Home-Based Business For Dummies E-Book

Paul Edwards

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2009

Seitenzahl: 650

Beschreibung

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.

Leseprobe

Home-Based Business For Dummies®, 3rd Edition

Table of Contents

Introduction

About This Book

Conventions Used in This Book

What You’re Not to Read

Foolish Assumptions

How This Book Is Organized

Part I: Beginning at the Beginning

Part II: Managing Your Money

Part III: Avoiding Problems

Part IV: Making It Work: Moving Ahead

Part V: The Part of Tens

Icons Used in This Book

Where to Go from Here

Part I: Beginning at the Beginning

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

Looking at the Basics of Home-Based Business

Determining the kind of business you want to have

Managing your money

Avoiding problems

Moving ahead

Leaving your full-time job for your part-time business

Examining the Good News and the Bad

Good reasons to start a home-based business

The pitfalls of owning your own home-based businesses

Taking the Home-Based Business Quiz

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

Starting Something from Scratch

Doing what you’ve been doing in a job

Doing something new and different

Buying a Business

Home-based franchises

Direct-selling opportunities

Business opportunities

Identifying Which Option Is Best for You

Finding Your Niche by Specializing

Chapter 3: The ABCs of Starting Your Own Business

Transitioning into Your Home-Based Business

Knowing what to do before leaving your day job

Understanding what you have to do to start your own home-based business

Six Ways to Get the Cash Flowing

Figuring Out Where to Get Your Startup Funds

Putting Together a Business Plan

Chapter 4: Marketing 101: Attracting Customers

Identifying Your Best Customers

Tapping In to Your Customers’ Needs

Understanding the WPWPF principle

Carving out a niche

Marketing: Taking Different Roads to Meet Your Goals

Generating word of mouth

Acquiring referrals

Making use of public relations

Taking advantage of direct marketing

Investing in advertising

Going tech with Web sites, blogs, and e-commerce

Developing a Marketing Plan — Now!

Part 1: Overview

Part 2: Marketing objectives

Part 3: Situation analysis

Part 4: Marketing strategies

Part 5: Financials

Chapter 5: Creating a Sustainable Income in Challenging Times

Recognizing that People Behave Differently in Bad Times

Identifying Businesses That Work Well in a Down Economy

Assuring affordable energy

Helping others reduce and reuse

Fulfilling day-to-day business needs

Meeting healthcare needs

Providing alternative-living services

Selling affordable luxuries

Creating a Business That Can Ride the Economic Waves

Choosing to serve nondiscretionary needs

Cushioning yourself locally and virtually

Crowdsourcing locally and virtually

Telescoping your niche

Trading time and goods when currency is short

Saving money and keeping your overhead down

Businesses Best Suited for an Improving Economy

Offering services to other businesses

Appealing to clients who have money to spare

Part II: Managing Your Money

Chapter 6: Keeping Track of Your Money

Organizing Your Finances

Setting Up a Business Account

Accepting Credit Card Sales

Knowing the costs of credit card transactions

Establishing a merchant account

Obtaining credit reports

Using the PayPal option

Choosing the Best Bookkeeping System for Your Business

Balancing check registers and bank statements

Analyzing the two most important financial statements

Happiness Is a Positive Cash Flow

Treating cash as king

Kick-starting your cash flow

Understanding collections

Getting a Loan

Discovering different kinds of credit

Getting the loan you want

Fixing your bad credit history

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

Figuring Out What Your Prices Must Cover

Paying salaries

Establishing your overhead

Incurring direct costs

Striving for profit

Sizing Up Your Potential Customers and How Much They’ll Pay

Researching Your Competition

Pricing Strategies That Deliver Sales

Creating value for your clients

Setting your prices: Five approaches

Changing your prices

Deciding whether to discount

Taking a stand on prices

Chapter 8: Getting Health Insurance and Planning for Your Retirement

Providing Your Own Benefits

Choosing Your Healthcare Coverage

Exploring the spectrum of healthcare coverage

Looking at fee-for-service and indemnity healthcare plans

Checking out managed care plans

Investigating other healthcare coverage

Considering the Need for Other Benefits

Income protection

Life insurance

Retirement and savings plans

Time off

Child care

Chapter 9: Getting a Grip on Taxes and Deductions

Knowing Which Taxes to Pay — and When to Pay Them

Who has to pay what?

When do you have to pay?

How much do you have to pay?

What if you can’t afford to pay right now?

When is an independent contractor not an independent contractor?

