Home is where the market is

Home is where the market is

One of the big mistakes that companies make when selling to small business, is misunderstanding the home-based business owner.

In fact I have banned the use of the term. It is totally misleading as it puts an enormous band of very different people in one basket. It also fails to take into account how technology has transformed this sector.

This was brought home to me (pun totally unintended) when I read some survey results from The Small and Medium Enterprise Research Centre at Edith Cowan University. They had done some research into Australia's home-based business sector, based on a survey of 1,604 business owners.

The traditional image of the home based business owner is a woman in her gym gear making a bit of money on the side to pay for an overseas holiday. But guess what? About 55% of the businesses run from home are started by men. About a third of the men work more than 50 hours a week and many of them employ staff.

I am sure that any follow-up survey will find that a lot of these men and women soon move out to hire more staff and grow larger businesses.

We know this is the case from research we do into fast growing companies: nearly half of them are started from home.

The problem comes when marketers lump these people – I call them the home-based business builders – with the small business owner who will always work from home and run a micro business. The two groups could not be more different yet they are often marketed to in the same way.

The builders are using the home to keep their costs down in the early stages but they have every intention of growing a larger business. The nesters are happy at home and have no intention moving out. In fact they will manage their growth so the business does not get too big. In fact 24% say they do not want to grow at all – or even get smaller!

So the message for marketers is to do further research into this market. New sub-sets are emerging all the time including the part time entrepreneur who has a small business they run at night. Or the teenage entrepreneur who runs their own computer business in their school holidays and when they should be doing their homework.

And one more thing: let's ban that awful marketing phase SOHO – small office home office from – the English vernacular.

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Home-based business thriving

Home-based business thriving

HOLLY LA PAT Special to the Daily Press

It's a female thing.

Women have been selling to each other through home businesses since the original Avon lady delivered her first bottle of perfume back in the early 1900s.

A hundred years later, companies like Avon, Tupperware, Pampered Chef and PartyLite still offer a chance to earn money outside of a conventional job.

In the current economy, how is it working out for local women?

Joanie Wilcox of Hesperia started selling PartyLite candles nine years ago. "The economy wasn't exactly like it is now, but it wasn't booming either," Wilcox said.

Still, she says, she quickly started making money.

"It surprised me because I'd never done sales in my whole entire life," she said. "But I believe in the products."

PartyLite is one of the many direct selling businesses built around in-home parties, which most consultants refer to as "shows." The sales consultant holds the show at the home of a hostess, who invites her friends.

The hostess earns credit for free products based on the sales at the show. And the consultant, who earns a commission on the sales, encourages other guests to book a show of their own ... and earn free products.

The lure of free products is always tempting. But how are sales these days?

"Actually, it's been great," said Gayle Shoemaker, a Loma Linda-based consultant for Pampered Chef kitchen products who does many shows in the High Desert. "A lot of people are staying home to cook, and we show them how to prepare a meal for about two dollars a serving."

Originally, Shoemaker says, she started with Pampered Chef just to earn the cooking tools in the demonstration kit.

But after she'd sold enough to meet that goal, "I realized I was having fun. My husband said I should rethink quitting."

For the first few years, Shoemaker says, she "dabbled" at her Pampered Chef business. "Then they had massive layoffs where I worked."

Shoemaker survived the cutbacks. "But I thought, what would I have done if that had been me? I decided to take my little home-based business and see what I could do with it."

A year and a half later, she was able to quit her job and sell Pampered Chef full time. She's been doing that now for seven years.

But not all consultants make that kind of money.

One Victorville woman says she sold Tupperware for three or four years. "If you didn't go in and get all the specials for yourself, you could make some money," she said. "I always wanted the product – I never made any money."

She dropped out of Tupperware last fall when the economy slowed down.

"People started saying they couldn't afford to buy anything."

However, Ramona Baca of Adelanto says her Tupperware business is going strong. She started selling in the 1980s because she was, as she put it, "a bored housewife."

Now she considers it a full-time job. Baca says she averages just one or two parties a week, but at one time she did at least two parties a day.

Because of all the customers she's gained over the years, "Most of my sales come by phone or the Internet."

Internet sales are becoming another source of income – something that first Avon lady never dreamed of.

And how is Avon these days?

Erica Pagano of Victorville sells Avon in addition to her full-time job. "I didn't do it as a business," she admitted. "Just to support my own habit and sell to people at work."

Still, by saving up her earnings over the course of several bimonthly catalogs, she's earned enough to buy some nice extras from time to time.

"I got a bigscreen TV, I got a laptop," Pagano said. "I'm Christmas shopping now – it's enough to cover that."

Finally, how many people stick with their home selling businesses after they start?

Consultants seem to agree that at least half of the new recruits stay with the program. Not all of them earn a full-time income, but for many, it's enough money to make it worth their while.

And for some, just breaking even on the purchase of their own tempting products is enough.

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Insurance for home-based businesses

Insurance for home-based businesses

New Business Opportunity

Run Your Own Energy Saving BusinessPLC Seeks International Partners

As a home-based business you need to make sure you have the correct level of insurance to protect yourself. Standard homeowner policies do not generally provide cover for home-based business activities.
Insurances to consider are:

*
public liability cover for persons visiting your business at home (e.g. customers and suppliers)
*
insurance of business equipment, inventory, tools of trade, office furniture or computer equipment
*
workers compensation for any employees working from your home
*
fire, storm and theft cover for the loss of any stock and equipment
*
professional indemnity insurance if you're in a service industry, especially if you're contracting to government
*
loss of income due to personal accident or illness
*
costs arising from interruption to your business
*
marine policy if you send products via freight carriers or post.

It's important to note that many policies don't cover tools of trade, office furniture or computer equipment used for your business, unless you've specifically advised your insurer and they've agreed to cover you.

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Registration & licences for home-based businesses

Registration & licences for home-based businesses

Sales & Marketing Pros

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As a home-based business, you need to register for business and company names, taxation, and other business licences and permits. In addition, home-based businesses often have to comply with particular state, territory and local government regulations.
When you use your home as a place of business, specific regulations may apply to the impact of your business activities on the surrounding residential area, such as pollution, energy use and parking. Depending on your type of business, you may need special permits relating to zoning, signage, noise levels or health issues.
Many industries have developed their own codes of practice and standards of conduct in relation to customers. Some codes are mandatory under fair trading law, while others are a voluntary form of industry self-regulation.

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Taxation for home-based business

Taxation for home-based business

New Business Opportunity

Run Your Own Energy Saving BusinessPLC Seeks International Partners

As with any new business, there are a number of tax obligations to comply with when starting up. You may need to register for a Tax File Number, Australian Business Number, Goods and Services Tax, Pay As You Go withholding and Fringe Benefits Tax. You may also be eligible to receive small business entity concessions.
If you carry on a home-based business there are also specific tax issues you should know about, in particular, what expenses you can claim and whether you have to pay capital gains tax when you sell your home.

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Home Based Business Opportunity

Starting a home-based business

Looking to Work From Home? ForexTrading May Be Right for You.

When you're starting any business there are many issues to consider. We've covered the general ones in our starting a business guide, but people intending to use their home as a place of business often have to comply with particular state, territory and local government regulations. These regulations often address the impact your business activities may have on the surrounding area (e.g. pollution, energy use or parking). Some issues to consider are:

* council approval - zoning, signage, health issues
* home mortgage and rental agreement restrictions
* insurance - ensure you have the correct level to protect yourself
* financial management - arranging finance and setting up systems
* taxation - Capital Gains Tax, deductions for expenses
* location - zoning and redevelopment
* set up - separate your work space from the rest of your home.

A wide range of government assistance is available to new home-based businesses. You may also wish to seek the assistance of a solicitor, accountant or business adviser.

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