Tips and Strategies For Home
Home Business Start-Up
Doubt the Viability: Take A Home Business
seriously considering working from home, you're not
alone. Some 50 million Americans are currently doing so,
compared with six million in 1984, according to the
National Association of Home-Based Businesses. In five
years, it is estimated that as many as one of every two
workers will be engaged in a full- or part-time business
or doing salaried work at home. For single parents and
many women, this alternative facilitates juggling family
and career. For fathers, it can lead to spending more
time with their children. Working from home can provide
the means for stretching a tight budget or finding a new
career for those displaced by corporate downsizing. For
the retired or the increasing number of people
considering early retirement, it becomes a way of
contributing, of staying alive and vibrant by not
allowing their professional skills to atrophy. And for
many with handicaps, it's the door to self-sufficiency
and a productive future.
Speculate: Choose Something You Enjoy and That People
Will Pay For
appropriate home-based business for yourself requires
tuning in to the most popular radio station in the
world: WPWPF ("What People Will Pay For"). And simple
market research will help you do just that. Begin by
asking prospective customers what they need. Go to trade
shows and get feedback on your potential product or
service. Find out who is in that business now and what
advantages you might be able to offer over your
If you are having trouble finding
the ideal business, here are four possibilities:
Turn what you most enjoy into a home-based venture, such
as a favorite hobby or interest.
* Utilize existing
skills from your salaried job.
* Solve a problem that
people are willing to pay someone else to do for
* Use technology and resources you already have
around the house, from your van to your
Be One of Hundreds: Define Your
It is much easier
to market yourself as a specialist serving a particular
niche. This helps you stand out from the competition,
and also allows you to charge a decent fee because you
are more than a general "worker" people can hire as an
employee or from a temp agency.
There are four
primary ways to define your niche:
* WHO you
serve -- e.g., a computer consultant who works only with
women; a public relations firm that specializes in
assisting environmentally-conscious companies; a caterer
who handles parties and weddings for the Hungarian
* WHAT you provide -- e.g., a computer
consultant who works only with Macs; a public relations
firm that specializes in doing publicity book tours for
authors; a caterer who prepares health food that looks
and tastes decadent.
* WHERE you work -- e.g., a
computer consultant who focuses on the east side of
town; a public relations firm that specializes in
getting media coverage in foreign countries; a caterer
who has attained renown for servicing a variety of
* WHEN you are called upon -- e.g., a
computer consultant who is available for weekend and
after-hours calls; a public relations firm that
specializes in crisis communications for companies
involved in scandals or tragedies; a caterer who can be
counted on to handle even last-minute dinner parties
4. Don't Sell
Yourself Short: Charge What You Are
The truth is that
no one automatically knows what to charge; people
generally have to discover what is both appropriate and
competitive. Begin by doing some basic research to
determine the following:
How much is your product
or service worth in concrete terms? Value, like beauty,
is in the mind of the beholder to a certain extent.
There are several ways to ascertain the value of what
you offer to prospective customers. Can someone
currently obtain this product or service elsewhere? If
so, how much are they paying for it?
people actually pay? Perception can be as important as
the actual value of the product or service being
offered. If potential customers perceive your price as
being too high, you'll end up without a sale. By
comparison, if buyers perceive something as being too
cheap, they'll worry that it may be inferior in
Above all, be careful not to sell
yourself short. Consider following this commonly-used
Direct Costs + Overhead + Profit
= Your Price
* Direct costs refer to costs you
incur in doing your job: gas, telephone calls, postage,
printing and your time. Calculate your salary --
including fringe benefits -- into your rates. Remember
to add enough to cover the hours of unbillable time you
spend marketing and administering.
* Overhead refers
to the general costs of doing business: equipment,
software, utilities, office supplies, advertising and
marketing expenses, and administrative costs. Most home
businesses multiply their hourly wage by two or three to
* Profit is an amount calculated over
and above direct and indirect expenses; many experts
advise adding 15 to 20 percent or more.
Business Operational and Marketing
Don't Create Problems: Find the Right Place for Your
Ideally, the space
you select for your office will match your personal work
style and budget, qualify you for tax benefits to which
you're entitled, and fit in with your household
environment. To work effectively at home, most people
need these basic work areas:
* Space for a desk
and chair, where you can work with a computer, phone and
other frequently-used equipment.
