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MAILING LIST COMPANIES
HOT HOME BUSINESSES
HOME
BUSINESS --- ISSUES OF CONCERN
ZONING REGULATIONS: What kinds of restrictions are you likely to run up
against?
INSURANCE: Do you need a special policy or
will a homeowners policy suffice?
BUSINESS OPPORTUNITIES Are your perceived
business prospects really REAL?
FUNDING: Where do you expect to find startup
money? Do you have a realistic estimate of your needs?
FINDING CUSTOMERS: How will you develop your
clientele?
CREDIBILITY: How will you give your
home-based a credible image to suppliers and customers?
HOME BUSINESS --- TRADE ASSOCIATIONS
HOME OFFICE
ASSOCIATION OF AMERICA
49 RICHMONDVILLE AVE., SUITE
302 WESTPORT, CT
06889
Annual Membership $35. Offers discounts on group health insurance,
long-distance phone service, shipping, and other business needs. Has Washington lobbyists.
AMERICAN
ASSOCIATION OF HOME-BASED BUSINESSES
BOX 10023, ROCKVILLE, MD 20849-0023
TEL: 800-447-9710 Annual Membership $50. Includes subscription to
CONNECTOR newsletter. Sixty chapters in USA.
HOW TO START A HOME BASED BUSINESS
Fifteen years ago, going to work meant
traveling from home to a plant or office. Today, many people do some or all
of their work at home. A private marketing research firm estimates that as
many as 13 million people squeeze extra hours into their workweek by taking
work home from their full-time jobs, and that 9 million people are
independent home-workers who work exclusively at home.
Many people find working at home is the
"ideal work arrangement" and decide to formally set up businesses
in their homes. SBA estimates that more than 3 million of these home-based
businesses are now operating throughout the country. Every day, people are
striking out and achieving economic and creative independence by turning
their skills into dollars. Garages, basements and attics are being transformed
into the corporate headquarters of the newest entrepreneurs -- the home-based
business person. And with today's rising demand for
"service-oriented" businesses and recent technological advances,
the opportunities seem to be endless.
Getting Started
Before you dive headfirst into a home-based
business, it's essential that you know why you are doing it. To succeed, your
business must be based on something greater than a desire to be your own
boss. You have to plan and make improvements and adjustments along the road.
As you ask yourself the following questions, remember: there are no
"best" or "right" reasons for starting a home-based
business. But it is important for you to understand what this new venture
involves.
Working under the same roof that your family
lives under may not prove to be as easy as it seems. It is important that you
work in a professional environment. One suggestion is to set up a separate
office in your home to create this professional environment. Ask yourself
these questions:
· Can
I switch from home responsibilities to business
· Do
I have the self-discipline to maintain schedules?
· Can
I deal with the isolation of working from home?
· Am
I a self-starter?
Finding Your Niche
Choosing a home business is like choosing a
spouse; your decision must be approached with a great deal of care and
concern for the future. Before you invest your time, effort and money, take a
few moments to answer the following questions. They'll help separate sound
ideas from those with a high potential for failure.
· Does
your home have the space for a business?
· Can
you identify and describe the business you plan on establishing?
· Can
you identify your business's product or service?
· Is
there a demand for your product or service?
· What
advantages do you have over your competitors?
· Do
you have the talent and expertise needed to compete successfully?
· Can
you successfully run the business from your home?
Legal Requirements
A home-based business is subject to many of
the same laws and regulations affecting other businesses. Here are some
general areas to watch out for, but be sure to consult an attorney and the
state department of labor to find out which laws and regulations will affect
your business.
Be aware of your city's zoning
regulations. If your business operates in violation of them, you could be
fined or closed down.
Certain products cannot be produced in
the home. Most states outlaw the home production of fireworks, drugs,
poisons, explosives, sanitary or medical products and toys. Some states also
prohibit home-based businesses from making food, drink or clothing. In
addition, there are registration and accounting requirements to
consider.
Among them:
· You may
need to obtain a work certificate or license from the state.
· Your
business's name may need to be registered with the state.
· Usually,
a sales tax number must be obtained.
· A
separate business telephone and bank account normally are required.
· And if
you have employees, you are responsible for:
· Withholding
income and social security taxes.
· Complying
with minimum wage and employee health and safety laws.
Once you've thought over the pros and cons of home-based businesses, it's
time to put together a business plan.
Developing A
Business Plan
Putting together a business plan forces you
to take an objective and critical look at your business idea. Even more, the
finished product is an operational tool that will help move your business
toward success. A business plan should be neat, not fancy, and should
include:
Cover Page: List the business name, address,
mailing address, telephone number and the name of the owner(s). Identify your
primary goals and objectives.
Business Description: Include an accurate and
concise description of the business.
· A. What
is the principal activity? Be specific. Give product or service
descriptions.
· B. How
will the business be started?
· C. Why
will it succeed? Promote your idea.
· D. What
experience do you bring to the business?
Marketing
Remember, marketing is the core of your
business. Carefully think about these questions:
· A. Can
you market your business from home?
· B. Who
and what is your market?
· C. What
pricing and sales terms are you planning?
· D. How
will you be competitive?
The Financial Plan
Money is what fuels all businesses. With a
little planning you'll find that you can avoid most financial difficulties.
When you're drawing up a financial plan, don't worry about using estimates.
The process of thinking through these questions helps develop your business
skills and leads to solid financial planning.
Start-up Costs: To estimate your start-up
costs, include all initial expenses such as fees, licenses, permits,
telephone deposit, tools, office equipment and promotional expenses. Business
experts say you should not expect a profit for the first eight to 10 months,
so be sure to give yourself enough cushion.
Projecting Operating Expenses: Include
salaries, utilities, office supplies, loan payments, taxes, legal services
and insurance premiums. Don't forget to include your normal living
expenses.
Projecting Income: It is essential you know
how to estimate your sales on a daily and monthly basis. From the sales
estimates, you can develop projected income statements, breakeven points and
cash flow statements. Use your marketing research to estimate initial sales
volume.
Cash Flow: Cash pays your bills, not profits.
Even though your assets may look great on the balance sheet, if your cash is
tied up in receivables or equipment, your business is technically insolvent.
Or to put it in layman's terms, you're broke. Make a list of all anticipated
expenses and projected income for each week and month. If you see a cash flow
crisis developing, cut back on everything but the necessities.
Remember, preparation is the foundation of
success. Talk to home-based business people, join a home-based professional
association or "moonlight" at a similar business. Learn how to use
business resources to strengthen your home-based business. Success doesn't
just happen, you have to make it happen.
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