Can Suzy Start a Successful Home-based
Business?
by Judy Vorfeld
Suzy's pregnant with her second child and likes her job, but between
daycare, doctor visits, and a long daily commute, she's exhausted and
frustrated. She yearns to quit her job and start her own home-based
business. Since she likes computers, and enjoys people, she wants to try
running a business doing typing, design, and other office-related tasks.
What are her chances of success?
Excellent, if she's highly organized, passionate about working at home,
and committed to bringing balance to her family and business life. She'll
need at least a year from startup before she can expect much of a return
on her initial costs.
It will take that long to network, either locally or on the Internet,
build relationships, learn more about her new business culture, and begin
to bring in steady money. Unless Suzy has clients already lined up, she
has some challenges ahead of her. But if she understands the need to build
a good foundation, she may succeed.
Business Plan
"The hardest part of creating a business plan," says inc.com, "is
getting started." This article is a "must" for anyone starting a business,
especially those who are terrified when they see or hear the phrase
"Business Plan."
Suzy may never have outside investors, but she does want to run her
business effectively. So it's okay to skip parts and write very simple
sections with general background information on the company and the
industry. This slick article suggests she focus instead on the areas of
her plan that are currently most important to her. And I strongly
recommend that her business plan says that at the end of five years,
she'll have 90% of her business from referrals.
Incorporate or Sole Proprietorship?
Most people starting home-based businesses will begin with either a
sole proprietorship (D/B/A) or limited liability corporation (LLC), while
others will become "C" corporations. There are distinct differences. If
Suzy doesn't have access to a savvy Certified Public Accountant or
attorney, she might go to this
excellent article and study the choices.
The Right Business Name
Now the fun begins. She wants a name that is clever, but not too cute.
She needs to research - in her city and county - what names are currently
being used so she can avoid conflicts with other businesses.
Trademarking nationally may cost at least $600, but if she ever plans
to work via the Internet, trademarking at this level may be well worth the
effort. If Suzy is mainly going to be online, she can research available
business names via the search engines. It's important for her to decide
what name will work best over a five- to ten-year period.
If Suzy plans to become a Virtual Assistant, she'll want to join an
online group like IVAA, International
Association of Virtual Assistants. "A Virtual Assistant (VA)," says Terri
Lee Romine, President of IVAA, "has the power of acting as a person who
contributes to the fulfillment of a need or furtherance of an effort or
purpose, while working 'virtually.'"
Romine continues, "With the wonderful advancements in technology it is
not only possible, but can be a preferable way of having a personal /
executive assistant on one's team. Most anything you would normally give
to your assistant or secretary you can have a Virtual Assistant take care
of for you."
Pricing
Some people might advise Suzy to figure out her cost per hour based on
the local market, and indeed one of the first things she'll want to do is
find out what others are charging. This is a good method for meeting
people already in the business. Most professionals in the same industry
will help and encourage her.
Other consultants determine their hourly rate by taking the total of
all annual expenses, multiplying it by the profit percentage (generally
10-20%), adding the two together, and dividing by 1,680 (48 working weeks
per year multiplied by 35 hours billable time per week). How does one
figure annual expenses? Start with these: rent/mortgage, utilities,
salary, taxes, professional dues, insurance, equipment, furniture, travel
and entertainment, software/hardware, and supplies.
Suzy can find quite a bit about pricing in my article on starting a home-based
business, and from many other resources, including IVAA. I hope Suzy
looks at both the local and virtual pricing pictures, since many people
who begin their businesses doing local work later become involved in
Internet assignments. This is a new and exciting way to transact business,
one that offers great flexibility and personal security.
Payment
What about getting paid locally? Be firm, Suzy! Work out an
arrangement with each client, and never forget you are a professional. If
someone comes to pick up a job and only has 80% of the cash (but promises
to bring the remainder tomorrow!), you have two choices: 1) explain that
you'll gladly give him/her the work when you have the entire amount, or 2)
offer to give the client 80% of the work.
No money, no job. Partial payment, partial job. Don't give away your
work, Suzy. In so doing, you set a precedent and may later regret it.
Other businesses don't give away their work and their products. Why should
you?
I hope Suzy will require a deposit on most jobs. To get payment from
Internet clients, she might use businesses like Aquent's Fast
Cash, Kagi, or PayPal.
She'll find that most of the time, it's okay to accept checks, locally
and on the Internet. Services are at the low end of the income spectrum,
and for that reason, many people in such businesses cannot afford a
Merchant Account, where credit cards are used. She also needs to know that
banks are reluctant to grant credit cards and Merchant Accounts to people
transacting business as a sole proprietorship.
Marketing/Advertising/Public Relations
Suzy has to do it all, and it's an awesome responsibility. One of the
best words to cover much of what she'll be doing is "networking." Locally,
she'll need to get involved with a chamber of commerce or a
networking/leads group. Libraries often provide strong support for the
small business community.
"Networking," says Nancy Roebke of ProfNet, "is done at any time of day-
morning , noon and night. One of the nicest benefits is the friendships
you can make while pursuing common goals." That's especially good news for
Suzy, who has a platter of chores to spread throughout the day and
evening.
She needs to get the word out about her business, but even more, she
must determine where she can get good clients. The Yellow Pages may or may
not bring her business. Getting involved in the community helps in many
ways. Many communities also have Entrepreneurial Mothers groups.
If she's really tied up at home, she might consider hosting a group of
like-minded women who can brainstorm, troubleshoot, and generally be a
support to each other as they learn and grow in the world of small
business.
Brochures and business cards come and go. Things change: services,
phone numbers, e-mail addresses, etc. It's a good idea to not print too
many brochures at a time, especially if she puts prices in them. I
recommend she not do so.
A brochure needs good contact information, and she'll want to have her
phone number printed at least two or three times. It's good to put a list
of services, synopsis of her business experience, and note anything else
that might be interesting: community service, awards, achievements,
hobbies, etc. It's also wise to date the brochures.
Work Order
It's best to have some kind of a contract for most jobs. Drop me an e-mail and
I'll send you a copy of my work order in PDF format (if you have Adobe
Acrobat Reader) or in WordPerfect so you can use it as a guideline for
your business work orders.
Conclusion
Suzy can succeed. She'll have to learn to focus on issues, be very
analytical, be task-oriented, and make the most of every moment. In her
community, and on the Internet, people are waiting to help her. If Suzy
asks for help, she'll get it. I did, and got (and still do) help from
people locally and on the Internet.
Online Recommendations
Desktop Publishing
Forms
(types) of Business
How to
Start a Home-based Office Support Business
Networking
ProfNet
Template for a
Killer Press Release, by Dr. Paul Hartunian
Trademark Info from 4Trademark.com
Writing a
Business Plan
Desktop Recommendations
A good, hardbound
dictionary printed within the last 4-5 years A synonym book like
Rodale's Synonym Finder. ISBN 0-446-37029-0
Gregg Reference Manual,
Seventh Edition, Sabin. ISBN 0-02-819933-2
Judy Vorfeld
Office Support Services
Online & Document Editor - Web Analyst & Renovator
Webgrammar
Phone: 623-876-8168 || Fax 623-876-8169
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