Taking a Look at the Home-Office Deduction

Reviewing Other Important Tax Deductions

Discovering Often Overlooked Ways to Save On Your Taxes

The Ins and Outs of Sales Tax

Part III: Avoiding Problems

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

Understanding the Major Business Forms

Surveying sole proprietorships

Perusing partnerships

Looking at limited liability companies

Checking out corporations

Figuring Out What to Call Your Business: Name Registration

Differentiating between Trademarks, Copyrights, and Patents

Trademarks

Copyrights

Patents

Determining the Need for Zoning, Licensing, and Permits

Zoning

Licensing and permits

Scrutinizing Your Tax Requirements

Chapter 11: Using Outside Resources and Experts

Establishing Trade Accounts

Using Support Services

Finding Good Lawyers, Accountants, and Other Professionals

Hiring the right lawyers

Picking good accountants

Banking on the best bankers

Consulting business consultants

Working with insurance agents and brokers

Cashing In on Barter

Taking advantage of bartering

Bartering in action

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

Investigating the Psychology of Scams

Sniffing Out Scams

Job-at-home red flags

Business opportunity red flags

Franchise red flags

Direct-selling and multi-level marketing red flags

Finally, Be Wary of . . .

Places to Check

What to Do If You’ve Been Scammed

Part IV: Making It Work: Moving Ahead

Chapter 13: Making the Web Work for You

Bidding for Work Online

Taking advantage of sites that bring buyers and sellers together

Figuring out how to win bids

Keeping clients and building your business with them

Getting Listed in Directories

Online business directories

Association memberships

Local directories and review sites

Networking the Internet Way

Discovering the benefits of online forums

Souping up your social networking

Making winning relationships the right way

Building and Maintaining a Blog or Web Site

Hiring someone to create and maintain your blog or Web site

Creating a blog or Web site yourself

Skipping the blog or Web site and creating an e-commerce site

Making your site good regardless of who creates it

Using a Blog or Web Site to Attract Customers and Clients

Knowing what it takes to get traffic

Making it easy for visitors to become customers

Chapter 14: Balancing Your Business and Your Life

Starting with a Serious Business Attitude

Building success from the inside

Counting on the outside for help, too

Separating Your Work from Your Personal Life

Avoiding Interruptions and Distractions

Dealing with interruptions

Dealing with distractions

Managing Your Time

Letting routines rule

What’s a priority, and what isn’t?

Teaming Up with a Spouse or Other Loved One

Knowing when to team up

Figuring out how to team up

Building a healthy, long-term relationship

Chapter 15: Growing Your Business in Good Times and Bad

Becoming a Success

Identifying the Upside and Downside of Growth

Understanding why you may want to grow

Recognizing the many different ways to grow

Begging the question: To grow or not to grow?

Bringing In Partners

Cashing Out and Other Exit Strategies

Putting a value on your business

Now what?

Part V: The Part of Tens

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

Do What You Love

Treat Your Business like a Business

Become an Expert

Don’t Be Shy

Charge What You’re Worth

Avoid Unnecessary Expenses

Manage Your Cash Flow

Keep Your Day Job

Build a Solid Customer Base

Ask for Referrals

Chapter 17: Ten Enduring Home Business Opportunities

Architectural Salvage

Cleaning Services

Collections Work

Community Management

Elder Services and Home Care

Investigative and Security Services

Microfarming

Repair and Restoration Services

Robot Repair

Tutoring and Adult Education

Chapter 18: Ten Things to Do When Times Are Tough

Save for a Rainy Day

Manage Your Cash Flow

Keep in Touch with Your Customers

Push Your Clients to Pay Their Bills

Minimize Expenses

Offer a Special Promotion

Subcontract for Others

Volunteer

Moonlight

Refuse to Give Up!

Home-Based Business For Dummies®, 3rd Edition

Paul and Sarah Edwardsand Peter Economy

Home-Based Business For Dummies®, 3rd Edition

Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.com

Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana

Published simultaneously in Canada

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About the Authors

Paul and Sarah Edwards are award-winning authors of 17 books with over two million books in print. Sarah, a licensed clinical social worker with a PhD in ecopsychology, and Paul, a licensed attorney, are recognized as pioneers in the working-from-home field. With the emergence of a global economy that challenges the environment and everyone’s personal, family, and community well-being, they are focusing their efforts on finding pathways to transition to a sustainable Elm Street economy in which home business plays a vital role. Paul and Sarah write a quarterly column for The Costco Connection. They hosted The Working From Home Show on HGTV and have been regular commentators on CNBC.

Paul and Sarah provide a wealth of ongoing information, resources, and support, at www.pathwaystotransition.com.

Peter Economy, who lives in La Jolla, California, is a home-based business author, ghostwriter, and publishing consultant, and the author or coauthor of more than 50 books, including Why Aren’t You Your Own Boss? with Paul and Sarah Edwards (Three Rivers Press), Managing For Dummies, 2nd Edition, and Consulting For Dummies, 2nd Edition, with Bob Nelson (Wiley), and Writing Children’s Books For Dummies with Lisa Rojany Buccieri (Wiley). Peter is also associate editor for the Apex Award-winning magazine Leader to Leader.

Peter combines his writing experience with more than 15 years of hands-on management experience. He received his bachelor’s degree in economics from Stanford University and a postgraduate certificate in business administration from the Edinburgh Business School. Peter invites you to visit his Web site at www.petereconomy.com.

