Home-Based Business For Dummies

by Paul Edwards, Sarah Edwards, Peter Economy

Overview

Expert tips and advice on starting a home-based business

Starting your own home-based business is a great way to supplement your income in these tough economic times. With thirty percent new and revised material, Home-Based Business For Dummies, 3rd Edition gives you the most current and up-to-date information you need to navigate your way through the whole process.

You'll get trusted and creative advice on how to start being your own boss, bringing in a steady paycheck, and running a business you'll enjoy.

• Complete coverage of legal and financial aspects of a home-based business
• Effective advertising and promotional strategies that won't break the bank
• Tips and information you need to make your business profitable
• Advice on outfitting and running a home office

Whether you've been affected by downsizing in these uncertain times or are just looking to earn some extra cash, Home-Based Business For Dummies, 3rd Edition shows you how to avoid scams and truly start working from home for profit.

Product Details

ISBN-13:	9780470538050
Publisher:	Wiley
Publication date:	01/07/2010
Series:	For Dummies Books
Edition description:	3rd ed.
Pages:	384
Sales rank:	432,932
Product dimensions:	7.30(w) x 9.20(h) x 0.90(d)

About the Author

Paul and Sarah Edwards are award-winning authors of 17 books with over 2 million books in print. They have also hosted radio and TV shows. Peter Economy is a home-based publishing consultant and is the best-selling coauthor of more than 50 books, including Consulting For Dummies.

Read an Excerpt

Chapter One

Why a Home-Based Business
in the 21st Century?

In This Chapter

* Defining "home-based business"

* Deciding to be on your own

* Assessing your readiness to start a home-based business

* Understanding which business options are open to you

Congratulations! You've decided to start a home-based business. We welcome you as you join with millions of others who have already made a decision to start a home-based business. According to a recent study by Ohio State University, more than five million home-based businesses currently exist in the United States alone, and these companies are being joined by more than 1,500 new business owners every day.

Owning your own home-based business may be the most rewarding experience of your entire life. And not just rewarding in a financial sense (although many home-based businesspeople find the financial rewards to be significant), but rewarding in the sense of doing the work you love and in finally having control over your life.

Of course, every great journey begins with the first step. In this chapter, we first consider what a home-based business is, and then discuss the major types of home-based business. We discuss some of the advantages of owning a home-based business and assess whether you're ready to start one yourself. Finally, we consider how to get in touch with what you really want to do.

TRUE STORIES

Paul and Sarah's journey home

Paul and Sarah began working from home before it was fashionable foranyone other than people in the construction trades, writers, artists, and craftspeople to do so. In fact, the neighbors wondered whether Paul was unemployed (Paul's first home business was doing political and public-affairs consulting).

Sarah actually led the way home, setting up a psychotherapy practice as a way of reducing the stress she felt in her prior government positions, and to actively raise Paul and Sarah's young son. Says Sarah, "I didn't feel I had many choices as a working mother. Juggling a successful career and motherhood meant being exhausted most of the time and not being able to do either job with the dedication I wanted. I was determined, however, to have both a career and a family, so I did my best in a difficult situation." Doing her best meant a trip to the hospital with a stress-related illness where the doctor told her she would die if she didn't change her lifestyle — that was her wake-up call. She left her secure, government job and opened a private psychotherapy practice in her home. In the 25 years since she left her government job, Sarah hasn't regretted her decision for even one day.

For Paul, the decision wasn't an easy one, and it took some time for him to get used to the idea of having a home-based business. Says Paul, "Initially I was hesitant about working from home. I had concerns about the image it might create and worried that I wouldn't get my work done. So when I started my own consulting firm, I opened a downtown office and hired a secretary." As time went on, Paul spent less time at his downtown office, and more time working at home. Eventually, he decided to close the downtown office altogether, and invited his secretary to join him in his home office.

At first Paul and Sarah's businesses were separate, but in 1980 they decided to write a book about working at home. They wished such a book had existed for them when they got started, and more and more people were asking them how they did it, indicating they wanted to work at home, too. That book, Working From Home, is now in its fifth edition, and they've written nine others. For excerpts from those books, as well as daily messages, tips, and support, visit their Web site at http://www.paulandsarah.com.

What Is a Home-Based Business?

A home-based business is, not surprisingly, a business based in your home. Whether you do all the work in your home or on customers' or third-party premises; whether you run a franchise, a direct-sales operation, or a business opportunity (described in this section); if the center of your operations is based in your home, it's a home-based business.

There are two major types of home-based businesses: businesses you start from scratch and businesses you can buy. This latter category of home-based business is further split into three types: franchises, direct selling, and business opportunities. Whether you prefer to march to your own drummer or get a business-in-a-box depends on your personal preferences: whether you like to create systems (or follow those of others) and how much structure you like.

