Tuesday, February 27, 2007

Reality Check for The At-Home Entrepreneur

Clicking your way through Blogdom brings up a thousand and one seductive ways to "make money at home with your computer," along with a million tips on how to do this magical, wonderful thing.

The internet has been full of this kind of promise and advice for years -- ever since we discovered we could work at home and would no longer have to battle the hassle of commuting, the daily interaction with idiots and sweating our lives away for a corporation's profit.

Fourteen years ago I decided that I, too, had had enough. As a member of a corporate management team I had a load of responsibility but an equal load of perks -- it was comfortable, safe and predictable.

It was also taking me just north of crazy. One glorious day I actually lived out the daydream and resigned at the top of my voice, threw my company credit card and car keys onto my desk and walked home.

Wait... back the truck up. I did that only after I had been preparing for a new career at home for over a year. The signs had been clear for a long time that my blood pressure and sanity were on the edge, and the idea of working at home had long intrigued me.

I'd been writing since I was old enough to hold a fat crayon and had been published often in technical journals and newspapers, so that was my obvious first choice. However, It didn't take long to figure out that sure, I could make a living writing -- but it would take at least 10 years to do it, and even then my per-hour income would be about three cents when I factored in all the marketing that would be necessary. I scratched that dream reluctantly off my list.

With serious research and investigation I found a respected, profitable job that can be done at home. It took over a year of intense training (much of it while still at work... sorry, ex-boss), and since 1994 I've run a successful at-home business. My board meetings are with the backyard birds and, while still meeting contractual deadlines, I work only the hours I choose, rarely wear anything presentable during the day, and I know exactly how many steps it is to the kitchen... BUT.... I've also had to provide my own health insurance, pay self-employment taxes and quarterly estimated income taxes, and fund my own retirement.

Over the years, on professional bulletin boards and my own business website, I've posted some articles that have proven helpful to newbies. I've also encouraged questions and offered assistance to those with a similar desire and drive to work on their own in this profession.

I estimate that about 1% of the feedback and questions has been reasonable and I've been happy to help these serious people.

The other 99% have been ludicrous and pathetic, and I'm afraid this percentage may represent a large portion of those who currently think they can start a viable, profitable home business from basically nothing... no specific goal, no plan, no investment, no particular skills, no training, no business sense, no accounting knowledge, no marketing savvy, NO CLUE. Give them a computer, an internet connection and a homemade business card, and they're in business, baby!

I've received countless emails that have been very clear on what the writer expects from working at home, including very limited hours, the ability to tend toddlers while working, summer months off for their families, hugely inflated salaries with benefits, and, best of all, they want to learn a profession in a few months at almost no cost and no effort. They rarely mention the effort and time they are willing to invest.

Ask anyone with their own business what it takes to reach success and you'll always get the same answer -- a hell of a lot of hard work. The first three years of my business I worked a minimum of ten hours a day, six days a week (seven days most weeks). I've taken exactly three weeks of vacation in the last 14 years, only a very few (and valid) sick days, and my first thought whenever I'm asked to go anywhere or do anything is the possible impact it will have on my production and my contracts with clients.

I'm sure there are different conceptions of "home business" and varying degrees of what will constitute success. Addressing and stuffing envelopes is one level, working the angles for no-effort blog hits is another, taking surveys... well, you get the picture. Like anything else in life, your return is roughly equal to the effort you make.

I do know if someone plans to invest time and money into a business and expects to make over $60.000 a year, that someone better consider some of the basics and be ready to deal in hard facts, not wishful thinking. While conceptualizing a new business is exciting, creative and fun, in the actual planning stages you need research, facts, solid analyses of every facet of a potential business; this isn't the time to drift along on wishes and dreams.
  • Is there a need for your service or product? How do you know? Do you have quantifiable data that shows the need, or are you assuming... do you just think and hope there is?
  • Do you LIKE the idea of working in this field, or selling this product? You're going to be working harder here than you ever did for any previous employer -- make sure you're considering something you really want to do.
  • If your idea is proven viable, who is your target market? Local? Internet? What kind of competition will you have? What is your value proposition? What will YOU offer that your competition does not? How will you differentiate your business from theirs?
  • What kind of money can you make? How do you know? What is your source for knowing this? Remember that a startup company won't reach its potential in just a few months -- it can take years in some cases. Remember, too, that if you're competing in a local market, you must be competitive enough to garner business, but profit is required for you to stay afloat. Profit is not a dirty word -- it's your lifeline.
  • What costs will be involved in your business? This is a dangerous category to underestimate and must include both startup costs and ongoing operating costs. (Training, inventory, office, equipment, supplies, transportation, software, communication, accountant, lawyer, insurance, taxes, bonding, employee-related expenses, etc.)
  • What will effective marketing consist of? How much will it cost? Can you do it or will you hire professionals? There's no such thing as a successful business without GOOD marketing.
  • If this is a new field for you, where will you get your training? Will you be able to work without actual experience? Do you know someone in the field who is willing to act as a mentor? Will your employees need specialized training?
  • Is there a national or state professional organization to support your new endeavor? Networking is invaluable, and if you're not used to the solitary life of working on your own, you will value these contacts.
  • Do you know the basics of business accounting? If you expect to have fat deductions for next year's tax return, you need to have the basics in place from day one.
  • Assuming you'll want to take time off occasionally, who will run your business in your absence? Clients don't care that you need a break -- they care that their work is done or product delivered and that you keep your commitment 100% of the time.
  • What is your funding for your investment? How will you live until your business brings in money? What about slow periods? Illness? Emergencies? If you are considering outside financial investment, you'd better be ready with a business plan -- you DO know what a business plan is, right?
  • Even if you're young and healthy, at some point you have to think about health insurance and retirement -- and Uncle Sam isn't kidding about filing those quarterly tax estimates.
  • If you're considering a franchise, is it a reputable one with a proven record of success, or are you about to become a cover story on Dateline?
  • What about your personal situation at home? You'll need space - time - and if you have young children, child care, even if only occasionally. It's called WORKING at home -- not just opening mail with big, fat checks in the envelopes, and oh yeah, that free lunch thing.... still true.
Are you really ready to make the commitment of time, money, effort, blood, sweat and tears that it takes to start and run a business from home? You need hard data for every one of the questions above -- and the other hundred I didn't list.

To paraphrase the old bumper sticker, the worst day working for yourself is better than the best day slaving for another.... but that's my viewpoint from the porch of a successful home business -- one that offers a real service, one that I planned and prepared for by huge effort, and one that is my first priority.

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