Many small businesses and home business ventures are looking for ways to cut costs. And that is understandable. We are in a recession. Happily, there are a few things that you can do to save money for your home business. You may even be able to save enough that you won’t have to fire anyone. Here are 4 things, from TheStreet.com, that you can do in your home business to cut costs:

1. Reduce your meetings. Whether it is meeting a potential client in the coffee shop or traveling to a conference, you can reduce your meetings. Technology has provided a number of tools, from video conferencing from your computer to arranging cheap phone calls using Skype.

2. Renegotiate. You can renegotiate your contracts with suppliers and service providers. Look at the last time you negotiated your deals, and see if you can do better.

3. Give up some luxuries. Even the home business has some perks. I used to buy lunch a couple times a week, just to “get out” of the home office. Now, I brown bag it and take my lunch to a local park and just sit and eat. For larger businesses, there are bound to be other luxuries that you can give up.

4. Go paperless. You can reduce your costs by going paperless. While a paperless home office isn’t for everyone, you might be surprised at what happens when you start emailing or faxing invoices, rather than printing them out and mailing. (Saves on postage as well.)

If you have multiple Web sites, or multiple emails for different purposes, things can become pretty confusing. However, you can reduce the stress and confusion by consolidating email addresses and assigning certain address for certain purposes. And if your home business has progressed to a point that allows you to outsource some of your administrative functions, you can even enlist the help of a virtual assistant to help you.

Lynette Chandler at Sparkplugging offered this helpful information on changing the way you do email for your home business:

The first thing I did was decide which addresses I wanted to keep. Once they were decided, the addresses were assigned a specific purpose. For example, one is strictly private, for personal stuff, staff and clients only. No exceptions. Then another was for mailing lists. Then I have one ‘public’ address and there’s another for support for all products, services, websites.

Just doing this cut down my email confusion considerably but that wasn’t the only thing I did. I hired someone to check, manage and respond to all the other addresses but one. Now, whenever someone asks me for an email address, during an interview or setting up an email list, I use the public one.

It is possible to get organized with your email addresses. And once you do get organized, you can cut back on some of the time you spend dealing with paperwork and focus more on improving your home business.

So, unless you live under a rock, you know that Michael Jackson died yesterday. In honor of him, I decided that I would share this great performance of “Billie Jean”. This was the performance that introduced the world to the moonwalk. No matter what became of him later, Michael Jackson was a great entertainer.

RIP Michael Jackson.

Many home business owners are being affected by the economy right now. However, even though leaders keep trying to talk about “economic green shoots”, it is far from certain that they will remain in place. Indeed, some of the optimism about the economy seems to be waning. Today, two important indicators put a damper on the economic party:

1. U.S. GDP has contracted.

2. Unemployment claims jump.

The U.S. has seen continued contraction in GDP, and unemployment claims, after slowing a bit, are now jumping again to higher levels. The GDP news has a silver lining, though; it contracted by less than expected. The jobless claims continue to be a problem. As long as unemployment continues to rise, it will be difficult to make inroads in other aspects of the economy.

With the digital world omni-present these days, it is little surprise that paperless is becoming a way of life. Indeed, I can’t remember the last time I sent a paper invoice to a client. I usually just send one via email. Indeed, it can save money and the planet if your go paperless with your home business. But it may not always be the best thing. Mary Emma Allen at Home Biz Notes offers some very real concerns with regard to going completely paperless in your home business:

* What happens if your computer crashes? You might be able to recover the data, but while your computer is out of commission, you don’t have access to your records.

* The same is true of information stored online. You might get to it eventually, but you don’t have immediate access.

* What if your back-up method becomes obsolete?

* What if your business is hacked?

These are very real concerns. Since I have Gmail, all of my sent invoices are automatically backed up. (Of course, this doesn’t solve the immediate access problem. Or the fact that I am relying on Google for waaaaaay too much.) For me, the immediate access factor is not much of a problem. After all, the work I do allows for me to have the time to check up on payments at my leisure. My biggest issue is the fact that my bank account information is on Quicken, on the computer, and I rarely back it up. If the computer crashes, and I can’t recover the data, I’d have to use my online bank statements to make things right through manual input.

Do you see problems with going completely paperless for your home business?

Starting a home business can be a daunting task. However, there are some things you can do to make the process more organized and increase your chances of success. Susan Ward, at About.com, offers this info on what you can do to get started with a home business:

1. Assess your talents: Figure out what you are good at, and consider that for the basis of your home based business.

2. Examine your skils: Realistically catalogue your skills and decide what you can bring to the table (and what you may need to outsource to someone else).