* Conversation space
with chairs or a couch where you can collect your
thoughts or hold meetings.
* Storage space for filing
cabinets, books and reference materials.
space for supplies and infrequently-used equipment.
Large work space for activities such as assembling
materials and doing mailings or shipping.
don't have a separate room that can be designated for
your office, choose a location where you will be
disturbed the least. For example, partition off a
section of your living, family or dining room.
Alternatively, convert or remodel a space such as your
garage, attic, basement or porch.
6. Don't Lose
Control: Organize Your Work Space for
Keep those things
you most frequently use near your desk, based on this
simple formula. On a scale of one to seven, rate the
item you're storing or filing in terms of how frequently
you use it. Give items you use every day a one; those
you use once a year, a seven. Place items in the
following locations according to how you rate
* 1: Place all these items within arm's
reach of your desk area.
* 2-3: Keep these items
within your immediate range in files or cabinets, on
countertops or on shelves.
* 4-5: Store these items
in nearby cabinets or closets, or on shelves outside
your office space.
* 6-7: Store these items in remote
locations such as the attic, basement or
Don't Be Reclusive: Make Your Business Official and
businesses fall by the wayside because they do not make
their operations official and visible. Consider the
following actions to avoid that pitfall:
Clarify any zoning restrictions on your running a
business from home. Make sure you can operate a business
from your residence and, if there are problems in doing
so, get a separate mailing address or apply for a use
permit or variance to your zoning laws.
* Open a
business bank account. Keep your personal and business
affairs distinct from one another.
* Get a separate
phone line installed in your home for business calls. A
separate line helps you manage your personal and
business lives more easily, and gives you a more
* Maintain regular business
hours. Nothing annoys customers more than not knowing
when and if you are open for business.
* Select a
memorable name that fits your business image. A dull,
confusing or inappropriate name for your business can
result in clients overlooking you or not specifically
understanding and appreciating what you have to offer
8. Don't Go
Halfway: Create a Thoroughly Professional
business image leaves the impression that your
home-based venture is not a truly professional one. So
in setting up your enterprise, pay attention to key
image components other than your business name that do
not necessitate a big budget, but rather attention to
detail. Here are some suggestions:
quality with a custom-designed logo; avoid choosing one
from a standard catalog.
* Apply this logo in a
consistent way to give your company a professional and
identifiable image on business cards, stationery,
invoices, faxes and any other visual communications
* Choose paper that looks and feels top
quality for letterhead and business cards.
professional locations for meetings with clients. If
clients come to your home, avoid having them walk
through personal or family areas, or schedule meetings
at outside sites such as restaurants or hotel
Don't Be Passive: Utilize Word-of-Mouth
marketing refers to two highly effective practices:
networking and referrals.
Networking, the most
popular way to start and build a home-based business,
refers to using face-to-face contact to establish
relationships that can generate leads. It's based on
talking with people about what you do and listening
carefully to find out how you might serve them. Consider
joining a networking organization, often called a "leads
club," which is set up specifically to generate business
leads for members.
Once a business is
established, word-of-mouth marketing means getting
referrals from satisfied customers. Let your customers
know you genuinely appreciate their referrals; by so
doing, you multiply the number of mouths talking
positively about what you have done or
Don't Jeopardize Business Opportunities: Make Sure
People Can Reach You
that people working from home spend more time talking on
the telephone than on any other single activity. As a
result, you need to be sure clients can always reach you
so as not to jeopardize any business opportunities.
Fortunately, a variety of sophisticated telephone
equipment and services is available to ensure ongoing
communication, as the following useful options
* Use voice mail to take messages
when you're out of the office or unable to answer the
telephone. Voice mail can be obtained from your phone
company and other providers, or you can purchase an
answering machine or add a voice mail system to your
computer. Professional answering services and forwarding
calls to the home of someone you hire are more expensive
* Use call forwarding to receive calls
when you're out of the office. Other alternatives
include purchasing a cellular phone, a 700 number or a
* To handle incoming calls while you're on the
telephone, get call waiting or voice mail that picks
them up so people never get a busy signal.
prevent unnecessary interruptions, subscribe to your
local phone company's VIP alert so only desired calls
come through during the time periods you designate.
if you are running short of phone lines, get distinctive
ringing that gives you two phone numbers on one line, or
double up on one line by purchasing a combination
fax/phone/answering machine that automatically
recognizes when a fax is coming through.