TIP

The advantage of a business you start from scratch is that it can be molded to your preferences and existing and emerging markets, and thus provides a boundless variety of possibilities. Businesses started from scratch account for the majority of viable, full-time businesses — in other words, they tend to be more successful over the long run than businesses you can buy. (In their book Finding Your Perfect Work, Paul and Sarah provide an appendix with characteristics of over 1,500 self-employment careers with hundreds of examples in the book of unique businesses that people have carved out for themselves.)

Each type of home business that you can buy, on the other hand, has its own spin. Here are examples of the three different types:

* Franchise: A franchise is an agreement in which one business grants another business the right to distribute its products or services. Some common home-based franchises include the following:

· American Leak Detection (water/gas leak detection)

· Merry Maids (cleaning service)

· Kinderdance International (teaching dance to preschoolers)

· Pet-Tenders (pet sitting)

· ServiceMaster (cleaning service)

· Terminix Termite and Pest Control (pest control)

* Direct selling: Direct selling involves selling consumer products or services in a person-to-person manner, away from a fixed retail location. You can find two main types of direct-selling opportunities:

· Single-level marketing: Single-level marketing is making money by buying products from a parent company, and then selling those products directly to customers.

· Multi-level marketing: Multi-level marketing involves making money through single-level marketing and by sponsoring new direct sellers.

Some common home-based direct-selling opportunities include the following:

· Amway Corporation (household cleaning products)

· Discovery Toys, Inc. (toys)

· Longaberger Company (baskets)

· Mary Kay, Inc. (cosmetics)

· Nikken, Inc. (wellness technology)

* Business opportunities: An idea, product, system, or service that someone else has developed and offers to sell to others to help them start their own similar business. (One way to think of a business opportunity is that it's any business concept you can buy from someone else that's not direct-selling or a franchise.) Your customers and clients pay you directly when you deliver a product or service to them. Here are several examples of business opportunities that can easily be run out of one's home:

· Balloon Wrap, Inc. (balloon gift wrap)

· Cardservice International (transaction service provider)

· Dino Jump USA, Inc. (children's amusements)

· Home Video Studio, Inc. (video studio)

· National Debt Recovery (collection service)

· Rhino Linings USA, Inc. (truck bed liners)

TRUE STORIES

Peter's personal journey to independence

When Peter graduated from Stanford University with majors in human biology and economics, he had no idea what he wanted to do for work, aside from some vague notion that he should "get into business." He worked a number of jobs, starting in the federal government as a contract negotiator, and then moving into the private sector for many years as an administrative manager before ending up back in local government. As the years wore on, working for others became less and less palatable to him, and becoming his own boss became a seductive proposition. In 1990, Peter was fortunate to be approached by his good friend Bob Nelson to write a book on the topic of negotiation. Although Peter had no real desire to write a book, a bit of gentle persuasion (and the promise of a $2,500 advance!) helped bring him around. This first book, Negotiating to Win, started him on a new career as a business writer.

In time, Peter was able to seriously consider devoting himself fully to starting a home-based business as a professional writer. In 1997, he got the kick in the pants he needed to make the move when he was told that, due to funding cuts, he would be laid off from his local government job. And although a week later his employer found additional funds and asked him to stay, he already had one foot out the door and there was no turning back.

Today, Peter runs his own home-based writing business. He works harder than he ever has before, but has the satisfaction of knowing that every bit of work he does has a direct payoff for him and his family—not some distant company owners or shareholders. He spends far more time with his wife and kids than he ever did before, and the commute to his office has been reduced from half an hour each way to about 30 seconds. Is he happy? Yes. Would he go back to working a regular nine-to-five job? Not on your life!

Do you have specific questions or comments for Peter? He'd love to hear from you. Write him at bizzwriter@stanfordalumni. org or visit his Web site at http://www. petereconomy.com.

ASK PAUL & SARAH

Should I start a billing and invoicing business?

Q: I'm considering starting a sideline billing and invoicing business. Do you consider this a viable business in view of the fact that more businesses are purchasing computer equipment and would be able to do this function themselves?

A: The issue for people who need billing and invoicing services is time, not technology. We find that this business works best when it's targeted to professionals whose success depends on billing their own time and who need an employee to do these financial and administrative tasks.

Medical billing services have been among the most popular home businesses in the '90s, but they have become saturated in some areas of the country. In addition, managed care has decreased the number of claims being filed by physicians. But opportunities for this service are opening to a wide range of other health care practitioners in addition to MDs, such as dentists, chiropractors, home nursing services, occupational therapists, optometrists, and psychotherapists.

Explore the need for such services in your community and while you're exploring, check out another alternative: medical claims assistance. Whereas billing services work with the health care professional, claims assistance professionals, often called CAPs, are hired by patients whose doctors don't file private insurance claims, to file and follow up on those claims.

Resources for finding out more about these two fields include the following:

* The National Electronic Billers Association (NEBA), 1730 South Amphlett Boulevard, Ste. 217, San Mateo, CA 94402. Phone: [phone]. Web site: http:// nebazone.com. They have a home study course and certification program.

