5 Different Ways to Work From Home

Overview of Telecommuting, Contract Work, Freelancing and Home Business

Mid adult woman sitting on floor, leaning on sofa, talking on, using laptop, side view
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People decide to work from home for many of reasons, including wanting to stay home with children, needing to care for an ailing family member, or simply wanting more time and freedom from the commute and work grind. Whatever the reason, deciding to work from home is the easy part. The challenge is determining what to do from home. 

What many people don't know is that there are many ways to make a living from home, including work-at-home jobs, contract work, and home business. While all offer the ability to avoid a commute, they are different, and depending on your reasons for working at home, may or may not be suitable to your goals. Further, while working at home has many perks, it's not always a picnic and not everyone has what it takes to succeed.

Here is a list of 5 ways to work from home, plus the advantages and disadvantages of each.

Work-At-Home Job (Telecommuting)

Many people who decide to work from home initially look for a home-based job instead of a home business. There are several reasons for this including the desire for employee benefits, concerns about irregular income, or fear of self-employment tax.

The biggest challenge to work-at-home jobs is that most people don't understand them or seek them in the right way. Too many people search Google and end up getting scammed. These people erroneous believe they can simply sign up and start typing or doing some other menial work from home. One of the most important things to understand about work-at-home jobs is that they are like traditional jobs and to get them you need to have skills and experience outlined in a great resume. 

The good news that many employers are open to telecommuting if you give them a quality work-at-home proposal. Further, many other companies are hiring home based workers, so if your boss doesn't let you work at home, you might be able to find and get hired by someone else. 

The types of jobs open to working at home is growing too, and includes work such as customer service, teaching, virtual support, nursing, writing, bookkeeping, and more. 

There are several aspects of telecommuting that make it an attractive option. Work-at-home jobs often offer:

  • Steady income
  • Tax dealt with by employer
  • Health and other benefits in many cases
  • Eliminate commute
  • Increased productivity
  • Reduced impact on the environment
  • Reduces wear and tear on vehicle
  • More time for self due to eliminating a commute
  • Doesn't cost anything unless you pay to access a telecommuting job database or hire someone to help write your resume. (Never pay to get hired!)

However ideal home employment sounds, there are some drawbacks as well, including:

  • My not have flexibility - many work-at-home jobs still require set work hours
  • Reduced or no benefits - not all employers pay benefits 
  • Less pay - many work-at-home jobs pay less than traditional jobs, although the cost savings of working from home may off-set this
  • Your boss may think you have less commitment to the job than those who work onsite
  • May still need child care or to make arrangements when caring for others.
  • You may be required to purchase special equipment such as a headset, landline phone services, or needed software for the job (note: any employer that tries to sell you these items should be suspect. While employers will require you to have certain items, they shouldn't have any say in where or how you get them).

    Self-Employment Work-At-Home Options

    All non-job related work is considered self employment. But within self-employment there are many options, some of which offer the stability of a job. Here are the various ways to make money at home in a self-employed situation.

    Contract Work

    Contract and freelance work are often used interchangeably but there are a few subtle differences. Many of the home-based "jobs" you'll find on career sites hire workers as contractors instead of employees. These contract jobs can be full or part-time, and as regular as a traditional job, including steady income. The difference is that contractors are considered independent from the company for tax purposes and therefore, need to manage their own self-employment taxes.

    Advantages of Contract Work

    • Can be regular with steady income
    • Greater flexibility in when, where, and how you work
    • Increased independence in the work. As long as it gets done to the employers specifications, the employer has less control over how the work is done.
    • Free to start as long as you have the tools and equipment.

    Disadvantages of Contract Work

    • Companies can let you go more easily than an employee
    • Work may be part-time or less requiring you have several contract jobs to meet your financial needs
    • You need to pay estimated taxes and self-employment taxes.
    • Maybe be required to sign a non-compete agreement meaning you can’t provide the same or similar service to businesses in the same industry. 

    Freelance Work

    In some ways, freelancing is like contract work, in that you're usually hired by a company to provide a service. On the other hand, it can also be like a home-based service business. In most cases, as a freelancer, you have even more control of your work, such as what you offer and how you do it, than in contract work, although clients will have input in what they want. You can also set your price. 

    In most cases, freelancers work under their given name, usually as a sole proprietor. However, they can turn their freelance work into a business, offering the same services, but under a business name and different business structure (i.e. limited liability company). 

    Like contract work, you can find freelance work on freelance job sites such as Upwork. Or similar to a home business, you can market your services using various marketing tactics such as networking. Common types of freelance work include:

    • Writer
    • Marketing Services
    • Accounting
    • Web Design
    • Graphic Design

    Advantages of Freelance Work

    • Greater flexibility in your time and work.
    • Greater control over your time and work.
    • Set your own fees
    • In today's outsourcing environment, work is plentiful.
    • Free to start as long as you have the tools and equipment.

    Disadvantages to Freelance Work

    • Work may be irregular, requiring active seeking of work or marketing your services
    • Competition is fierce in some jobs
    • You need to pay estimated taxes and self-employment taxes.

    Home Business From Scratch
    If you really want to cut the employer cord, or don’t have an area of expertise or desire be a contract worker or freelancer, you can start a business. Many people are scared off by the complexity of starting a business, but while there's a lot of steps, they're actually fairly easy to implement. In fact, you can have a business up and running within a month.

    There are many great home business ideas. So many in fact, that you'll want to take some time to figure out what option is best for you. Some ideas include turning a hobby into a home business. Are you creative? There are several way to turn your creative talents into home business. Do like travel or pets? There are many ways to start a home business in those ears as well.

    Businesses are usually divided into product-based and service-based. In product-based business, you sell a tangible good, such as gift baskets, craft goods, or an invention you made. However, the Internet also provides for the sales of digital goods, as well.

    A service-based business involves providing a service, such as home cleaning or childcare.

    Both can be further broken down into business-to-business (B2B) products or services, which provide help to other businesses such as office supplies (products) or bookkeeping (service), and business-to-consumer (B2C), in which you provide help to individuals such as kitchen tools (products) or handyman home repair (services).

    Advantages to Starting a Home Business

    • Control and flexibility over your time and work
    • Ability to turn a hobby or passion into income
    • In the case of service-based business, they can be fast, easy and affordable to start. 
    • Set your own prices

    Disadvantage of Starting a Home Business

    • Can take time to generate income
    • Income may be irregular
    • Often costs money to start, although it doesn't have to be a lot of money. There are many low-cost ways to start a business.
    • May work longer hours, especially during the start-up phase.

    Buying a Home Business

    There are four ways to buy a business. 

    1. Buy an existing home business from a home business owner. 
    2. Buy a franchise home business.
    3. Buy a business opportunity.
    4. Buy a direct sales business, which can include multi-level marketing

     The advantages of buying a business include:

    • There's already a product or service
    • There's a ready-made market
    • Marketing plans and materials are created

    Disadvantages of buying a business can include:

    • In the case of existing business, franchises and business opportunities, it can be expensive.
    • In the case of franchises, business opportunities and direct sales, there may be limitations on how and where you can market and build your business.
    • In direct sales, there are many in the same company you're competing against.
    • In direct sales it may be difficult to differentiate yourself from your competition.

    In terms of buying a business, one of the best values and potential profidability is direct sales. Unfortunately, there are many myths and misconceptions that prevent some people from considering a home business in direct sales. While there are MLM scams you need to watch out for, they can be avoided with research. To be a direct sales success, it's important to pick a good company with products you life, as well as to make sure you have a complete understanding of what's involved, and avoid making common mistakes, such as not reading the contract or not loving the products.