Business Business Technicalities
Don't Get Caught under the Table: Make Your Business
Operating a home
business on a full- or part-time basis may require
taking certain legal steps to protect yourself and your
venture, including the following:
* Get an
employer's ID number if you have employees or are
incorporated or in a partnership.
* Obtain a federal
license if your job is covered by federal laws, such as
those who are investment advisors or firearms dealers;
similarly, make sure you have any required state and
local business licenses.
* Obtain the trademarks,
copyrights or patents needed to protect any products or
services you have created.
* Incorporate or form a
limited-liability company or a partnership if you are
not a sole proprietor and are working with other
* Find out if you are required to collect
sales tax for your product or service. If so, register
with the state agency responsible for collecting sales
* Register your business name if you are using
a name other than your own or a variation
Consult a lawyer or the appropriate
government agencies in your city and state if you're not
sure how these requirements may apply to your business
Don't Be Intimidated by the IRS: Claim Your
Whether you live
and work in a house, apartment or condominium, you can
deduct the cost of operating and maintaining that part
of your residence used for business if you meet the
basic criteria established by the IRS for a home
According to the IRS, the portion of your
home you wish to claim as a tax write-off must be used
exclusively and regularly for business.
addition, the portion of your home you use must be
either your principal place of business or a location
where you meet with customers or clients in the normal
course of business activities.
If you qualify for
a home-office deduction, you can deduct a variety of
expenses such as your mortgage payments and capital
improvements, pro rated for the portion of your
residence used as an office.
As a self-employed
individual, you can also deduct numerous ordinary
business expenses, from the cost of operating your car
to dues you pay to professional and trade associations.
However, be sure the IRS considers you a self-employed
individual or independent contractor rather than an
employee. The rules on this issue and on expense
deductions can be tricky, so it's wise to consult your
accountant for clarification.
Don't Take Risks: Get Needed
firms don't realize that their homeowner's or apartment
dweller's insurance may not protect them against three
basic business contingencies:
insurance usually doesn't cover business property.
Consider purchasing business property insurance to cover
your computer and other office equipment and
* Home/apartment insurance usually
doesn't cover liability for accidents or injuries to
customers or business visitors. Consider purchasing a
rider to your policy to cover anyone who comes to your
home on business.
* Standard auto insurance usually
doesn't cover damaged or stolen business property. If
you use your car for business, be sure to indicate that
on your policy and pay the additional amount
Finally, depending on the nature of
your business and the level of risk you want to assume,
you may also wish to purchase any of the
* Malpractice or errors or omissions
(E&O) insurance to cover you against claims that
your product or service harmed someone or caused a
* Disability insurance to cover you
against loss of income should you become disabled.
Partnership insurance to cover you against suits arising
from the actions of any partners you have.
Business Financial Issues
Don't Risk Financial Ruin: Have an Entry
Depending on the
nature of your business, it can take from six months to
a year to get underway, one to three years to turn a
profit, and three to five years to become
self-sustaining. This means you must have enough money
to cover your costs of living and doing business during
this start-up period. Consider these five entry plans as
* The Moonlighting Plan. Keep your
full-time job and develop your business as a sideline
until it takes off and you can rely on it entirely for
* The Part-time Plan. Work a
part-time job to provide a base income while you're
building up the operation.
* The Spin-off Plan. Turn
your previous employer into your first major customer
or, if ethically possible, take a major client from your
previous job to help launch your fledgling venture.
The Piggyback Plan. If you have a working spouse or
partner, reduce expenses so you can live on one salary
until your business gets underway.
Have-Your-Clients-Finance-You Plan. If you have
sufficient stature or expertise in your field, obtain
retainer contracts with a few clients for one year so
you will have an assured source of
Don't Let Lack of Money Stop You: Arrange for Start-up
home businesses do not involve extensive start-up costs.
As a result, most people can "bootstrap" their fledgling
operation using money from the following
* Credit cards. You can put many
business expenses on a credit card. However, try to
limit charges to items that will pay for themselves by
generating income relatively quickly.
loans. If you or a spouse has an existing job and a good
credit record, banks will usually give you a personal
loan more readily than a business loan.
