in Chicago and started a home based business.  My business was primarily phone based and I rarely met with clients in person.  I didn’t have a lot of structure and for the first 6 months or so; I had the cleanest apartment ever!  I would tidy up, do laundry, and before I knew it was 3:00 and I hadn’t gotten much work done and I was still in my underwear.

I had to change my mind set.  I had to trick myself into going to work each day, which isn’t easy when you work in a walk in closet.  I’d get up at a set time every morning, take a shower, get dressed and go for coffee (my early ventures may be directly responsible for the success of Starbucks).  When I returned, I was now at work.  I needed some clear indicator of the start of my work day.

Create boundaries

When we physically “Go to Work,” our family doesn’t expect to see us for 8-10 hours.  And while there may be a phone call or two during the day, there is a general understanding that you’re busy – you’re at work.  It’s important if you work at home that you create the same boundaries.  You’re are at work – even if that means you are sitting in a walk in closet or the laundry room wherever it is that you’ve carved out a little space.

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Tags: Create boundaries, create routine, home based business, Working from Home

Fixed Costs vs. Variable Costs

The difference between fixed costs and variable costs is that fixed costs don’t fluctuate as your sales volume changes.  The landlord expects the same rent every month regardless of whether you are having a good month or a bad month.  Rent is typically a fixed cost.

Variable costs are tied to sales and usually are either Cost of Goods Sold (often called COGS) or some other direct expense tied to sales such as commissions, shipping charges or packaging.  If I were a hot dog vendor – the more I sell, more supplies I need – hotdogs, buns, condiments, sauerkraut, napkins – my food costs are directly related to sales.

There are exceptions of course.  If my business grows dramatically, I may need to take on a larger space thus increasing my rent.

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Tags: COGS, Cost of Goods Sold, fixed costs, Fixed Costs vs. Variable Costs, sales volume, variable costs