Home Business

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

Finding Professionals to Hone Written Marketing Materials

Here is a list of the most commonly used professions to help you market your business via written documents – and what to look for:

• Graphic designer – This is someone who takes care of how your marketing materials look. He will take the text, logo, and other information you give him, and lay it out in a way that is visually pleasing. You might believe you can do these tasks yourself, but think carefully about this decision. Layout and design is both an art and science, requiring a professional sense of what catches the eye, how much whitespace is needed, and whether the page is balanced to laying out the materials in a way that fits web or print specifications. Some designers will do web materials as well as printed matter, although most who do will limit their activity to technically simple sites (for example, with no e-commerce or linking databases).

• Printer—Yes, this is the person or business who prints your materials from postcards to flyers to brochures to business cards. When selecting a printer, ask for samples of her work and a written estimate of cost and turnaround time. Look for the little details that can make your life easier, too, such as free local delivery and an explanation of why it is best to print a particular document in a certain way. Don’t be afraid to ask about price breaks, either. Most printers can offer substantial per-piece discounts when more of a particular item is printed. So if you’re thinking about printing brochures, for example, ask for an estimate to print both 500 and 1,000 brochures. The price difference might be minimal. Some printers specialize in environmentally friendly inks and paper, but their prices might be substantially higher than traditional printers.

• Writer – These individuals can craft the language you use in your flyers, brochures, and other printed or web materials. They might also help you write speeches or come up with written handouts to give to audiences when you speak. As with the printer and graphic designer, the writer should be able to provide you with a written cost/time estimate and relevant examples. Delivery of the text should be relatively easy, too – be sure that the writer has the software you need, or can easily email text to you in a useable format.

Using Professionals to Help You Market Your Business

Although you can do many of the low-budget marketing activities on your own, it also makes sense to hire someone else to help you in many instances. The most likely people you will want to speak to are a marketing strategist and/or a public relations specialist:

• A marketing strategist looks at your overall marketing plan and recommends ways to improve it. She might suggest how to improve your current marketing efforts (such as making your current web presence more effective) or suggest a venue you aren’t currently using (such as appearing at a special event). She might also suggest ways to bring more focus to your marketing approach and minimize a scattered, trial-and-error strategy. When considering a marketing strategist, look for someone with broad marketing experience and a knack for maintaining focus and organization.

• A public relations specialist works with you to get you noticed by the media. This means suggesting story ideas involving you and your business to television, radio, and newspapers (also called “pitching” a story). When hiring a public relations specialist (or publicist), look for someone with key media ties. He might have actually worked for one or more media outlets. He can also usually help you craft a press release, and if hired, might insist on doing the writing himself (with your input) to achieve the desired result. For both of these professions, they should be able to provide you with a set price for a one or two hour consultation. This allows you to invest a relatively small amount of money while also making sure that each is the right person to undertake more expensive projects.

After the consultation, consider what was suggested and whether you’d like to extend your marketing efforts with the professional or simply act on the advice provided. Also, both of these professions tend to specialize, so ask what industries their clients generally come from – for example, publishing, high-tech, small retail businesses, or some other specialty. Be sure that they have the industry background you desire, while providing sufficient assurances that work on your particular project is not merely a cookie-cutter repeat of what they have done for your competitors.

During or after the initial consultation, each one should be able to tell you what is unique (and marketable) about your business so that the boilerplate approach is avoided or minimized. Other marketing professionals commonly used include

• Image Consultant/Voice Coach. This person might help you appear more professional when you meet people or focus solely on a particular venue – for example, how you look on television or sound on radio. The idea is to get the world to notice you, and not bypass you because of the way you look or sound. Most will offer a set fee for classes, making budgeting easy to do, with the option of more one-on-one consultations if desired. Your publicist should know of someone to refer – or ask friends who appeared on television or radio who they used.

• Marketing Coach. This is someone who acts as a coach with a focus on helping you market your business. This person might offer many of the services provided by a marketing strategist or publicist, but generally do so with an emphasis on providing you with tools, help, and insight to do the work on your own, as opposed to doing it for you. As such, they should be both certified coaches and have a strong background in marketing. Visit the website of the International Coach Federation (coachfederation.org) to find a certified coach specializing in this in your local area. Other coaches specialize in helpful, marketing-related activities, such as public speaking.