* Home equity
loans. If you own your home, refinancing it is one way
to obtain a reservoir of start-up capital.
Character-based microloans. The U.S. Small Business
Administration and a variety of private foundations
offer microloan programs for very small businesses to
handle loans ranging from less than $1000 to $25,000.
These loans are not based on a person's assets but
rather on good character and proven management
Don't Leave Payment to Chance: Get Written
When you work from
home, contracts are your most important safeguard
against problems with customers and clients, and help
ensure that you are taken seriously as a business.
Whatever your endeavor, create a standard contract to
use, spelling out specifics such as what you will
provide, when you will provide it, what it will cost,
and when customers or clients are obliged to pay
While contracts can be verbal or written,
written ones are certainly preferable. The best way to
develop contract agreements that are customized to your
specific needs is to consult an attorney. You can also
talk with colleagues about the contracts they use, ask
your professional or trade association for information,
or attend a workshop on contracting. Many pro forma
contracts are also available on computer
Don't Get Caught Short of Funds: Keep Cash
If you are
self-employed, having a system for managing your cash
flow is essential to the survival of your business. To
use an analogy, cash flow is to your livelihood what
breath is to life. The following seven steps will help
ensure that the money you're owed comes in as quickly as
* Get deposits, retainers or partial
progress payments as often as you can.
* Get payment
up front for expenses or arrange to charge them to your
* Bill immediately upon delivery of
a service or product, instead of waiting until the end
of the month.
* Take bank cards instead of extending
* Use a check guarantee service so you can
accept checks safely.
* Offer discounts of two to
five percent for receipt of payment within 20 days from
the date of invoicing.
* Act promptly on overdue
accounts. The longer the account is overdue, the less
likely it is to be paid.
Business Time Management
Don't Let the Day Slip Away: Develop a
It's tempting to
sleep late or spend extra time reading the newspaper
when you work from home. But since you're your own boss,
you need to get started promptly and keep working on a
regular schedule. Here are several suggestions:
Take action. Sit down at your desk, make up or review a
"to do" list, and then begin with the most interesting
task on the list.
* Set a deadline for yourself to
complete a given project by a certain time.
yourself by promising a reward if you accomplish a
Once you get started, your work
can develop a momentum that keeps you going all day.
We've also found, however, that taking a break every few
hours contributes to an increase in productivity and
Don't Allow Disruptions: Set Specific
Even the most
carefully constructed plans are vulnerable to
interruptions and distractions. The most common ones you
are likely to encounter fall into these three
* Household responsibilities. Don't
let errands and household activities become a regular
part of your workday. Cultivate the attitude that even
though you are physically at home, you are mentally at
* Family and friends. Talking to your spouse,
children or friends can potentially consume much of your
time. Instead, work out a clear plan with your loved
ones and get their support. Let them know when you will
be working so they will avoid disturbing your
* Losing focus. Don't interrupt
yourself with office minutia or extraneous phone calls.
Set up your environment to help you stay focused on the
job at hand. Put temptation out of sight as much as
If disruptions continue to be the bane
of your workday, consider relocating your office to a
different area of the house or changing your office
hours, perhaps working after the children are asleep or
early in the morning before other activities have
Don't Become a Workaholic: Make Time for Your Private
As your own boss,
it's also easy to become a workaholic and inadvertently
neglect your personal life, family and fun. Follow these
recommendations to avoid burnout and depression from
undertaking too much work:
* Set up a firm
schedule. Establish a fixed stopping point every day and
do not compromise on this except for emergencies. If
needed, develop a closing ritual such as a walk around
the block or taking a class to make sure you get out of
the office at a set time.
* Protect your free time.
Make sure clients know your work hours, and do not take
calls or allow business visitors to "drop by" at any
* Establish minibreaks. Set aside five to 15
minutes a day to "do nothing." Spend that time doing
something you enjoy such as gardening, playing with a
pet, or sitting in the sun.
If you tend to
overwork, it is crucial to develop new values that
support a healthier and more balanced, productive and
secure life. Never underestimate the therapeutic effects
of relaxing on a regular basis.
