Home Business

Whether you rent or own your home, you must comply with your city or county’s zoning laws. Finding out the laws in your area should be fairly simple. If you have a computer, look up your city’s web page on the Internet. Go to the section of the planning department, and look for information on running a home business. If you cannot find the information that way, stop by your city’s planning department and ask for regulations governing home businesses. As with landlords and homeowner associations, most planning departments will be concerned about noise, traffic, and eyesores.

They don’t want a big sign reading, “Al’s Junkyard” in a quiet, residential neighborhood, and they don’t want traffic rivaling Macy’s on a busy Saturday. If your planning department hits you with regulations that might be problematic, ask if there is a workaround or if you can receive a variance. Don’t hesitate to ask the planning department how many home businesses it has licensed. Chances are, the more it has allowed, the more routine your visit will be, and the less hassle involved. If your planning department has not experienced very many home businesses, set up a second meeting.

Bring as much research as you can find about your type of home business, and educate your planning department. Don’t let all those scary stories about the planning department put you off – yes, planning departments can give big developers a hard time, and often for very good reasons. But you’re a very, very small and very quiet fish. Many planning departments will be relieved that someone like you is waiting to see them. With a check and a completed form in my hand, I was in the Planning Department offices for 30 seconds! The planner on duty said something along the lines of, “Writer—can’t get less controversial than that,” signed off on my home permit, and shooed me out of the planning office.

You will need to review your lease/CC&Rs and talk to your landlord/condo association, respectively. There is a very good chance your lease or CC&Rs out-and-out forbids business activity. However, if you have a decent relationship with your landlord, approach him or her and ask for a change to that stipulation. Condominium owners might be in a more difficult bind – although you own your own condominium, changing CC&Rs usually requires great effort, as you often must convince the majority of owners in your complex to go along with the change.

How to go about getting such a change should be covered in CC&Rs or other paperwork relating to your condominium owners’ association. Whether you need to renegotiate your lease or get your co-owners’ permission, try to couch your discussion in terms that avoid the phrase “running a business” out of your home. This has the connotation that you want to start a nightclub, trucking company, or department store from your humble abode – and you definitely do not want your landlord or neighbors to think in those terms! When you approach your landlord, start off with a comment such as, “I don’t know if you remember, but I do quite a bit of writing.” Continue by saying that you would like to do this kind of work for yourself instead of others. You have now placed the activity into the category of something that is already happening, with no adverse consequences.

Your landlord might worry about your ability to pay the rent, and might ask for additional money in your deposit or verification of money in the bank. Before you talk to your landlord, be sure that you have several reassuring things to tell her, such as, “I’ve been doing this for other companies for 15 years, and I already have 10 clients interested in my services,” or, “As you know, my partner’s salary alone is sufficient to pay our rent.” If you know of people in your complex who work from home for their employer, who are students, or who are retired and home during the day, be sure to compare yourself to these people as favorably as you can.

After all, if your next door neighbor is doing work from his home for ABC Corporation, why should your landlord refuse to grant you a modification on your lease so that you can do similar work for yourself? Condominium and planned development homeowners can try a similar approach, but again, changing the rules governing your condo might be difficult. Although renters usually have one person – a landlord or apartment manager – to convince, you might have to persuade the entire complex. What do you do if your landlord/condo association won’t budge? If you really want to start your business, move. Every region in the United States has plenty of apartment and condominium complexes that will not mind if you are running a home business. Look especially in up-and-coming areas of your city or areas that are struggling a bit.

Overcome Your Inexperience

Everyone has to start somewhere no matter what kind of home business your getting into or getting involved with. So don’t let that hinder or slow down or be an excuse that your inexperienced in the home based business industry!

I noted that ageism actually works in your favor when you strike out on your own. Owning your own business remakes you from an employee who seems “too old” into a consultant who is wise and experienced.