Dedication

To the millions of home-based businesspeople whose entrepreneurial spirit shines as a beacon, inspiring those around you and lighting a path to the success you so richly deserve.

Authors' Acknowledgments

We give our sincere thanks and appreciation to our Wiley publishing team: Stacy Kennedy, Natalie Harris, Amanda Langferman, and Erin Mooney. We would also like to thank our technical editor Beverley Williams for her hard work, and Jim Schneider and Russell Ingledew for their contributions to this book.

Paul and Sarah also extend their thanks to Peter Economy for his dedication to this project.

Peter thanks Paul and Sarah Edwards for the opportunity to work with them on this dynamic topic and for sharing their extensive experience and wisdom with him. Together, we rediscovered the joy of doing the work that we truly love and the power of teamwork.

Publisher’s Acknowledgments

We’re proud of this book; please send us your comments through our online registration form located at http://dummies.custhelp.com. For other comments, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax [phone].

Some of the people who helped bring this book to market include the following:

Acquisitions, Editorial, and Media Development

Project Editor: Natalie Faye Harris(Previous Editions: Mark Butler, Corbin Collins)

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Cover Photos: Creatas Images

Cartoons: Rich Tennant (www.the5thwave.com)

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Introduction

Who doesn’t dream of starting one’s own business and being one’s own boss? Increasingly, this dream is becoming more relevant to the challenges of the economy that’s emerging today. And it’s not just a pie-in-the-sky dream anymore; starting a home-based business is a reality that has created opportunity and satisfaction for many people who decided to take the plunge — just as it can for you.

Home-Based Business For Dummies, 3rd Edition, presents and explains an incredibly wide variety of information — aimed at ensuring your home-business success. Whether you need information on choosing the right business opportunity, avoiding scams, marketing your business, pricing your products and services, keeping accounts and books, understanding legal do’s and don’ts, or growing your business, you find the help you need here.

This book provides you with the very best ideas, concepts, and tools for starting and successfully operating your home business. We’ve updated the information presented in the previous edition to ensure that you have the latest and most accurate information at your fingertips. Apply this information and we’re convinced that you can create exactly the kind of business you’ve always dreamed of and find exactly the level of success you’ve always wanted.

About This Book

Home-Based Business For Dummies, 3rd Edition, is full of useful information, tips, and checklists for everyone who aspires to start a successful home-based business. Your current level of business experience (or lack thereof) doesn’t matter. Don’t worry about not having years of it under your belt or about not knowing the difference between direct selling and franchising. For a fraction of the amount you’d pay to get an MBA, this book provides you with an easily understandable road map to today’s most innovative and effective home-based business techniques and strategies.

The information you find here is firmly grounded in the real world. This book isn’t an abstract collection of theoretical mumbo-jumbo that sounds good but doesn’t work when you put it to the test. Instead, we’ve included only the best information, the best strategies, and the best techniques — the exact same ones that top business schools teach today. This book is a toolbox full of solutions to your every question and problem.

This book is also fun — it reflects our strong belief and experience that running a business doesn’t have to be a bore. We even help you maintain a sense of humor in the face of the challenges that all home-based businesspeople face from time to time — after all, we’ve been there and done that!

And one more thing: The Internet has forever changed the world of business, which includes home-based businesses. This book contains the latest information on using e-commerce, starting and operating a successful business on the Internet, and using blogs and Web sites to your advantage. It’s also chock-full of our own personal Internet bookmarks for the best home-business resources the Web has to offer.

Conventions Used in This Book

When writing this book, we included some general conventions that all For Dummies books use. We use the following:

Italics to point out any words you may not be familiar with — and remind you that definitions are somewhere nearby

Boldface to point out all keywords in bulleted lists and the actual steps in numbered lists

Monofont to point out all Web sites and e-mail addresses

When this book was printed, some Web addresses may have needed to break across two lines of text. If you come across a two-line Web address, rest assured that we haven’t put in any extra characters (such as hyphens) to indicate the break. So when you’re using one of these Web addresses, just type in exactly what you see in this book, pretending that the line break doesn’t exist.

What You’re Not to Read

Although we think every word in this book is worth your time, we know you probably don’t have time to read them all. With that understanding in mind, we make it easy for you to identify material that you can skip by placing it into sidebars. So feel free to skip the sidebars, or the gray boxes in each chapter, which contain information that’s interesting and related to the topic at hand, but not absolutely essential for the success of your home-based business.

Foolish Assumptions

While we were writing this book, we made a few assumptions about you. For example, we assume that you have at least a passing interest in starting your own business. Maybe you’ve already started a home-based business, or perhaps it’s something you may want to try. We also assume that you can produce and deliver products or services that people will be willing to pay you for. These products and services can be most anything — you’re limited only by your imagination (and your bank account). Finally, we assume that you don’t already know everything there is to know about starting your own home-based business and that you’re eager to acquire some new perspectives on the topic.