How Much Marketing Is Enough?

The suggestions in this article can make marketing sound like a never-ending process. Although it will continue for as long as you own your business, there are several circumstances indicating you might need to take a break:

• When you are tired of talking to strangers (or people, period), give yourself a break. That’s enough for the day. If you still need to do some marketing activity, focus on researching prospective clients or some other activity that doesn’t involve meeting the public. (Just don’t make “research” the only marketing task you perform.)

• When you need all of your time to perform work for clients, go ahead and take a brief marketing pause. (By brief, I mean one to two weeks.) If you are always taking “breaks” from marketing, you might need to look at your schedule and figure out a way to make the marketing process a more natural fit. For instance, you might make Friday night a postcard-labeling-andstamping party, with pizza afterward. When you receive responses from the postcards, schedule the meetings when you would be taking a break from working anyway – perhaps at lunch or over mid-morning or mid-afternoon coffee.

• Longer projects might require your full-time attention. That’s okay – but compare your marketing cycle to the project’s time frame and schedule marketing appropriately. For instance, let’s say that you are working on an intensive project lasting six months. Your marketing cycle (from initial marketing activity to signed contract) generally lasts two months. This means that during month four of your large project (at the latest), you need to gear up and begin marketing again.

Why? You don’t want to come off a large project with nothing to do and no money coming in – you want to have other work to do as soon as the large project ends. At some point, your marketing will downshift. When you have steady work coming in, month after month, you are probably at a point when you don’t need to do special marketing “pushes,” such as postcards or ads.

Here’s one work at home business example:

Let’s say that it is early April. You look at your spreadsheet and see you have work lined up for this month (April), as well as May and early June. In a week or two, work for the rest of June is pretty much lined up. At this point (and assuming your monthly total of all business is sufficient to meet your needs), you can probably avoid huge mailings (for example, mailing postcards and flyers), speaking strictly for marketing reasons, and other marketing activities that seem to take up too much of your time. At this point, you want to shift to “maintenance marketing” – one or two regular activities you do each week that will continue to generate fresh leads, yet take a minimum of time and money. (By the time you get to this stage, you will know precisely which activities those should be, based on what has worked and not worked in your home based business.)

Here’s an example: Several years ago, I “downshifted” to a maintenance marketing schedule. While I might send out a postcard mailing every one to two years, on special occasions, I’m not sending two to four mailings a year, as I used to do when my business was new. Nor do I write as many articles or perform as many speaking engagements solely for the publicity. But every week, I attend BNI (Business Network International), and network with other small business owners for about two hours. This is now my primary marketing activity. If I see a company that would make a particularly good client, I might write the key decision maker a letter introducing myself. For the most part, however, the bulk of the marketing is being done during those two hours per week. (I also meet with BNI colleagues over lunch or coffee, and this might add another hour per week.)

That’s not a lot of time, really – particularly when compared with the early years of my business, when marketing was a 20–30 hour per week commitment. The loss of a client, a project falling through, or other setback might bump up my marketing to 5–10 hours per week, but only for a brief period of time.

Tried and True Marketing Techniques

The following sections describe some traditional and low-cost marketing techniques available to home businesses. You probably won’t want to use all of them, but almost any business can benefit from some variation of these types of marketing.

Display Advertising This is advertising that is displayed, usually in a newspaper, magazine, phone book, and so on. (Website ads are discussed in the next section.) If you are a retail organization, display advertising needs to be part of your marketing plan. If you are not a retail business, however, display advertising might just be an expensive exercise in frustration and expense. So, before you hire a graphic artist and start calling for ad kits,

• Do your homework, and do it well. Display advertising really needs to be researched thoroughly if you are going to do it at all. Which venue? Your local newspaper or the national magazine? (There’s a huge difference in price, believe me.) Can you handle the response if the ad works as projected? Will you get inappropriate calls? What is your break-even point? How many clients or how much business will you need in order to make more than the cost of the ad? Can you handle that much work?