Conversely, if you are on the opposite end of the experience ladder, you might struggle gaining the confidence of potential clients. If you don’t have at least three to five years of experience in your chosen line of work, you will need to prove to prospective customers that you have what it takes to work for them. (And no, a college degree, in and of itself, won’t cut it.) For those with little or no experience, you might have the necessary credibility if you:

• Started a business (and operated it successfully) earlier in your life

• Worked at a job in your chosen field while attending school

• Have a solid background in business in general and possess sufficient basic business and interpersonal skills (often called “transferable skills”) In all three cases, however, you will be working harder than other business owners, who have the experience you don’t. Seriously consider this. The average 12-hour day of a new business owner might be 14 or 16 hours for you, as you gain experience others already possess.

Calculate the Cost of Home Business Health Insurance

Pick up any newspaper, visit any news site on the Internet, and the current health insurance situation screams from the headlines. Health insurance can be expensive, tough to get, and insufficient when it comes to covering chronic illnesses or prescription drugs.

Is the need for health insurance a deal killer? Perhaps not. Consider these options:

• Check whether your spouse or partner’s employer can cover you.

• Join a group offering health insurance. Check with your local chamber of commerce or professional industry group. These plans often allow participation without minimal restrictions on prior conditions, and are less likely to require a physical or reject you for a health condition.

• Choose to form a partnership or corporation, which might qualify you for group rates. Talk to a benefits specialist about the minimum requirements for obtaining group insurance and the difference in pricing between an individual and group policy.

• Continue your employer’s coverage via COBRA (Consolidated Omnibus Budget Reconciliation Act), national legislation enacted that allows an employee to continue health insurance through his or her employer, even after leaving. There are a number of restrictions and requirements—for example, you must be working for an employer with at least 20 employees or more and be currently enrolled in the health plan. If eligible, you (and possibly dependents you also covered via your employer’s health plan) would be able to continue this coverage for 18–36 months, depending on your circumstances. However, this does not mean that you will pay the same amount currently deducted from your paycheck—you will be paying your employer’s contributions to your health premiums as well, making the total cost higher, and often prohibitive. (For more information, visit dol.gov/dol/topic/health-plans/ cobra.htm and www.dol.gov/ebsa/faqs/faq_consumer_cobra.html.)

Not sure who to contact as a benefits specialist? My recommendation is Maria Poroy, Access Business Services, Inc. She can be reached at accessbenefitsgroup.com. Based in California, she is licensed in some other states as well. Maria has been invaluable to me when assessing health insurance options. Or, you might want to check with the National Association of Professional Insurance Agents (pianet.com) or the Independent Insurance Agents and Brokers of America (iiaa.org). See Appendix A, “References and Resources,” for more insurance resources.

Clear Up Outstanding Legal Issues

Is there a student loan that you “forgot” about? Do you need to attend traffic school—but haven’t, even though the ticket was five years ago? Are you in the middle of a divorce, or waiting for the divorce to be finalized? Are you aware of any outstanding arrest warrants? Is the IRS trying to collect money from you? Do you have a lien against your house or other property? Do you owe property, state, or local taxes? These issues will come back to haunt you, especially when you begin the process of launching a home business.

Starting a business means that you will be filling out paperwork – and that paperwork will enable many government entities to find you. What’s more, your marketing efforts will be telling everyone about you and your new business. The entire world will know about you, so if you have to clean up some neglected legal or tax issues, now is the time to do it. When you take care of the problem, be sure that you know how long any such delinquency will appear on your credit report or criminal record. Credit problems, once fixed, might remain on your record for as long as 7 to 10 years. Criminal matters might stay on your record indefinitely.

Be sure that you know what consequences are likely as a result of tax or legal issues. Most problems won’t necessarily prohibit you from owning a business, but you will need to know, for example, that a bankruptcy on your credit report means that you won’t be able to get a business loan for quite some time.

For criminal matters, enlist the help of an attorney. (You can usually obtain a referral from your local bar association.) Tax and financial matters can be resolved with the help of an accountant or credit counselor. If you need a credit counselor, be sure to use a nonprofit agency. Avoid scams that offer to clean up your credit for a price.