How This Book Is Organized

We’ve organized this book into five parts. The chapters within each part cover specific topic areas in detail. As a result, you can easily find the topic you’re looking for. Look in the index or table of contents for your general area of interest and then find the chapter that concerns your particular needs. Whatever the topic, odds are it’s covered somewhere in this book.

Each part addresses a major area of the hows, whats, and whys of starting your own home-based business. The following is a summary of what you find in each part.

Part I: Beginning at the Beginning

For most people, starting a home-based business is a big undertaking. But every great journey begins with some small first steps. In this part, we take a look at what you need to know about starting a home-based business and take you on a tour of the very best home-based business opportunities for both today and tomorrow. We consider the basics of starting your own home-based business and the ins and outs of effective marketing. Finally, we discuss how to create a sustainable income in challenging times.

Part II: Managing Your Money

Money is the blood that keeps any business running: It allows you to pay for your supplies, your computer, and other equipment and makes it possible for you to put something aside for a rainy day. In this part, we take a close look at keeping track of your money and deciding what prices to charge your customers. We examine how to get health insurance and plan for your retirement. We also take a look at how to use the tax laws to your advantage.

Part III: Avoiding Problems

Starting a business takes a lot more work than simply announcing to your neighborhood that you’re “in business.” You have to choose and register a business name, consider zoning regulations, and set up and equip your home office. In this part, we present the most common legal considerations for home-based businesspeople and discuss which kinds of business relationships are most important to establish and how you can establish them. Finally, we give you our best advice on avoiding scams and rip-offs.

Part IV: Making It Work: Moving Ahead

Creating a successful home-based business requires more than a good idea; you need the ability to separate your business from your personal life and to know when it’s okay to mix the two. In this part, you find out about how to make the Web work for you. And you discover tips for establishing a serious business attitude while ensuring that your business coexists peacefully with the people you share your home with. You also find out how to successfully grow your business, if you so choose.

Part V: The Part of Tens

In this concise and lively set of condensed chapters, you can find tips to help start and maintain your home-based business. We show you how to succeed in your home-based business, which home-business opportunities we project will be good well into the future despite fluctuations in the economy, and what to do when times are tough.

Icons Used in This Book

Icons are handy little graphic images that are meant to point out particularly important information about starting your own home-based business. Throughout this book, you find the following icons, conveniently located along the left margins:

This icon directs you to tips and shortcuts you can follow to make your home-based business a success.

We’ve seen some pretty interesting things while working with home-based businesses, including our own. This icon points out some of our stories.

Sometimes you need advice that goes beyond what we can provide in this book. When that’s the case, we use this icon to show you it’s time to see a professional.

Remember the important points of information that follow this icon, and your home-based business will be all the better for it.

Danger! Ignore the advice next to this icon at your own risk!

Paul and Sarah Edwards, two of the authors, provide insightful answers to a variety of home-business questions. This icon points out these tough questions and their answers.

Where to Go from Here

If you’re new to business, you may want to start at the beginning of this book and work your way through to the end. A wealth of information and practical advice awaits you. Simply turn the page and you’re on your way! If you already own and operate a home-based business and are short of time (and who isn’t short of time?), turn to a particular topic to address a specific need or question you have. Regardless of how you find your way around this book, we’re sure you’ll enjoy the journey.

Part I

Beginning at the Beginning

In this part . . .

Starting your own home-based business can be a very exciting time for you and for those around you. Before you can start on your journey, however, you need to take your first step. In this part, we tell you what you need to know about home-based businesses and delve into the questions of which business is best for you and what opportunities offer the greatest rewards. We explore the basics of starting your own business and then move on to the essentials of marketing and the most effective ways to create a sustainable income in challenging times.

Chapter 1

What You Need to Know about Home-Based Businesses

In This Chapter

Understanding the basics of home-based businesses

Taking a look at the pros and cons of having a home-based business

Congratulations! You’ve decided to start a home-based business. We welcome you as you join with millions of others who have already made the decision to start a home-based business. According to the Small Business Administration (SBA), there are more than 27 million businesses in the United States today. Of these businesses, 99.7 percent (or about 26.9 million) are small businesses (which the government defines as businesses with fewer than 500 employees). Of these, just more than half — 52 percent, or about 13.5 million — are home-based businesses. Now that’s a lot of home-based businesses!

Take it from us: Owning your own home-based business may be the most rewarding experience of your entire life — and not just in a financial sense (although many home-based businesspeople find the financial rewards to be significant). Having your own home-based business is also rewarding in the sense of doing the work you love and having control over your own life.

Of course, every great journey begins with the first step. In this chapter, we provide you with an overview of this book, taking a look at the basics of home-based business — including getting started, managing your money, avoiding problems, and moving ahead. Finally, we consider some of the good news — and the bad — about starting your own home-based business and explain how to know when it’s time to make the move.

Paul and Sarah’s journey home

Paul and Sarah began working from home before it was fashionable for anyone other than people in the construction trades, writers, artists, and craftspeople to do so. In fact, the neighbors wondered whether Paul was unemployed.

