Pros and Cons of Doing Work from Home

Working from home is becoming increasingly popular both for employers and employees. Although there are many good reasons to work from home, it is a decision that requires quite a consideration because there are also reasons why working from home may not be optimal. Besides, what works for one person may be a nightmare for another. This is why it is important to evaluate all alternatives before committing our self to work from home.

Why choosing to work from home - the Pros

Independence

Working from home gives the privilege of being your own boss. We can manage our tasks as our like and we report to our self unless we work as a virtual administrative assistant. Having our own business will provide you the energy to work hard and make our dreams come true.

Flexibility

Working from home allows us to fit our work around the family routine. We can be flexible with our working hours without neglecting to be a parent or a spouse. Especially, if we are the type of person that loves being around family, then working from home is our dream job. We can have more free time to spend with our family.

 Save on commuting

Working from home allows us to save on commuting as we do not have to drive miles and miles to go to work every day. Our office is literally next door, in our living room and all we have to do is get our coffee and start working.

Quality of life

All the above advantages inevitably lead to quality of life. We have time for ours elf, our family and our friends; we have time to organize our work and meet the deadlines; we are flexible and independent to work as we like and as much we like without compromising the level of services we provide to our customers.

Why not choosing to work from home - The Cons

Lack of focus
Working from home can have many distractions. Kids playing, phone ringing, neighbors visiting and so on, often make it hard to stay focused on our work. Especially, if we don't have a separate room set up as our office and we have to share our work space with other family members in the sitting area, it is particularly hard to mitigate the distraction factor.

Mixing Personal and Professional Life

Depending on the nature of work, personal and professional life can be mixed up. Since working from home means spending most of the time at home, it is not unusual to work at odd hours or to delay their tasks in order to spend more time with their family. Most of the times, there is a really thin line between personal and professional life and this may cause family problems.

Same scenery

Working from home deprives we from a change of scenery. Besides, being non-stop at home can be extremely boring and non-productive. Typically, people who work outside from home are more stimulated and do not have this strong need for a change of scenery. On the contrary, people who work at home often need interaction with other people to feel motivated.

Overall, working from home offers the liberty of working at our suitable time, but, on the other hand, it may involve certain risks. Before entering into the wonderful world of the Internet that opens up extremely profitable opportunities, you need to evaluate the pros and the cons of working from home in order to make a well-informed decision.

Terms of the Week-Business Dictionary (Part II)

Cost control
The process or activity on controlling costs associated with an activity, process, or company. Cost control typically includes

(1) Investigative procedures to detect variance of actual costs from budgeted costs

(2) Diagnostic procedures to ascertain the cause(s) of variance

&
(3) Corrective procedures to effect realignment between actual and budgeted costs.

Marginal cost

The increase or decrease in the total cost of a production run for making one additional unit of an item. It is computed in situations where the breakeven point has been reached: the fixed costs have already been absorbed by the already produced items and only the direct (variable) costs have to be accounted for. Marginal costs are variable costs consisting of labor and material costs, plus an estimated portion of fixed costs (such as administration overheads and selling expenses). In companies where average costs are fairly constant, marginal cost is usually equal to average cost. However, in industries that require heavy capital investment (automobile plants, airlines, mines) and have high average costs, it is comparatively very low. The concept of marginal cost is critically important in resource allocation because, for optimum results, management must concentrate its resources where the excess of marginal revenue over the marginal cost is maximum. Also called choice cost, differential cost or incremental cost.

Net price

A final price after deducting all discounts and rebates.

Vision statement

An aspirational description of what an organization would like to achieve or accomplish in the mid-term or long-term future. It is intended to serves as a clear guide for choosing current and future courses of action.

Opportunity cost

A benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost. Opportunity costs are fundamental costs in economics, and are used in computing cost benefit analysis of a project. Such costs, however, are not recorded in the account books but are recognized in decision making by computing the cash outlays and their resulting profit or loss.

Austerity budget

A budget that is imposed on a country by its government with the purpose of reducing the national deficit by way of cutting down on consumer spending.

Earmark

The act of setting something aside for a specific use or purpose in the future. For example, goods may be earmarked prior to being exported in the future. Most commonly used to refer to funds that have been set aside in order to pay for a specific project.

Masters of Business Administration (MBA)

An advanced college degree, earned by those who successfully graduate from their college or university's MBA program. As with other advanced degrees, traditionally a student will have already received a Bachelors degree in some area of study, before working towards his or her MBA. A typical MBA program deals with multiple aspects of business, including finance and management skills. Also called Masters in Business Administration or Master of Business Administration.

Yankee bond

Dollar denominated bond sold in the US by a foreign bank, corporation, or government utility. It the US equivalent of Eurobond.

Tax holiday

A temporary period, during which time the government removes certain taxes (usually sales tax) on certain items, in order to encourage the consumption or purchase of these items. The most common application of this is a tax-free weekend, which most states hold shortly before school begins in the fall, during which time sales tax is removed on clothing, school supplies, and/or other similar items. Not all areas engage in tax holidays; it is up to the government of that area.

How to Read a Financial Statement

A company’s financial statement is used to show a company’s performance over a certain period of time, generally every fiscal quarter. The financial statement really consists of three different statements: balance sheets, cash flow statements and income statements.

 By being able to read a financial statement, you can determine where a company has made or lost money, where the money went and how the company stands financially. The financial statement gives shareholders an accounting of how their investment is performing.

Components of a Financial Statement

Balance Sheets

Represent the assets, liabilities and the net worth or shareholder equity of the company. Assets make up all the property the company owns, including bank accounts, real estate, machinery etc. An asset can also be intangible such as a trademark or patent.

Liabilities consist of the money the company owes others. This can include leases on real estate, loans, accounts payable to suppliers of material, tax liabilities or obligations to deliver product. Liabilities also include employee payrolls and money borrowed from banks.

Shareholder equity represents the company’s net worth if it were liquidated and what each shareholder would receive after paying the creditors of the company.

Cash Flow Statements

Reports on the inflow and outflow of the company’s money. The cash flow statement is divided into financing activities, operating activities and investment activities. In combination, these three parts show the change in capital position the company had over a period of time.

Income Statements

Show how much revenue the company took in over a specified time period and how much money was spent to get that revenue. The income statement shows the company’s net earnings or losses on the bottom line and begins with all the cash the company took in at the top, and goes through all the expenses it took to make that money with the net figure on the bottom.

Knowing how to read a financial statement gives an investor or analyst a clear picture of the financial position of a business. Nevertheless, past performance does not generally guarantee future results; keep this in mind before investing in any company.