Tomorrow we will talk about health insurance for work at home businesses!

Review Your Employment Contract

Before you put the first word on your business plan, take out your current employment contract and read it carefully, word for word. If you have emails, letters, or other documents instead of, or in addition to, a formal contract, read those, too. Don’t assume that stipulations agreed to in email are not binding because you “didn’t sign anything.” In many instances, such emails can be considered evidence of what is called an oral contract, and therefore legally binding.

If you are unsure whether you would be held to the terms, consult an attorney. Did you agree not to contact customers about your impending departure from the company or for a given period of time after leaving the company’s employment? Are you required to provide a certain amount of notice? Are you allowed to pursue a business that competes with your current employer? Employment contracts often include language that restricts or prohibits direct competition, taking customers, and similar activities. Be sure that you know what limitations you must abide by prior to starting your business. But what do these limitations mean, in terms of your business? It depends:

• If you are planning to start a business in direct competition with your employer, and your employment contract forbids it, your home business plans might be thwarted. However, if the non competition language seems broad, you might want to have an attorney review it to determine whether it is enforceable. But bear in mind that you might have to fight your employer in court to prove how unenforceable it is.

• If you are not allowed to take current customers with you, you might have to allow for a higher marketing budget. Check whether your contract allows you to have any contact with these customers at all – even if they cannot be your customers, perhaps they would be willing to refer others, thus partially circumventing this restriction. As your excitement about your business escalates, you will want to tell the world. Don’t do it (not yet, anyway).

Although you might be very excited about your new venture, your co-workers might have very different feelings. They might be jealous, longing for the courage you have and envying your ability to make such a transition. Meanwhile, your boss could become suspicious, wondering if you are stealing supplies or customers, wooing other employees to be part of your new venture, or just not being as loyal as he expects you to be. Depending on your company’s policy and your current job, you could even be escorted out the door as soon as you announce your plans. Keep quiet until you give notice with a specific plan in mind.

Creating Your Business Plan, Part 1: What, Where, When, and How

Okay, you now know that you can do this. But where do you start? This article takes you through the biggest obstacles first – those half dozen “deal breakers” that might make you seriously rethink starting your home business. Then, step by step, we will outline a business plan for your home business. You will describe your business and its structure, document who your customers are, and define what services you provide and how you get business. Your business plan must also outline the financial plan and structure of your home business;

Home Business To do list

- Review employment contract

- Investigate health insurance options

- Scrutinize experience

- Compare desired business with actual home

- Review planning and development restrictions

- Hold a family/household meeting

Eliminating the Biggest Obstacles

There are six major obstacles to your home business – what business negotiators would call “deal killers.” These obstacles include limitations imposed by your existing employment contract, any outstanding legal issues you might be facing, your health insurance costs, inexperience in your chosen field, neighborhood restrictions, and family objections to the home business. Most of these obstacles can be resolved. But before you consider the cost of a new computer or give notice at your current job, you need to determine whether any of these issues present insurmountable barriers to the success of your new business.

You’ll need list

- Self-employment journal

- Current employment contract and related communications

- Copies of all current rental or homeowners’ restrictions/guidelines

Later we will start with your employment contracts

Summary

Marketing isn’t sleazy, yucky, expensive, or phony – unless you make it that way. (And of course, you won’t.) How you market your business will largely depend on the type of business you run and your own personality. But don’t be fooled into thinking that you are marketing because you’ve responded to Internet ads all day— getting out in front of other people is vital. In fact, marketing isn’t really a separate activity at all, but an integral part of how you operate your business.

Here is a list of the posts that summarize what we talked about.