Sarah actually led the way home to set 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. Sarah said, “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, during which 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, 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. “Initially, I was hesitant about working from home,” said Paul. “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.

In 1980, Paul and Sarah decided to write a book about working at home. They wished such a book had existed for them when they got started. That book, Working from Home, is now in its fifth edition, and they’ve written 16 others. For excerpts from those books, as well as daily messages, tips, and support, visit their Web site at www.pathwaystotransition.com.

Looking at the Basics of Home-Based Business

Not surprisingly, a home-based business is a business based in your home. Whether you do all the work in your home or you do some of it on customers’ or third-party premises, whether you run a franchise, a direct-sales operation, or a business opportunity, if the center of your operations is based in your home, it’s a home-based business.

Each part of this book is dedicated to a specific aspect of starting and running your home-based business. In the following sections, we take a closer look at the topics we cover in the rest of this book.

Determining the kind of business you want to have

After you decide you’re going to start your own home-based business, you have to answer two questions: Exactly what kind of home-based business do you want to start, and what’s the best way to market your products or services?

You basically have two types of home-based businesses to choose from: businesses you start from scratch and businesses you buy. The latter category is further split into three types: franchises, direct-selling opportunities, and business opportunities. Whether you prefer to march to your own drummer and start your business from the ground up or get a business-in-a-box depends on your personal preferences.

The advantage of a business you start from scratch is that you can mold it to fit your preferences and the existing and emerging markets, which provides you with 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 (Tarcher), Paul and Sarah provide characteristics of more than 1,500 self-employment careers, along with hundreds of examples of unique businesses that people have carved out for themselves. If you have a business idea that doesn’t fit an existing category, you can get feedback on your business concept at www.conceptfeedback.com.

Each type of home business that you can buy, on the other hand, has its own spin. The following sections illustrate how the three types are different from one another.

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:

Aussie Pet Mobile (mobile pet grooming)

Jani-King (commercial cleaning service)

Jazzercise (dance/exercise classes)

ServiceMaster Clean (cleaning service)

Snap-On Tools (professional tools and equipment)

Direct selling

Direct selling involves selling consumer products or services in a person-to-person manner, away from a fixed retail location. The two main types of direct-selling opportunities are

Single-level marketing: Making money by buying products from a parent company and then selling those products directly to customers

Multi-level marketing: Making money through single-level marketing and by sponsoring new direct sellers

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

Shaklee (household cleaning products)

The Pampered Chef (kitchen tools)

Green Irene (green products and consulting)

Longaberger Company (baskets)

Mary Kay, Inc. (cosmetics)

Fuller Brush Company (household and personal-care products)

Business opportunity

A business opportunity is an idea, product, system, or service that someone develops and offers to sell to others to help them start their own, similar businesses. With a business opportunity, your customers and clients pay you directly when you deliver a product or service to them. (Another way to think of a business opportunity is that it’s any business concept you can buy from someone else that isn’t direct selling or franchising.) Here are several examples of business opportunities that you can easily run out of your home:

Astro Events of America (inflatable party rentals)

Debt Zero LLC (debt settlement)

ClosetMaid (storage and organizational products)

Vendstar (bulk-candy vending machines)

Interested in how to find more companies and how to get in touch with them? Entrepreneur Media (www.entrepreneur.com) and www.gosmallbiz.com have extensive information on business opportunities you can buy. You can also do a search on Google (www.google.com), using the keywords business opportunity.

After you decide on a business, you have to find the money to get it started. Then you have to market your products or services and persuade people to buy them. You can choose conventional methods of promotion, such as advertising and public relations, or you can leverage new selling opportunities, such as the Internet, to your advantage. Or you can (and probably should) do both. It’s your choice — you’re the boss! Check out the rest of Part I for more information on choosing and marketing your business and on creating a sustainable income in challenging times.

Managing your money

Money makes the world go ’round, and because we’re talking about your financial well-being here, it’s very important that you have a handle on your business finances. To get the handle you need, do the following:

Find the money you need to start your business. The good news is that many home-based businesses require little or no money to start up. If you decide to buy a franchise or business opportunity from someone else, however, you definitely need some amount of startup funding. To find this funding, consider all your options, including friends and family, savings, credit cards, bank loans, and more.

Keep track of your money. In most cases, keeping track of your money means using a simple accounting or bookkeeping software package, such as QuickBooks, Quicken, or Microsoft Office Accounting, to organize and monitor your business finances.

Set the right price for your products and services. If you set your prices too high, you’ll scare customers away; if you set them too low, you’ll be swamped with customers, but you won’t make enough money to stay afloat. Be sure to charge enough to cover your costs while generating a healthy profit.

Obtain health insurance, and plan for your retirement. When you have your own business, you’re the one who needs to arrange for health insurance and set up IRAs, 401(k)s, or other retirement plans for the day when you’re ready to hang up your business and fade away into the sunset.

Pay taxes. As someone famous once said, “The only things you can count on in life are death and taxes.” Well, taxes are a definite, so make sure you pay all the taxes you owe for your home-based business.

