Start a Home-Based Business

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Many dream of starting their own business to gain flexibility with family and independence from the corporate structure and politics. Today, it’s also a financial savings when you’re not forking over a fortune to fill the gas tank, buying an expensive wardrobe or paying those high day-care expenses. However, before jumping headfirst into starting a business, it’s important to take a reality check and answer a few questions honestly.

• Being your own boss takes a lot of discipline. Even though your goal may be to gain flexibility, that might not happen immediately, due to the number of hours required to get the business off the ground combined with the fact that there may be insufficient income to outsource or bring on staff. So ask yourself: Are you able and willing to put in the countless hours it takes to get a business off the ground?
• Also, can you afford to lose your current salary and put out extra money for the initial startup costs? It could be one to three years before you start to make a positive return and months before you make any income at all. In addition, if you have health benefits in your current position, do you have another means of obtaining insurance on your own or are you covered by your spouse?
• One solution is to work full- or part-time while you start your business. Once you begin bringing in regular income, you can cut back your hours or leave your job.
• Here’s another question to ask yourself: Do you have a support network to help you get through the low times? Be warned: There will be many. Your network would include your immediate family and/or a group of other entrepreneurs who have experience walking the same path.

Before getting too deeply into the start of your business, check with your insurance agent to see whether you’re covered under your homeowner’s policy. It might exclude you from having business traffic in your home. Also check with your homeowners association, which may exclude operating a business out of your home. These two factors could end your decision to start a home based business before you invest any more time or money.

Working for oneself and having the ability to do it from home is a fabulous opportunity for the right person, but not everyone is cut out for it. The most important question to ask yourself is whether you truly love your business idea. If you’re doing it because you think it’s a good business idea but you don’t love what you’re doing, it will end up being a miserable endeavor because it will be all-consuming, and you may struggle to make it successful.

Setting Up Your Home-Business

Two out of three companies (of all sizes) begin in a spare bedroom,garage, basement or sometimes even a bathroom. That’s how companies as diverse as Apple Computer, Baskin-Robbins ice cream, Hallmark cards and Mark Shuttleworth’s Internet security company, Thawte Consulting,began. Of course, the Internet makes operating a virtual company fromhome more feasible and popular than ever.

If you want to hang your shingle at home, either permanently or temporarily, here are some things you must consider:

1. Firstly, is it legal to hang your shingle or sign at home? This is one of the many possible restrictions on your being allowed to make your home a working castle. Whether and how flexibly you can operate a business from your home is covered in local zoning ordinances and also by the codes and restrictions of body corporates, home owner associations and the like.
2. How are you going to separate your home and your workplace? While the demanding hours required to start any business affect an entrepreneur’s family, when you bring the workplace into the home, your family’s needs must be taken into account even more.
3. How are you going to establish and maintain a professional image?This is especially important if your address is on Cow Path Lane, your dog loves to bark or your teenager loves to play his drums in the room next to your home office.

Most cities have zoning ordinances that limit, to a degree, whether you can operate a business from home. While many communities have modernised their zoning ordinances to recognise that a computer-based business isn’t like a noisy auto body repair shop, an odorous hair salon or a 6am gathering point for a construction or cleaning crew,many communities ban certain kinds of businesses and prescribe limitations that may limit some businesses. Here are some common activities communities don’t like and may restrict within their zoning code:

• Increased vehicular traffic, both moving and parked on the street
• Prominent signs
• Employees not related to you who are working in your home
• Use of the home more for business than as a residence (determined by the percentage of space used for the business)
• Selling retail goods to the public – sometimes communities limit this to specific hours
• Storing dangerous amounts or kinds of materials inside or outside your home

So, if you’re planning to launch your business from home, the first thing to do is to check out what commercial activity your city allows in your neighbourhood.  While many people blithely ignore zoning, a complaining neighbour can put a real kink in your business plan, as you may find yourself with a cease and desist order and have to suddenly move or close down. So find out what you’re allowed to do, and get along with your neighbours.