Don't Do It the Hard Way: Use Technology to Streamline
technology can streamline many of your most
time-consuming administrative tasks -- and save you
money. Here are a few examples:
* Use the
templates that come with your word processor for
standardized documents such as fax cover sheets and
* Learn to rely on the spell checker,
grammar checker, dictionary and electronic thesaurus
features that are part of many software packages to
enhance the accuracy and quality of your business
* Scan names, addresses and phone numbers
directly from business cards into your computer using a
* Use special preprinted papers from
companies like Paper Direct (800/APAPERS) and Queblo
(800/523-9080) to produce attractive customized flyers,
business cards, presentation folders, brochures and
In addition, many kinds of
technologically-advanced equipment are available that
enable you to speed up daily tasks. These include
programmable telephones, high-speed printers, electronic
postage scales, electric staplers, letter-opening
machines, letter folders and dictation
22. Don't Try to Do It Alone: Call in
Experts As Required
We believe success
is always a joint venture. You can't do it alone -- and
you don't need to. Seeking out help when you require it
is basic to success whatever you undertake
professionally. In fact, research shows that those who
are most successful on their own are willing to pay for
needed information and expertise. They also hire experts
to help them carry out aspects of their business they
know little about or are too busy to handle.
are a few guidelines that show when you can actually
save money by bringing in outside Assistance:
When the time you could spend on business matters
exceeds the cost of the hired help. An example would be
hiring a computer consultant to solve your hardware
problems so you can take on an extra project.
the cost of hiring someone is self-liquidating. An
example would be paying someone to produce a newsletter
that generates more business for you.
* When you have
more to lose through lack of knowledge than the cost of
someone else's expertise. An example would be hiring a
public relations specialist to obtain publicity for you
rather than trying to do so yourself if you have no
experience in this field.
Don't Become Isolated and Lonely: Keep in
To avoid feeling
isolated, working from home requires you to take the
initiative and become involved in the world around you.
Here are seven ways to keep in contact with peers and
* Join community organizations and
professional, technical or trade associations.
specialty publications such as newsletters, professional
and trade journals, and magazines to keep you informed
about what's happening in your field.
relevant workshops, seminars and courses.
* Take an
electronic coffee break using your computer and an
* Schedule regular breakfast, lunch
or dinner meetings with peers.
* Set up or join a
networking group that meets on a regular basis.
Affiliate or form joint business relationships, or start
Whichever options you choose,
don't neglect the importance of personal and
24. Don't Compromise Your Values: Choose
One of the best
things about self-employment is that you can tailor your
work to fit your own values, priorities and lifestyle.
If you want to put your family first, for example, you
can select work hours and a vocation that let you devote
more time to them. If you want to pursue artistic
endeavors, you can pick a career that enables you to
utilize your creativity. The key is finding a match
between what you desire from life and what the world
needs and will pay for.
The message here is to
clearly define your goal and determine how you can
utilize your skills to achieve that goal. As you will
see, the most amazing thing about being self-employed is
that the more closely the work you do fits who you are,
who you want to become and how you want to live, the
more successful you'll be.
10 keys of an
effective International Marketing Plan
1. KNOW YOUR
Select your market
(country) based on the need you perceive for your
product in that market. To find out IF there is a need
for your product there are several sources you can
tap: That country's embassy or consulate. Embassies
are generally in Washington D.C., and depending on the
size of the country, consulates are located in major
or strategic cities around the USA. The local library.
Find o t if they are on-line. If so, they might have
access to a National Trade Data Base (NTDB) which is
updated monthly. You can also subscribe to their
service and receive monthly CD
2. KNOW YOUR
Find out who your
competitors here in the USA are and where they export
to. Who are their distributors or sales outlets in
your target country. Find out who potential local
competitors are in that country and where their
products originate from. Find out pricing information
if you can. Again, embassies and consulates as well as
that country's trade mission (if any) and their
chamber of commerce (here and local) may be
3. SHOULD YOU
GO INTO THAT MARKET?
Now that you have this
basic information you need to decide if it will be
worth your effort to proceed with this country.
Usually the decision to market in a new country has
far reaching effects on product development, pricing,
financial and staffing. Do you need to conform to
special laws and standards? (i.e. ISO 9000, metric
etc.). Does your product come under export
restrictions? (strategic high tech products). Does
your product require specially trained technical
support? Do you need to translate documentation?