Check out Part II of this book for a lot more information on managing your money.

Avoiding problems

Eventually, every business — home based or not — runs into problems. Whether the problems are being late on a delivery or hitting a snag with the Internal Revenue Service, as the owner of your own business, you need to avoid problems whenever possible and deal with them quickly and decisively when you can’t avoid them. Some of the problems you may deal with include the following:

Legal issues: After a good accountant, the next best friend of any business owner is a good attorney. Keep one handy to help you deal with legal issues when they inevitably arise.

Issues with support services: Finding skilled and reliable outside support services — lawyers, accountants, bankers, business consultants, and insurance brokers — isn’t necessarily an easy task, especially if your business is in a small town where you’re pretty much stuck with what’s down the road.

Scams and rip-offs: More and more home-based business scams seem to appear every day, so don’t rush into any business opportunity. Take your time and fully explore every opportunity before you sign on the dotted line. And remember, if it looks too good to be true, it probably is!

Move on to Part III to find out more about how to avoid problems in your home-based business.

Moving ahead

One of the best things about owning your own business is watching it develop, mature, and grow. After all, a growing business is the gift that keeps on giving — all year ’round, year after year. To keep your business moving ahead, consider doing the following:

Make the Web work for you. Doing business and generating sales and interest in your business via the Internet is practically a given for any home-based business today. You can make the Web work for you in any number of ways, from starting a blog or Web site to networking with others through online forums or social networking sites, such as Twitter, Facebook, and LinkedIn.

Maintain a serious business attitude. Just because your business is located at home instead of in a big office building downtown doesn’t mean you shouldn’t treat it like the business it is. While you can have fun and work all kinds of creative schedules, don’t forget that the business part of your business is important, too; you have to treat your business like a business if you hope to be successful.

Look for ways to grow. For many businesses, growth can turn an operation that is doing well financially into an operation that is doing great! Growth allows you to take advantage of economies of scale that may be available only to larger businesses, to serve more customers, and to increase profits. For these reasons and more, growing your business should always be on your agenda.

To discover in-depth information on these particular topics and more, check out Part IV sooner rather than later.

Making the 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 time 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 (Scott Foresman),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, thanks 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. But although he works harder than ever, he also gets to spend 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 9-to-5 job? Not on your life!

Do you have specific questions or comments for Peter? He’d love to hear from you. Visit his Web site at www.petereconomy.com and drop him a line.

Leaving your full-time job for your part-time business

An important, basic consideration that many home-based business owners face is whether or not to leave a full-time job in favor of a home-based business. Before you give up your full-time job, ask yourself these questions:

Has there been a steadily growing flow of new customers in your home-based business?

Has your business, even though it’s only been part-time, produced a steady flow of income through seasonal or other cycles typical of the business?

Are you turning away business because of limits on your time? If not, do you think business would increase if you had the time to market or take on more customers?

Being able to answer at least two of these questions in the affirmative is a good sign that it would be safe to leave your full-time job. Of course, you should also be aware of any developments that could worsen the outlook for your business to grow, such as pending legislation, new technology, the movement of the kind of work you do outside the United States (outsourcing or cloud computing), or the decline of an industry your business depends on.

If your day job has been providing you the contacts you’ve needed to build your part-time business, you need to find ways to replace them before you leave your job.

Breaking the umbilical cord of a paycheck is an uncomfortable step for most people. So the closer the current income from your business is to the amount of money you need to pay your basic business and living expenses, the more confident you can be.

Examining the Good News and the Bad

Anyone can start a home-based business. You can be 10 years old or 100, male or female, rich or poor or somewhere in between, experienced in business — or not. According to a recent study by the Ewing Marion Kauffman Foundation, the median age of company founders is 40 years old, the majority (69.9 percent) were married when they started their first business, and more than half (51.9 percent) were the first in their families to start a business.

So how do you know if starting a home-based business is right for you? Like most things in life, starting your own home-based business has both advantages and disadvantages, but the good news is that the advantages probably outweigh the disadvantages for most prospective home-business owners. So in the spirit of putting your best foot forward, we start with the good news.

Good reasons to start a home-based business

When you start a home-based business, you may be leaving behind the relative comfort and security of a regular career or 9-to-5 job and venturing out on your own. Or you may be entering the world of work again after devoting many years of your life to raising a family. How far out you venture on your own depends on the kind of home-based business you get involved in. For example, many franchises provide extensive support and training, and franchisees (the people buying the franchise opportunities — you, for example) are able to seek advice from experienced franchisees or from the franchisor (the party selling a franchise opportunity) when they need it. 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 have trouble getting the huge, multinational conglomerate that manufactures the oil to return your calls, much less send you some product brochures. And you won’t find any training or extensive, hands-on support if you run into the inevitable snags, either.

This wide variety of home-based opportunities brings us to the good news about starting and running your own home-based business:

You’re the boss. For many owners of home-based businesses, just being their own boss is reason enough to justify making the move out of the 9-to-5 work world.

