Home Business

Slow Frying Fish: Understanding that Marketing Takes Time

Yes, marketing is a special kind of slow frying fish. You have to grab the fish out of the pond today and throw it into the pan, so you will have fish to eat next month, next season, and next year.

Sometimes the toughest part of this process is that, when you are sitting in your office with a quiet phone and clean paper and a blank computer screen, it’s tough to get going. After all, what’s one day spent playing solitaire (or Tomb Raider or Pro Skater 4)? Plenty. This could be the day you were destined to catch a very large fish. That’s why you need to flesh out the Marketing section of your business plan. You’re going to come up with a list of things you can do, and put them both in your business plan and on your calendar. You’re only allowed to move them off your calendar if client work or a bona fide emergency crops up (with bona fide emergencies generally involving police, fire, or hospital personnel). This is something you need to do. And you need to keep doing it for as long as you own your business.

To do list for Marketing Your Work From Home Business:

- Draft or revise your marketing plan.
- Make a list of everyone you know.
- Write your introductory business letter and send it to your list.

Say the word “marketing” to any group of people, and you’ll see reactions akin to eating a sour lemon. People tend to think of marketing as some sleazy, hard sell gimmick or game that lures the unsuspecting into purchasing something they neither want nor need. But that isn’t necessarily marketing (and it certainly isn’t good marketing). Marketing is simply letting everyone know about you and your business in order to attract clients. And because you will be doing the marketing, and representing your home business, your marketing will have your personal imprint. Here’s the most important thing to know: Next to the actual service you offer, marketing is the most important thing to do. If you don’t market, you won’t have to worry about bookkeeping (well, not much, because not much money will be coming in). You won’t have to worry about expanding, organizing your office, or filing. Without marketing, your home business is nothing more than a well-kept secret.

Work From Home Business need list:

- Business plan

- Calendar

- Rolodex, address book, or contact manager (however you keep track of people you know and their contact information)

Understanding Real Home Based Business Marketing

We’re going to start at the end for this home business section. Here’s the maxim you need to remember: You should be marketing full time or as close to full time as possible. Whenever you are not working on a project for a client, you should be marketing. Whenever you have nothing scheduled on your calendar, you should be marketing. When you have a quiet afternoon, you should be marketing. Marketing should take up a full work week until you get your first client. For the first one to three years of your business, you might spend 50% or more of your time marketing. After three years, that might drop to 35%. No matter how busy you are, you should still spend at least 20% of your time marketing. If that sounds like a lot, let’s consider the marketing cycle. Using the preceding definition, (“letting everyone know about you and your work at home business in order to attract clients”), let’s run through the typical marketing cycle in the next post.

Myths of Work From Home Self Employement Summary

In this article, you took a moment to calculate the benefits and costs of leaving your current job and becoming your own employer. By objectively calculating the cost of regular employment, you have a list of realistic, actual costs you are currently incurring. By comparing these against the costs you will now need to assume as you start your home business, you will gain a realistic sense of the financial
advantages and disadvantages when you compare the two situations.

As you learned in this article, however, assessing the risks is a bit more difficult. How much did risk impact your employment? It’s tough to calculate that, particularly if you were “almost” laid off or “nearly” part of a merger. Likewise, business risks aren’t always easy to pin down. Putting a price tag on months and months of worry over what “almost” happened can be tough to do as well. The better suited you are to self-employment, the less risk such an undertaking represents.

Be sure to check out our other 3 posts to reference what we are talking about the myths of home business self employment.

Myths of Work From Home Self Employement Summary

Home Based Business Job Information

Work From Home Business Risks

Be back soon with more great information on the home business industry!

Considering the Risks

The most threatening risk of self-employment is simply put. If you don’t work, you won’t have any money. You could go bankrupt. You could go homeless and hungry. The feedback that leads to these consequences is equally, brutally abrupt. The phone will go silent. The mailbox will be empty. There will be no performance reviews, no “warnings,” no closed-door meetings offering a second chance. And the risk is very real. Approximately 500,000 small businesses (10% of all businesses in operation) closed in 2003. A roughly similar number started the same year.

Of the business closures, a little more than 35,000 went bankrupt – meaning that they couldn’t pay their bills. (For additional information on these statistics, visit the Office of Advocacy website of the Small Business Administration, app1.sba.gov/faqs/faqIndexAll.cfm?areaid=24.) Perhaps 10% of all businesses doesn’t seem like a high percentage to you. But when you consider the hard work, money, and risk assumed by someone starting a business, you quickly realize it is a high stakes gamble. If another 10% of all businesses fail the following year, too, and the year after that, and the year after that (as the historical data cited previously suggests), perhaps very few small businesses succeed
for very long.

But it’s the gaps in information that speak the loudest. We don’t know who fails, really – which industries, or which small businesses. Nor do we know why. Even the methodology is open to question. Search for “small business failures” on the Internet, and you are more likely to find arguments about why some statistics are misleading than you are to find the statistics the debates are actually referring to. So it is pretty much up to you to figure out if the risk is worth it – with at least some indication of a pretty high chance of failure.

Assessing the Costs

In addition to the possibility of failure, however, you are also taking on considerable cost. In essence, you are gambling that you can make enough money in your home business to provide you with adequate income and cover the additional costs you’ll assume.

Here are just some of the many expenses you’ll take on when you become self-employed:

• All of your Social Security contributions – 15.3% of everything you make over $400. Right off the top, you’ll pay $3,060 for earning a modest $20,000.
• Estimates of your income tax payments – with penalties and interest if you under pay.
• All of your retirement contributions, medical and dental insurance, disability insurance, life insurance, and child care. Kiss your “matching funds” goodbye. Remember your employer’s cafeteria plan? Well, the cafeteria is closed now.
• Vacation pay, holiday pay, sick pay, bereavement leave. Call it whatever you want (hey, you’re the boss now), but no one is going to pay you for these days. This is now coming out of your earnings.

This isn’t even a complete list – just the start of a long list of risks and responsibilities you are now going to fully accept. You’ll also be responsible, for example, for purchasing and maintaining all of your equipment and supplies, providing utilities, paying for your business postage, and doing without the services of the mailroom, tech support group, and cleaning staff.

Take a moment to compile your own list of the complete costs and benefits you’ll be assuming when you start your own business. Then, compare it to the costs and benefits of regular employment that you assessed in the preceding section. By comparing the two assessments, you’ll have a better feel for the demands and rewards of the road ahead.

Over the past few days I have talked about how a home business start up is supposed to take place and how the preparation is needed.

Home Business Summary

At this point, your office is set up, your phone log is waiting to be filled, and you have probably
given notice. Now is the time, if you have any doubts or questions, to go back and reread any
section in the website, to rerun your budget figures, or to revisit an issue about which you solved yet
are still feeling uncertain.

If you are ready to go, you are probably wondering what you are going to do now. After all, you
have no clients – just a sparkling business plan and a new home office. Be sure that you set the alarm clock for your regular waking time. Even if the phone never rings tomorrow, you will need to put in a full day at your home office.

You can find the previous posts below!

Tracking Invoices and Work From Home Income

For most service-based work, you will need to send an invoice to your clients. You should number your invoices in sequential order, although what number you start with is up to you. Record each invoice number, as well as the date, description, marketing code, and amount of money invoiced. The description should briefly state who the invoice was sent to and what project or work it covers. (More detailed information will be on the invoice itself, as well as in email communications and contracts with the work from home client.)

You can use your invoice-tracking document to help track the source for each project you invoice. That way, you know what marketing methods have been the most successful in your business. Adding a “marketing code” to your invoice tracking document is one way to record this information. Because it is your business, you will develop your own codes. Some suggestions are as follows:

P for postcard mailings
G for groups you belong to
W for former co-workers or those from your former company
R for referrals from current or former clients
M for magazine ads

You might also want to make these codes more specific; for example, “P” for referrals from your PTA contacts, “1QP” for the first quarter postcard mailing, and so on. As I said, the system is really up to you. The goal is to keep track of what kinds of advertising and publicity work best for you so that after your first year, you can clearly see exactly where to put your marketing dollars and why.

If you sell products, you probably won’t send an invoice for each book, basket, or piece of jewelry sold. However, you should set up a separate sales record spreadsheet that keeps track of these amounts, as well as any sales tax you collect.

Must Have Hard Copy Work At Home Business Records

Electronic documents are easy to store and take up much less space. But as of this writing, there are still some things that should be kept on paper. Technically, you can scan every scrap of paper you might keep and store it electronically. However, you might prefer, instead, to keep the paper version for awhile, and only go the scanning route if you are certain the document is likely to be kept for archival purposes only.

Also, some legal documents can come into a gray area. If you signed a contract with a client, keep the paper copy. It’s much easier to prove the contract was actually signed. Here is a list of the paper records commonly maintained by most businesses:

1. Client contracts. These are the contracts you and your clients sign when you agree to perform services. If the agreements are email/letter exchanges only, be sure to print those out and keep them in the same place as your other contracts. Get any verbal agreements confirmed in writing, even if it is only an email or letter reiterating your conversation.

