Thinking about a Home Business? Here are some ideas to help figure that out.
Can a home business really make it big?
Absolutely! Consider this little list of people who started at home: Apple Computers, Ben & Jerry’s Ice Cream, Domino’s Pizza, Ford Motor Company, Estee Lauder, Lillian Vernon, Reader’s Digest, Nike, Walt Disney, Hallmark, IBM? Bill Gates…Mr Microsoft?
I’ve never run a small business and have no formal training. Am I crazy to try?
Everybody has to start somewhere. There are no written scripts on what it takes to start a winning venture. Remember the lessons we have provided, start exploring, choose something you will like working at, and know that if you work at it, you will succeed.
What is the difference between the service, retail and manufacturing sectors?
These three headings are used to categorize business in the United States. All businesses fall into one of these three. Service is selling time and convenience to busy Americans and can range from a car wash to a catering enterprise. A retail business involves a store or selling of merchandise. Manufacturing is our auto industry, or the making of widgets for a giant corporation’s assembly line.
Can my kids work in my business?
Sure they can. You can pay up to $3000 tax free. If your business doesn’t incorporate, the wages you pay are exempt from Social Security and unemployment taxes (until they reach 18 years of age).
What is the “break even point” and how do I calculate it?
The break even point is reached when your expenses balances match up with earnings. Your business is not yet profitable, but it is getting there.
I have a great idea for a new business but I’m afraid to talk about it because my idea might get stolen. Who can I turn to at this juncture?
Call your local Small Business Administration (SBA) under the federal office listings and ask to be put in touch with a SCORE office (Senior Corps of Retired Executives) nearest you. There are 750 offices that use such experts in a wide range of fields who are there to consult with newcomers on how to set up and run a business. Ben and Jerry, the ice cream boys, did that.
Go on-line http://www.sba.gov/content/service-or-product-line or contact SCORE 800-ASK-SBA.
How do I investigate the legitimacy of a company offering a business opportunity?
Beware of companies that request money right away, even before they adequately explain what the opportunity may be. Make sure the company has a telephone number you can call and an address you can use and confirm. Call the Better Business Bureau in the city where the company is based and request a “reliability report.” Check on any complaints. Check with the consumer affairs (state and federal offices, like the Federal Trade Commission), state departments of commerce, etc. Ask for references from “satisfied customers.”
Is financing available for small business?
If you can present your ideas well (and have a suitable credit rating or good collateral), a bank, a credit union, the Small Business Administration, might grant you a loan. Grants are possible too. Another method is to find a venture capital enterprise. Venture capital is a privately owned investment group that looks for dynamic business ideas in which to invest. In exchange, they will take a high percentage of ownership and profits, plus will have a lot of say in setting up, running and managing the business.
I make a product out of my home. Where can I sell it if I can’t afford national TV advertising or national magazine ads?
Easy: The Internet. You may be able to sell your stuff locally through newspaper ads or on-line resources (like Craig’s List), however, eBay is the world’s online marketplace; a place for buyers and sellers to come together and trade almost anything. Other online markets are available to eBay is the premier.
Here’s how eBay works:
- A seller lists an item on eBay, most anything from antiques to cars, books to sporting goods. The seller chooses to accept only bids for the item (an auction-type listing) or to offer the Buy It Now option, which allows buyers to purchase the item right away at a fixed price.
- In an online auction, the bidding opens at a price the seller specifies and remains on eBay for a certain number of days. Buyers then place bids on the item. When the listing ends, the buyer with the highest bid wins.
- In a Buy It Now listing, the first buyer willing to pay the seller’s price gets the item.
Are there hot trends in small business start-ups?
Check any home business publication and you will get lots of ideas. Service businesses definitely are booming, including health care. Nutritional and weight products are good. Food delivery is very big, mobile car wash and detailing, recycling and other business that has a demonstrable way to improve the environment, residential/commercial cleaning all seem to be doing very well, segments of the real estate market (check our web site for tips there), brokering loans, consulting on readying properties to sell, etc. Most companies are interested in acquiring good customer support as well as sales people. Mail order is thriving (see E-Bay). The products you can develop or purchase to sell on-line are simply amazing.
What do I do about agreements?
Put it in writing. When it comes to money, a written agreement will spell out the responsibilities, deadlines, prices, performance, disclaimers, who is to do what, and anything else that relates to the matter at hand.
How do I figure out what to charge for what I do?
Obviously, in order to succeed, you must be competitive. If your product or service qualifies as “high-end,” you may be faced with market targeting issues, e.g., specific income bracket individuals narrowing the scope of your market (this is not necessarily a bad thing). A good rule for product pricing is to find out from family, friends, associates, and professionals in the market for what you do, to discover what they would pay for such a product or service, and then compare those numbers against the numbers that the market will bear (such as what the price is at a retail outlet, or what the doctor pays as a percentage for collections, or transcription rate currently paid).
How can I sell my products to catalog sales outfits?
Contact the catalog houses you are interested in selling to and send them a one page fact sheet along with a photo or a sample of what you have to offer. Follow-up with a phone call until you get someone’s attention.
And finally, some final tips.
- Your business address It may be advisable to rent a postal box to conduct your business if you don’t want customers or clients to know or perhaps visit your home address, but keep in mind that using such a box may have inherent image problems if it is the only address. On the other hand, if your home has an office that is suitable for meetings and such and you use the address, then a PO Box is an enhancement to image if both addresses are listed on printed or electronic documentation.
- Meeting Rooms: Keep in mind that some banks will provide conference rooms to meet potential clients. Also check with hotels for best rates.
- Resume. Prepare and maintain an updated resume (see sample in Appendix E). Review the specifics in Career Development at http://homeworkers-training.com.
- Contracts. If you are delivering a service, it is always best to get a written contract rather than relying on a verbal agreement. This will protect you and your client from future misunderstandings. Don’t forget to stipulate the terms of payment. If payments lag, politely but firmly communicate the elements of the agreement.
- Professionalism one more time: First, last, always. Don’t whine or complain about slow payments, how broke you are, or relate in any way any particular economic problems. Deal with your customers in a professional way, noting the contractual obligations, your clear expectations and pinpoint existing problems with suggested solutions. If you are criticized in any way or must redo or replace, be professional. Though sometimes difficult, the maxim is and remains:
The customer is always right…
- Do unto others – Marketing encompasses word-of-mouth advertising directly impacting on your professionalism and reputation. The public’s or your targeted clientele’s perception of you is limited to how you have treated and served them in the past. Treat your clients or customers the same way you would want to be treated if you were in their shoes. If you assign this as your private creed and follow-through with all your effort, you will succeed. Period.