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 9).

You have the flexibility to work when and where you want. Are you a night owl (like Peter, who wrote these words at 4:58 a.m.)? 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 own workshop than in a regular office. With your own home-based business, you get to decide when and where you work.

You get to choose your clients and customers. The customers may always be right, but that doesn’t mean you have to put up with the ones 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 want to. Do you want to work for only 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. As a home-based business owner, you get to decide how much money you want to make and then pick out the kind of schedule that will help you meet your goal.

These reasons to start your own home business are just the tip of the iceberg. But when you add up everything, you’re left with one fundamental reason for owning your own home-based business: freedom.

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 in charge of your life, a home-based business may be just the thing for you.

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), or if you long for something better, we have a message for you: There is something better. It’s called a home-based business. When you find the business that’s right for you, it can change your life and the lives of those around you.

The pitfalls of owning your own home-based businesses

Starting a home-based business isn’t the solution to every problem for every person. Although many home-based businesses are successful and the people who started them are happy with the results, more than a few home-based businesses end up causing far more headaches than their owners anticipated. Some home-based business owners even go bankrupt as a direct result of the failure of their businesses. Starting your own business is hard work, and there are no guarantees for its success.

So the next time you’re lying on your sofa, dreaming of starting your own home-based business, don’t forget to consider some of the potential pitfalls:

The business is in your home. Depending on your domestic situation, working in your own home — a home filled with any number of distractions, including busy children, whining spouses or significant others, televisions, loaded refrigerators, and more — can be a difficult proposition at best.

You’re the boss. Yes, being the boss has its drawbacks, too. When you’re the boss, you’re the one who has to motivate yourself to work hard every day — no one’s standing over your shoulder (except maybe your cat) watching your every move. For some people, focusing on work is very difficult when they are put in the position of being the boss.

Health insurance may be unavailable or unaffordable. If you’ve ever been without health insurance for a period of time, or if you’ve been underinsured and had to make large medical or dental payments, you know just how important affordable health insurance is to your health and financial well-being. According to a recent study, 62.1 percent of all bankruptcies are medical related, and 92 percent of these debtors had medical debts of more than $5,000. Unfortunately, when you work for yourself, finding good health insurance isn’t a given. In fact, it can sometimes be downright difficult, depending on where you live and work. (Find out about the different health insurance options available to home-based business owners in Chapter 8.)

A home-based business is (usually) a very small business. As a small business, you’re likely more exposed to the ups and downs of fickle customers than larger businesses are. And a customer’s decision not to pay could be devastating to you and your business.

You may fail or not like it. No one can guarantee that your business is going to be a success or that you’re going to like the business you start. Failure may cost you dearly, including financial ruin (no small number of business owners have had to declare bankruptcy when their businesses failed), destruction of personal relationships, and worse. However, not all small businesses close because of financial problems. The Small Business Administration has found that at the time of closing, one out of three businesses is financially sound.

Regardless of these potential pitfalls, starting a home-based business remains the avenue of choice for an increasing number of people. Are you ready to join them?

Taking the Home-Based Business Quiz

Many people talk about starting home-based businesses, and many dream about becoming their own bosses. Making the transition from a full-time career to self-employment, however, is a big change in anyone’s life. Are you really ready to make the move, or should you put the idea of having your own home-based business on the back burner for a while longer?

To help you decide, take the following home-based business quiz. Circle your answer to each of these questions, add up the results, and find out if you’re ready to take the plunge!