3. Put your talents and skills together: With your talents and skills in mind, think of some business ideas that will help you make use of your resources.

4. Test your home business ideas: Think about the feasibility of your home business ideas as something you can do at home. Eliminate the ideas that clearly won’t work.

5. Find the profit angle: Do research about how much you can expect to earn from your home business, and whether it will bring in sufficient income.

6. Create a business plan for your home business: Put together a plan taht can make your home business idea happen.

With proper planning and organization, starting a home business is possible. And when you base it on something that makes use of your talkents and skills — and has the potential for profit — you are more likely to succeed.

If you have a home business, you probably know that it takes up a lot of time. Cutting back on the time you spend, or at least finding balance, is a good thing. There are two instances that I have seen recently that have impressed upon me the importance of balance with your home business.

Part-time work from home

Mrs. Micah is well-known for her freelance side business. She does consulting and writing part-time, in addition to a full-time job. She wrote a post today about the stresses she has been encountering with regard to working from home on top of doing her full-time job. In the end, it became apparent that it was time to cut back on her freelancing and consulting.

Full-time work from home

I’m actually being forced to cut back. Recently, a major client announced that it would be cutting my work by more than half. I’ve thought about frantically trying to replace that income with a lot of side projects, but my husband pointed out that this might be a blessing in disguise. Lately I’ve been worried about money (and feeling a little trapped) because I am the primary breadwinner with my work from home freelancing. What happens if someone else ditches? But other opportunities are coming, and it appears that I’ll be able to make as much money doing less. This major client was still paying rates charged nearly 4 years ago when I was relatively new to freelancing.

In the end, sometimes it’s time to move on and cut back a little bit. It is usually possible to adjust to the income (if you are prepared), and it can save your sanity, allowing you more time to spend with your family — and even with just yourself.

Many people use online sites such as eBay, Amazon and Craigslist to sell their home business products and services. Check out this amusing video from Weird Al Yankovic: “Craigslist”.

Happy Friday!

One of the interesting points I ran across recently was from The Telecommuter Manifesto. A post on the productivity paradox (the more productive you are, the more work you get, meaning you work harder, but for the same amount of money) really got me thinking about an aspect of working from home that we sometimes overlook: Are you working at a task-based job, or a time-based job?

Task-based work from home

If you are doing a task-based job, you are paid by the tasks you complete. As a freelance writer, I am very familiar with this type of compensation. I am paid per word, per post or per project. If someone asked me my hourly rate, I would have to estimate by how long it takes me to complete the task I am given. The upside to this mode of pay is that I end up with a high hourly rate — and more free time — if I can complete a project quickly. The downside is that if a project takes longer than I thought, it can be a very inefficient use of my time, reducing my overall hourly rate.

Time-based work from home

As you might guess, time-based work is paid hourly. You get the same rate, for however many hours you work. For telecommuters working for someone else, this means that you are expected to be “logged in” and at your workstation between specific hours. For those with a home business (especially freelancing or consulting), it means you charge an hourly rate, and you get paid for how long your services are used. The upside is that you always get paid your rate. The downside is that if you take too long, you run the risk of having your charges disputed. For telecommuters, there is a good chance that you end up a victim of the productivity paradox.

The Telecommuter Manifesto explains the difference in productivity paradox between task-based and time-based telecommuting:

Telecommuters whose jobs are task-based, rather than time-based, are most able to avoid the productivity paradox.  For them, the added productivity of telecommuting will allow tasks to be completed more efficiently and quickly, freeing up even more time for persuits that directly correlate their efforts with their earnings.  Time-based telecommuters are even harder hit by the productivity paradox than office workers.  Without proper monitoring of how productivity gains are exploited, such workers may quickly burn out or take actions that jeopordize the continued management support necessary to remain a telecommuter.

I think I like being task-based. It seems to give me a little more freedom overall. What about you? Do you charge by project, or by the hour? Has it affected your productivity?

Despite my best efforts at preparation, summer is wreaking havoc on my home business schedule. I’ve had to change my regular work hours around to accomodate two facts:

1. My son is not in school as long (he is going to an educational day camp for four hours, three days a week).

2. My husband’s student assistantship doesn’t take up as much time, so he wants to do more.

The day camp idea is rendered partially useless, because #2 means that my husband is excited that we can use the time that my son is being watched by someone else to spend quality time together, just the two of us. While admirable and fun, it cuts into my work time. So I’ve been doing more in the evening, which I hate. I’m much more productive during the day.

But that is life for someone working from home. Flexibility is a must, and summer time often throws the entire schedule out the window. But I am working out a sort-of schedule that is providing me some stability and productivity.

Is summer messing with your home business work schedule?