• Understand why you want the ad. Display ads might be a prudent move for other reasons than a direct line to potential customers. If it is important that you or your company be well-established (for example, a building contractor), it might be a good idea to invest in display ads. The impression that your company can spend the money for a large display ad, repeatedly, can make a customer choose to do business with you because he knows that you didn’t just arrive in the community yesterday. Also, many of these ads appear in nonprofit venues, such as theater programs and school sports calendars. So, you might be placing the advertisement more as a way to show community support. It’s a great way to build what’s known as “goodwill,” but you might not see a direct return in dollars and cents in the near future.

• For a service business, display ads might backfire. Let’s say that you need a good mechanic. Which would you rather use: Your friend’s recommendation or someone from an ad? That’s right; you’re going to go with your friend’s recommendation if at all possible. So if you’re the mechanic, and you’ve placed a display ad, who is going to call? People who can’t reach their friends in time, are new to the community, or don’t like their friends’ answers. In other words, clients who are more likely to be both desperate and a bit picky (or downright difficult). It’s a great way to reach people new to the community (or perhaps new to having the need you’re addressing, such as folks who just purchased a used car). But you will also have to screen prospective clients more closely, and the percentage of callers who just aren’t a good fit will be higher. (You can mitigate this by choosing your venue carefully – perhaps a display ad in the Welcome Wagon package targets the newcomers you want, while avoiding less desirable customers.)

Writing Your Letter Your letter should include four short paragraphs:

• A brief opening paragraph announcing that you are now in business. Specify what kind of business you are in, and whether you will be limited by geographic boundaries.

• In the second paragraph, let them know what you hope to provide that your competitors do not. Keep this brief—no more than three sentences.

• In the third paragraph, ask for their help in soliciting business. Ask them to let you know if they are interested in your services and to refer you to anyone who might be interested in your services. Give them one or more examples of people who might use your services.

• Close the letter. Thank them for their attention/support. Let them know that you appreciate the warm relationship you have with them. Let them know how to reach you at your business (sometimes as simple as “I can be reached at the phone number below if you have any questions.”)

• Don’t do a simple “mail merge.” Personalize the letter, so the recipient knows you took the time to think of him directly. That means addressing him as you normally would (for example, as “Sam,” not “Mr. Jones” if that is how you address him) and perhaps including a sentence or two unique to his letter. (“If you have questions, I’d be happy to answer them when we work out Monday morning.”) Be sure to sign each letter in blue ink (which is friendlier, and makes sure that the reader knows you really did sign it, as opposed to having your scanner and printer do it for you).

Here’s an example of an introductory letter used to announce the opening of a writing business:

January 12, 2005 Ms. Jane Smith 123 Profit Lane Friendly, CA 94702 Dear Jane,

I just want to let you know that I have opened my own writing business. Focusing solely on nonfiction, I am offering to write articles, reports, press releases, and other business and marketing documents. As part of my business, I am also offering writing instruction so that clients have the option of learning to write better themselves. You probably know a lot of other writers, but my business stands out in several important ways.

First, I offer writing instruction as well as writing services – I’m not insistent on doing the writing myself because I know many small business owners would rather do their own work. In addition, my background includes a broad base of journalism, technical writing, and marketing. This is rare, as most writers specialize to an extreme. With my varied background and business focus, anyone you refer to me will get the professional writing services they want – not overly specialized experience they don’t need. My clips and references confirm this. (See my website at www.[your site here].com, where I’ve included testimonials from several happy clients.)

Several of my business cards are enclosed, along with a full list of the writing services I offer. If you know of someone who has a writing deadline looming, and can’t quite get to it, please mention my name and offer one of my cards. I would be more than happy to meet with them and see if I can help. Most importantly, however, I want to thank you for all of your inspiration. My conversations with you after Job Club really helped me to focus on what I want to do, and what I do well. With this business, I have both. If you would like more information, please don’t hesitate to contact me at the phone number below.

Sincerely,

[your name and business name here]

Home Business To do list
- Approach local media regarding articles and interviews.
- Set up a time and date to perform regular marketing activities. Pick out which ones you will do ahead of time, so you are prepared.
- Obtain quotes from service providers (as needed) such as printers, marketers, and mail houses.
- Research networking and speaking opportunities.