* The Alliance of Claims Assistance Professionals, 731 South Naperville Road, Wheaton, IL 60187. Phone: [phone]. Web site: http://www.claims.org.

Interested in finding out the names of more companies and how to get in touch with them? Drop by Paul and Sarah's Web site at http: //www. paulandsarah.com or check out their book Home Businesses You Can Buy. In addition, Entrepreneur magazine (at http://www.entrepreneurmag.com) and gosmallbiz.com also have extensive information on business opportunities you can buy. You can also do a search for companies on the Web.

TIP

Check out Chapter 2 for detailed information on the many different kinds of home-based businesses!

Why Be OYO?

OYO means on your own. Should you be OYO? If so, why?

When you start a home-based business, you're leaving behind the relative comfort and security of a regular career or 9-to-5 job, and venturing out on your own. How far out you venture on your own depends on the kind of home-based business you get involved in. Many franchises provide extensive support and training, for example, and franchisees (someone like you) are able to seek advice from experienced franchisees or from the franchisor (the party selling a franchise opportunity) when and if it's necessary. This support can be invaluable if you're new to the world of home-based business.

At the other end of the spectrum, some business opportunities offer little or no support whatsoever. If you're a dealer in synthetic motor oil, for example, you may be lucky to get the huge, multinational conglomerate that manufactures the oil to return your calls, much less send you some product brochures. Training or extensive, hands-on support if you run into the inevitable snags? Nope — that's not going to happen.

REMEMBER

Admittedly, starting a home-based business isn't for everyone. In fact, for some individuals, it can be a big mistake. If, however, you have an entrepreneurial spirit and you thrive on being independent and being in charge of your life, a home-based business may be just the thing for you.

Give the idea of being on your own serious consideration for the following reasons:

* You're the boss. For many owners of home-based businesses, just this is reason enough to justify making the move out of the 9-to-5.

* You get all the benefits of your hard work. When you make a profit, it's all yours. No one else is going to try to take it away from you (except, perhaps, the tax man — see Chapter 8).

* You have the flexibility to work when and where you want. Are you a night owl? Perhaps your most productive times don't coincide with the standard 9-to-5 work schedule that most regular businesses require their employees to adhere to. And you may find that — because interruptions from co-workers are no longer an issue and the days of endless meetings are left far behind — you're much more productive working in your workshop than in a regular office. With your own home-based business, you're the one who decides when and where you work.

* You get to choose your clients and customers. While the customer may always be right, that doesn't mean that you have to put up with customers who mistreat you or give you more headaches than they're worth. When you own your own business, you can fire the clients you don't want to work with. Sounds like fun, doesn't it? (Believe us, it is!)

* You can put as much or as little time into your business as you like. Do you only want to work for a few hours a day or week? No problem. Ready for a full-time schedule or even more? Great! The more effort you put into your business, the more money you can make. You get to decide how much money you want to make, and then you can work the kind of schedule that will help you meet your goal.

These reasons to be on your own are just the tip of the iceberg. When you add it all up, you're left with one fundamental reason for owning your own home-based business: freedom.

REMEMBER

You have only one life to live. If you're tired of working for someone else, being second-guessed by your boss, or having your creativity stifled; if you're full of great ideas — ideas you know will lead you to success if you have the opportunity to put them into practice; if you long for something better, we have a message for you: There is something better. It's called a home-based business. And when you find the business that's right for you, it can change your life and the lives of those around you.

(Continues...)

Table of Contents

Introduction.

Part I: Beginning at the Beginning.

Chapter 1: What You Need to Know about Home-Based Businesses.

Chapter 2: Mirror, Mirror on the Wall, What’s the Best Business of All?

Chapter 3: The ABCs of Starting Your Own Business.

Chapter 4: Marketing 101: Attracting Customers.

Chapter 5: Creating a Sustainable Income in Challenging Times.

Part II: Managing Your Money.

Chapter 6: Keeping Track of Your Money.

Chapter 7: The Price Is Right: Deciding How Much to Charge.

Chapter 8: Getting Health Insurance and Planning for Your Retirement.

Chapter 9: Getting a Grip on Taxes and Deductions.

Part III: Avoiding Problems.

Chapter 10: Knowing Your Legal Do’s and Don’ts.

Chapter 11: Using Outside Resources and Experts.

Chapter 12: Eluding Scams, Rip-Offs, and Other Headaches.

Part IV: Making It Work: Moving Ahead.

Chapter 13: Making the Web Work for You.

Chapter 14: Balancing Your Business and Your Life.

Chapter 15: Growing Your Business in Good Times and Bad.

Part V: The Part of Tens.

Chapter 16: Ten Tips for How to Succeed in Your Home-Based Business.

Chapter 17: Ten Enduring Home Business Opportunities.

Chapter 18: Ten Things to Do When Times Are Tough.

Index.