(Warning! Translations need to be done into the
translator's native language; he/she must be familiar
with your industry).
vs [OWN] SALES REPS
Should you market your
product yourself, or through a distribution network.
Using your own sales reps means they are your
employees and therefore you have "control" over their
sales efforts. It also gives you "presence" in that
country. The downside is, that it is expensive, you
pay them whether you sell anything or not. Unless you
are there physically you don't really have "control"
over their activities and there is a ramp up time
since most likely they don't hit the ground running.
Distributors, in contrast, are established companies
with their own presence, infra structure and
[hopefully] success. They are already staffed and have
a market established and they may have already a
pipeline (prospects) for your product. The downside
is, that they usually represent many other products as
5. HOW TO
CHOOSE A DISTRIBUTOR
The U.S. embassy in that
country can help locate distributor candidates for
you. There is a fee associated with that; check with
the Department of Commerce (DOC). You can also check
trade directories for the Region (where available) and
local trade publications for ads from distributors.
You may want to ask another company which has similar
products to yours (not competitive) and find out who
they are using in that country. That country's
embassy/consulate often has such directories as well.
After you contact potential distributors find out who
they are representing, how many products, how many
sales reps they have, what their annual volume is,
what they feel the market for your product might be,
if they have technical support people (if that's
what's needed for your product). When you have
interviewed several potential distributors (on the
phone, fax or e-mail), spend the money and visit the
country and meet them personally. You will also get a
first hand feel for the market. That is very
important. You may want the same distributor represent
you in several countries. (i.e. all that use the same
language such as Austria, Germany and parts of
Switzerland). Be cognizant of cultural and language
differences! It, might however, be better to have one
distributor for each country (not all eggs in one
basket). In South East Asia it is different. Often one
distributor has several countries because the markets
may be small (Hong Kong, Singapore, Thailand, Malaysia
It is of utmost importance
that you execute a distributorship agreement (or sales
rep agreement) which has been reviewed by an attorney
with international contract experience. It should
contain, aside from the boiler plate clauses, length
of term, information to what degree the distributor
has the right to disclose information, pricing
policies, discount policies, technical support policy,
training, customer training, who pays for
documentation, translations (if applicable),
commissions and/or royalties, and sales quotas. If a
distributor wants and gets exclusive geographic
rights, then quota requirements are a must. If
distributor does not make quota for a specified number
of times, h can lose the distributorship or the
exclusive status. Establish policy on multi-national
accounts, "house" accounts, third party sell, etc.
Will you provide sample product and/or demonstration
You have to consider what
kind of support your distributor or sales rep will
get. If it is an "easy" product may be very little
technical support is required. High tech products like
hardware and software require skilled technical
support not only from you to the distributor but also
from the distributor to the customer. You need to
maintain a state-of- the-art level of support at the
distributor level. For that he either needs to attend
training at your location here in the USA or you need
to provide that training at his location. Who pays for
it? (needs to be in the agreement). US Manufacturers
often provide frequent visits to their distributors.
Some technical support visits, some marketing/sales
FOR YOUR PRODUCT(S)
Establish what the
potential market for your product is. Although a
variety of market research may be available from the
country's embassy/consulate or DOC, trade publications
etc. you may have to do some rearch yourself through
local channels. What is the "life" for your product?
Is it something consumers will purchase on a long term
continual basis or is it a seasonal product or fad. Is
it a capital purchase which requires regular
maintenance long term. Is there residual income from
maintenance, support, value added
9. COST OF
When putting together the
marketing plan, cost of marketing overseas is a major
consideration. If you decide to market in one country,
how much more expensive would it be to market to a
number of countries in the same region. Cost factors
are travel and related expenses, regional and local
trade shows, local training, documentation,
translations, added technical and other support,
communication cost (tel/fax), licensing (export and
local), adaptation to local standards and laws (i.e.
220V/50Hz), conversion of CCIR and not the U.S.
10. LONG TERM
When a decision is made to
sell a product in foreign markets, it is a long term
commitment. The first 12-18 months are difficult at
best and most likely will not show our company and
product must build a customer confidence. Only a long
term commitment will provide this. When making a
marketing plan, it should contain sales and cost
figures for at least 5 years, which are updated
annually and reviewed quarterly. If approached
properly, a comprehensive business plan is