With their support, you may be able to get a waiver of restrictions, called a variance or conditional-use permit. Since most people who operate a home business have a family, keeping personal and work spaces separate is critical to peaceful domestic relations. So location is the first thing to think about when you’re planning where your home office will be. If you can have your office in a separate structure, like a garage or a guest house in the backyard,you probably need to think no further.

But since the typical home-based business is located inside a home, you need to consider noise and family traffic patterns when deciding whereto put your office. Of course, if you’re locating your business at home so you can care for your children, you may choose to compromise privacy for a vantage point that will enable you to see or hear what your children are doing while you work.

If you have customers coming to your home, locating your office where it can have a separate entrance or be close to an entrance to your home can save you time and trouble. If business visitors must walk through your home to get to your office, it’s important to keep personal areas of your home neat and uncluttered by personal items like laundry and children’s toys. About half of home offices are located in a spare bedroom, which hopefully has a relatively soundproof door.

The negative connotation implied by referring to home-based businesses as a “cottage industry” is disappearing. Still, presenting a professional image can be a challenge if your four-year-old answers your phone or your clients are confronted with piles of laundry on the way through the house to your office. Here are some things you can do to let people know you’re serious about your business:

Have a separate phone line for your business

While your second line can be a residential line, opting for a business line will enable you to have one and sometimes two Yellow Pages listings. This will enable people to call directory assistance or use Internet-based Yellow Pages to find your business by name. These benefits can easily justify the additional cost of a business line.Also, locate your business phone away from household noise.

Answer your phone in a formal and professional manner

If other family members answer your business line, make sure they do the same, including using your company name. While you can use voice mail, like nearly every corporation does today, one way of gaining a competitive edge is to actually answer your phone or have someone answer it for you. Customers and prospective customers tend to prefer talking with a live human being rather than dealing with voice mail.

Use voice mail to capture calls when you’re away

Better yet, to give your callers a sense of more personal service,consider going a step beyond and using one of the personal communications assistant technologies like Oryx. These services provide callers with more choices and can help them locate you quickly if needed.

Take care that your paper collaterals have a consistent, quality look

While you can certainly design your own letterhead, envelopes, business cards, brochures and invoice statements, if you don’t have a visual sense – and not everyone does, consider using a professional to do your design work. You can either have the final product professionally printed, or you can print items as you need them on your own printer.Try co-ordinating your materials with your website for an even snazzier look.

Make sure your business address is professional

If your home’s street address is something like Lazy Daisy Road, it’s a good idea not to use it as the address where business mail and packages are delivered. We recommend using street addresses from a business district: you can rent from a mail-receiving service or an office suite complex. (If you do that, be sure your city doesn’t make a physical inspection of the business premises before granting a city business licence.) PO Box addresses tend to make clients distrustful, and you can’t receive FedEx deliveries at a PO Box.

Find alternative care for your kids

While many parents do care for their children while working, you can’t expect to work at 100 percent efficiency with children underfoot, so consider other options. The most common ones are getting help from relatives, using outside daycare services, or hiring domestic help to care for children while you’re working.

Another less-used but creative solution is setting up a co-operative daycare arrangement with four or five other parents who work from home and taking turns caring for the children. You may only be able to work four days a week, but in those four days, you can be more productive than you would be in five days with your children competing for your attention.

Set up meetings off site

Do so if you live in an inconvenient location or simply don’t have enough space to meet with customers or clients in your home office. You could either meet at your customer’s location or at a neutral spot like a restaurant.

Dress professionally

How you dress while you work at home affects how you feel about your work and the image you project. While many people working in traditional offices dress informally on the job, you may find it helpful not to dress too casually. While it may be fine to work in pyjamas, chances are they’re not the best choice for all-day wear.

About the Author

Entrepreneur Magazine, South Africa.