Work At Home Business Marketing

Marketing Your Home Business

Understanding Home Based Business Marketing

Marketing You and Your Home Business

Announcing Your Home Business

Writing Letters For Your Home Business

Tried and True Home Business Marketing Techniques

More Work At Home Business Marketing Techniques

Few More Work From Home Business Strategies

How Much Home Business Marketing Is Enough

Using Professionals to Help You Market Your Home Business

Finding Professionals to Hone Written Marketing Materials

Using Pros to Craft Your Web Presence

Take care and stay tuned for more information on home based businesses and our work from home opportunities!

Press Release

This is an announcement to all relevant media outlets (radio, television, magazines, newspapers), letting them know that you have news. A lot of these are recycled, particularly if they’re little more than, “Yay! I started my business.” Send one out if you really have something newsworthy to announce – but be sure that it is truly newsworthy. What type of story is the media outlet expected to write or air? Why is the beginning of your business newsworthy? Unless you are doing something no one else has thought of, or you are holding a big event, it probably isn’t. And, after you come up with a newsworthy press release, your work isn’t done.

Plan to spend time calling to follow up on each release sent to each contact. The combination of an extremely newsworthy idea and persistence will work. Anything else will fail. (See Appendix A, “References and Resources,” for press release particulars.) Keep this type of marketing in mind. It isn’t likely to be a good fit when you start your business, but you can certainly build your business to a point when you’re ready to do this—perhaps one to three years down the road.

Marketing on a Budget

I hear you scoffing. ”Radio and TV ads? What, when I win the lottery?” It sounds like the marketing plan for some large, multinational business. And here you are – small, new, feeling poor (or actually poor, or both). There are many ways to market your business without spending five or six figures— or even four. Because the touchstone of good marketing is getting out, meeting people, and telling them about your business, many effective marketing techniques take time, but not much of a direct outlay of cash. You will still spend money, but we’re talking tens or hundreds of dollars, not thousands. So it’s now up to you to get out and meet people – or prepare to do so. Remember that list of ways to market my business I’m asked about? Here are the ones that work for me. (Most don’t cost very much.) Choose one, and do it tomorrow. No clients yet? Phone still quiet? Choose another one, and do it the next day. Still no response? Keep going.

Next we will talk about how much marketing is enough.

Continuing on with more home based business marketing techniques that are useful.

Website

If you’re a service business, your website acts as a sort of virtual brochure. It will be rare that someone contacts you strictly after seeing your website with no other contact. Websites are vital, but they work best in conjunction with other forms of marketing. Although updating your website might be considered part of your marketing work, don’t fixate on your website to the exclusion of meeting real people and connecting.

Cold Calling

I’ve never tried this, and quite frankly, never want to. Before the “do not call” list went into effect, my responses to telemarketers ranged from professional but abrupt to downright nasty (for which I’ve done penance). Because most of us feel the same way, why would you want to market your business in such an annoying way? Can you imagine someone barging into your home any time they feel like it? This is what cold callers are doing – barging in, and unilaterally attempting to change the recipient’s calendar and priorities. Because it’s also time-consuming, draining, and rarely the image you want anyway, you will probably want to avoid it in most instances.

How do you get the attention of that ideal client who is a business? If you can’t find a personal connection, send a marketing package (cover letter and brochure minimum – press clippings if you have them) to the key decision maker. Make a follow-up call one week later, asking if he received the package, and does he have any questions. But even here, be prepared for a low return – many decision makers have gatekeepers, and/or routinely discard unsolicited mail. Avoid any “pseudo-cold-calling” strategies. In other words, don’t call strangers and say that you’re conducting a survey, providing information only, or any other strategy used to weasel out of saying that you’re cold calling.

With the Do Not Call registry in place, calling consumers (for example, private individuals) can be a costly mistake. Businesses are not covered by this registry, however, and some exceptions for calling consumers include calls from charities and calls from political organizations. If you’d still like to make cold calls, particularly to private households, be sure to check out the Federal Trade Commission’s Do Not Call website, ftc.gov/donotcall/. Contact a lawyer if you are uncertain whether the specific calling you are doing is prohibited.