2. Working papers of current and past projects. These are the notes, research, drafts, and other items from each project. If you have a database of your work, these files should have the inventory number of the appropriate work.

3. All business-related receipts (even if only part of the expense is home business related). Credit card slips should be saved, even though you will also have a monthly statement. Expenses in which only part of it is a business expense (for example, your electric bill) should also be saved.

4. Informational files. These are files about groups you belong to, issues affecting your service or subject matter, and copies of all marketing materials.

5. Copies of tax returns, beginning with the year you start your business. (You should probably keep your returns from prior years, too, although for nonbusiness reasons. Check with your accountant or with the IRS website, www.irs.gov.) The same goes for state and local taxes.

6. Previous versions of your business plan. As your home business plan changes and grows, you will want to keep past copies. Print your business plan and file a hard copy once every six months, or just before and after making broad changes to it.

Setting Up Home Business Expense and Income Records

If you’ll be taking on all the tasks associated with owning and running a home business, you will need to keep systems as streamlined as possible. A little bit of effort now in organizing your expense and income records will save you days and days of frustration later. In addition to saving you tons of extra work and frustration at tax time, keeping your income and expenses relatively up-to-date will give you an always-current picture of how much money you have brought in and how much money is going out.

Before you begin, review the budgeting so that you are familiar with the type of home business expenses you will need to track. The easiest way to set up income and expenses is to base the categories within your records on those in Schedule C of your federal tax return. To obtain the most current Schedule C, go to irs.gov and download the most recent form. Print it, and read through the directions.

Recording Home Based Business Expenses

The percentage of home expenses will depend on how much of your home you actually use as your home office. Let’s say that you have a 1,000 square foot home, and of that, 250 square feet is used as your home office. Therefore, you use 25% of your home for a home office. That means 25% of your utilities and rent/mortgage will be deductible as a business expense.

If you plan to sell your home shortly, discuss the home expense deduction with your accountant or tax preparer. When the home is sold, you might have to repay some of this amount. At the end of the categories, you should have two numbers off to the side. One is labeled “Total Expenses,” and it will add up all the expense columns – simply create a formula that adds up all the expense column totals, not including the working number columns for entertainment and household home business expenses. This supplies you with the total amount you have spent to date this year. The other number is labeled, “Net Income This Year.” This is the result of taking the total of all “Income” columns and subtracting the “Total Expenses” number.

This number is the amount you have actually earned after deducting business expenses. Much of this spreadsheet is tax related; however, don’t forget to also keep track of other, tax-related information, including home mortgage interest, charitable deductions, and IRA contributions.

Watch tomorrow as we show you how to track your home based business invoices and record your work at home income.

4. You can get wealthy by operating a home business, but you do not have to be wealthy already.

How much startup money you need depends on your acceptable risk level, the other resources you have available to you, and the type of business you start. Later, you will form your draft business plan – and the budget that goes with it. Because home businesses vary widely, so too do the funds required to start one. Most home businesses require the savings of at least two to six months of living expenses. Additional funding sources are available, too, for small-business startups, particularly if you are in a Redevelopment Zone.

Redevelopment Zones and Enterprise Zones are undeveloped or povertystricken areas the government is hoping to improve. The government will provide you with loans or other assistance in exchange for you establishing a business there. Other criteria are also sometimes required, such as hiring local help. Check with your local (city or county) government for more information about these zones in your area.

For possible funding sources beyond your local bank, check with your local Small Business Administration office (or go online at www.sba.gov). Enterprise Zones can be found by contacting your state or local government offices.

5. Results count. Paper gets recycled.

Learning comes in many, many forms. Experience in the real world, trying something new, independent reading and study, travel, volunteering, raising kids, and many other activities all offer opportunities for learning valuable skills. Don’t get me wrong – college degrees are very valuable. But running your own business is a highly pragmatic endeavor. For someone who holds any type of formal academic
diploma, the actual degree is usually not as important as what you have learned to get it.

In some professions, licensing is required, often in a process that includes coursework, experience, and a college degree. But if you are considering being an accountant, for example, you should already be aware of the requirements and possess any licensing you need. If you are in a field in which licensing is key, and you don’t have it, you might want to wait (or consider a line of business in which licensing is not required).

And if you have not had the opportunity to obtain a college degree, don’t sweat it. Did you know that Bill Gates dropped out of college? Dave Thomas, who started the Wendy’s fast food chain, never made it to high school. Some studies have shown that college graduates earn more, but these studies have,
overwhelmingly, focused on people who are employees, not business owners.

Work From Home Business To do list

- Determine whether you’re financially and psychologically ready to start a home business.

- Examine your skills in self-discipline, organization, and perseverance.

- Explore your abilities in customer-relations, creative thinking, and leadership.

- Think about your interest in ongoing professional growth and development.

- Determine where and how you can achieve improvements in your home business-readiness.

A home business reflects the business owner – both our good and bad traits show up in our home business. For that reason, it is very important to know our strengths and weaknesses and to try and correct those that will be detrimental to the operation of a business.

Such assessment is not easy. It requires a raw, unvarnished honesty that is rarely called on elsewhere in life. Get used to it. If you can keep that unflinching ability to continually assess yourself, warts and all it will help you resolve conflicts and correct small mistakes before they become big mistakes.

Now that you’ve assessed your business readiness, you’re ready to get started creating the backbone of your new home business—your business plan and budget.

Here is a look at all the Posts on “Ten Questions to Assess Your Home Based Business Potential”

Day 1 – Getting Started With Home Based Business

Day 2 – Home Based Business Start Up

Day 3 – Launching Own Home Business

Day 4 – Marketable Skills To Work At Home

Day 5 – Home Business Industry Knowledge

Day 6 – Self Discipline

Day 7 – Being Assertive and Organized With Home Based Business

Day 8 – Constant Learning And Creativity

Day 9 – Being Responsible In Your Home Business

Day 10 – Work At Home Business Summary

I hope you learned more about whether or not you are capable or ready to launch your own home business.

In the mean time, visit our work at home home page to see one of our many great home based business opportunities.

10. Asset: Responsibility

+ The responsibility that will really help you pass this question is the kind that is above and beyond the minimum requirements of daily life. Try to think of responsible roles you willingly took, yet weren’t necessarily expected of you. If you can identify at least one major responsible role that you currently fulfill or have fulfilled in the past, and can easily admit making mistakes in this role, you pass this
question.

√ If you have started a business before, and can honestly state why it failed (or why you closed it), you automatically pass this question with a plus.

– Those with no responsible roles, or those who have responsible roles but have never admitted making a mistake as part of that role, fail the question.

How To Improve:

• If you have trouble admitting your mistakes, practice admitting them. We are all human, and no one is perfect. When you own your business, sooner or later you will have to admit a mistake to a client. If you hide the mistake, the situation will only get worse – and it can harm an otherwise impeccable reputation.

• If you have not had responsible roles, volunteer. Start with a small commitment – say, once a month. Increase that commitment, both in time and responsibility, after 6 to 12 months. When a position on a nonprofit board becomes available, willingly take on the role. (Of course, this should be a nonprofit you are excited about helping.)

• If you can’t find responsible and interesting volunteer roles, ask yourself: “If I could do anything to improve the world, what would I do?” Then see what you might be able to do to make that happen. You might not want to start your own nonprofit organization (after all, you’re going to be busy running a business), but you might be able to make a difference and assume a leadership role in the process.

Evaluating Your Overall Score

This section discusses how you should interpret the number of pluses, minuses, and check marks you scored in the preceding quiz. Note that, because all 10 qualities are important, pluses won’t utomatically “even out” the minuses. It is truly important to be fully prepared in all areas. Here’s how to read your results:

• Minuses: If you have one or two minuses, you have some work to do, but you can probably take care of these issues and continue working toward starting your business. If you have more than two minuses, you might want to delay starting your business until you’ve improved in these areas. All 10 of these qualities are vital to starting your work from home business, and trying to create or greatly enhance 30% of them is going to be too overwhelming while you are also trying to start a business. Take 6 to 12 months, at least, and then retake the test.

• Check Marks: These are the “barely passing,” or C- grades in this quiz. If you have up to four check marks, you have a lot of work to do, but you should still be able to start your business. If you have five or more check marks, put off the start of your business. Address the issues, and retake the
test when you are ready.

• Pluses: If you have all 10 pluses—stop. Are you really being honest with yourself? Please be sure that you really deserve a plus next to all 10 questions. If you have six to nine pluses, good for you! Depending on the answers to your other questions, you probably passed this test. If you have
fewer than six pluses, but have enough check marks to pass, you might still want to delay the start of your business. In this situation, it’s really a judgment call.

Overall, any areas needing improvement should be addressed. The more areas of improvement you have, the riskier it will be for you to start your home business.