1. How strong is your drive to succeed in your own home-based business?

A. I can and will be a success. Period.

B. I’m fairly confident that if I put my mind to it, I will succeed.

C. I’m not sure. Let me think about it for a while.

D. Did I say that I wanted to start my own business? Are you sure that was me?

2. Are you ready to work as hard as or harder than you have ever worked before?

A. You bet — I’m ready to do whatever it takes to succeed!

B. Sure, I don’t mind working hard as long as I get something out of it.

C. Okay, as long as I still get weekends and evenings off.

D. What? You mean I’ll still have to work after I start my own business? Isn’t that why I hire employees?

3. Do you like the idea of controlling your own work instead of having someone else control it for you?

A. I don’t want anyone controlling my work but me!

B. That’s certainly my first choice.

C. It sounds like an interesting idea — can I?

D. Do I have to control my own work? Can’t someone control it for me?

4. Have you developed a strong network of potential customers?

A. Yes, here are their names and numbers.

B. Yes, I have some pretty strong leads.

C. Not yet, but I’ve started kicking around some ideas with potential customers.

D. I’m sure that as soon as I let people know that I’m starting my own business, customers will line up.

5. Do you have a plan for making the transition into your home-based business?

A. Here it is — would you like to read the executive summary or the full plan?

B. Yes, I’ve spent a lot of time considering my options and making plans.

C. I’m just getting started.

D. I don’t believe in plans — they crimp my style.

6. Do you have enough money saved to tide you over while you get your business off the ground?

A. Will the year’s salary that I have saved be enough?

B. I have six months’ expenses hidden away for a rainy day.

C. I have three months’ worth.

D. I’m still trying to pay off my college student loans.

7. How strong is your self-image?

A. I am self-esteem!

B. I strongly believe in my own self-worth and in my ability to create my own opportunities.

C. I feel fairly secure with myself; just don’t push too hard.

D. I don’t know — what do you think?

8. Do you have the support of your significant other and/or family?

A. They’re all on board, are an integral part of my plan, and have been assigned responsibilities.

B. They’re in favor of whatever makes me happy.

C. I’m pretty sure they’ll support me.

D. I’m going to tell them about it later.

9. If it’s a necessary part of your plan, will you be able to start up your home-based business while you remain in your current job?

A. Sure — in fact, my boss wants in!

B. If I make a few adjustments in my schedule, I can’t see any other reason why I can’t.

C. Would you please repeat the question?

D. Maybe I’ll be able to work on it for a couple of hours a month.

10. What will you tell friends when they ask why you quit that great job?

A. I’m free at last!

B. That the benefits clearly outweigh the potential costs.

C. I don’t know; maybe they won’t ask.

D. I’ll pretend that I’m still working for my old organization.

Give yourself 5 points for every A answer, 3 points for every B, –3 for every C, and –5 for every D. Now tally up the numbers, and compare your results with the ranges of numbers below.

By comparing your total points with the points contained in each of the six following categories, you can find out whether you’re ready to jump into your own home-based business:

25 to 50 points: Assuming you were honest with yourself as you answered the preceding questions (you were, weren’t you?), you’re ready! What are you waiting for? There’s no time like the present to take the first step on your journey to success with your own home-based business. Whether you decide to drop your day job or work into your new business gradually, you’re ready to give it your all. Read the rest of this book for tips on making your endeavor a raging success.

1 to 24 points: You’re definitely warming up to the idea of starting your own home-based business. Consider starting your own business in the near future, but make sure to keep your day job until you have your venture well under way. Read this book to get a better idea of how to make a relatively painless and successful transition from your present career to your own home-based business.

0 points: You can go either way on this one. Why don’t you try taking this test again in another month or two? Our advice? Read this book before you begin your own home-based business.

–1 to –24 points: Unfortunately, you don’t appear to be quite ready to make the move from career to home-based business. We strongly recommend that you read this book and then take this test again in a few months. Maybe working for someone else isn’t the worst thing that can happen to you.

–25 to –50: Forget it. You were clearly born to work for someone else. Take this book and sell it to a co-worker.

Are you ready to make the move to starting a home-based business? If the quiz indicates otherwise, don’t worry — you’ll have plenty of opportunities in the future. When you’re ready for them, they’ll be ready for you. If you’re ready now, congratulations! The rest of this book shows you what you need to do to make owning a successful home-based business a reality.

Keeping up with the scuttlebutt

Q: I’ve never regretted starting my own business, but the one thing I do miss is being in the middle of the corporate buzz. How can I stay connected with what’s going on downtown?

A: You may be able to get connected without leaving your home by joining and participating in groups on social networking sites like LinkedIn, Facebook, and Twitter. If social networking isn’t for you, the first step is to figure out just what you’re missing from being in the buzz of corporate life. Being part of the daily routine of an organization provides people with a whole array of experiences. Some, like office politics and dreadfully dull meetings, are a joy to get away from. But others, like the following, leave a void that you must find ways to fill:

Feeling like you’re part of the downtown business community: Even when you’re working from home, it’s important to get out of the house and participate in the business world. Join the chamber of commerce, and go to luncheons, after-work mixers, or evening meetings. Get active in various civic and charitable activities in your community. After all, they can lead to valuable business relationships while keeping you up with what’s going on in town.

Getting in on the inside information and latest scuttlebutt in your field: You can replace this need by becoming active in a local chapter of your professional or trade association or by participating in its online forum. To find professional and trade associations in your field, do a Google search using the keyword association and the name of your field.

Though the Web isn’t a substitute for face-to-face contact, beyond the social networking sites, you can use it to locate other individuals, networks, and organizations in your own community through, for example, the message board operated by a trade or professional group you belong to.

Establishing the esprit de corps from being part of a group that’s working together toward a common goal: If you crave group experiences, affiliate with others and work on joint projects instead of working strictly solo.

Finding moral support and positive peer pressure to stay focused — someone with whom to bounce ideas around, celebrate victories, and commiserate disappointments: To fulfill this need, form a group of colleagues with whom you can meet weekly over lunch and call regularly to spur one another on toward your goals.

Seeking out the expertise of superiors you can turn to for advice, getting honest feedback, or talking over strategies and crucial decisions: If you’re missing this type of interaction, seek out a mentor, form an advisory board for your business, or hire a consultant whose experience you respect. Some professional associations have formal mentor programs that offer this kind of contact. If yours doesn’t, suggest that it consider adding such a service — or even volunteer to help organize it.