Wednesday, January 21, 2009

Can I run my business from home?

Going to work used to mean traveling from home to a plant, store or office. Today many people do some or all of their work at home. Garages, basements and attics are being transformed into corporate headquarters of the newest entrepreneurs – the home-based business person.

Before diving headfirst into a home-based business, you must know why you are doing it. To succeed, your business must be based on something greater than your desire to be your own boss. You must plan and make adjustments along the road.

Ask yourself these questions and remember, there are no best or right reasons for starting a home-based business. But it is important to understand what the venture involves. Working under the same roof where your family lives may not prove to be as easy as it seems. It’s important to work in a professional environment. One suggestion is to set up a separate office in your home to create this professional environment. So, before rushing in to it, ask yourself:
· Can I switch from home responsibilities to business work?
· Do I have the self-discipline to maintain schedules?
· Can I deal with the isolation of working from home?
· Am I a self-starter?
· Does my home have space for a business?
· Can I identify and describe the business I want to establish?
· Can I identify my business product or service?
· Is there a demand for that product or service?
· Can I successfully run the business from home?

A home-based business is subject to many of the same laws and regulations affecting other businesses. Some general areas include:
· Zoning regulations. If your business operates in violation of them, you could be fined or shut down.
· Product restrictions. Certain products cannot be produced in the home. Most states outlaw 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.

Be sure to consult an attorney and your state’s department of labor to find out which laws and regulations will affect your business. Additionally, check on registration and accounting requirements needed to open your home-based business. You may need a work certificate or license from your state and your business name may need to be registered. For home-based businesses, a separate business telephone and bank account are normally required.

Also remember, if you have employees you are responsible for withholding income and social-security taxes, and for complying with minimum wage and employee health and safety laws.

If you are convinced that working from home is for you, it’s time to create your business plan. SCORE and its cadre of counselors are ready to help you. Call today for free counseling.


Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, January 6, 2009

Wjy worry about competition?

Not too many years ago, if your products or services were unique and there was no competition within a 15 or 20 mile radius, you were able to maintain a very profitable business. As shopping center after shopping center opened, cyber retailing exploded, and franchising expanded, it became more difficult to maintain your exclusivity within a geographical area. However, if I trust in the merits of my product or services to be successful, why should I care about the competition?

Very few businesses operate in isolation without market competition. Direct and non-direct competitors are trying to convince customers to buy their products or services rather than yours. There may also be indirect factors impacting customer choice. It is in your best interest to attempt to learn more about the companies that are trying to reduce your take-home pay. Knowing the competition enables you to get a competitive advantage.

List the strengths and weaknesses of each of your competitors. Talk to friends, visit your competition, call for information about their products or services, and analyze how they advertise.

Next, take a sheet of paper and list each of the major competitors and give each a rating of 1-10, for product or service quality, process, advertising, and customer satisfaction. You can add other ratings that you feel are important.

You can now use the competitive analysis to make decisions relevant to your strategic marketing plan (an integral part of your business plan). Your marketing plan will guide you toward the right decisions in the areas of pricing and advertising. It will also help you to increase your company’s customer satisfaction rate (which usually shows up as a weakness in many firms). Finally, it can help you make the right decision in customer and product segmentation.

In summary, it is impossible to produce a realistic marketing and business plan without knowing your competition.

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties