September 1, 2003
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What It Takes:
Owning a Home-Based Business |
| By Courtney Tritch |
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Tired of working feverishly away at your desk only to have your boss peer over your shoulder to make sure you're doing it "right"? What about whiling away your time in traffic on the Kennedy (read: parking lot)? And the 9 to 5 grind with never enough vacation time? Does it make you want to say…Enough! If so, you're not alone. In fact, these feelings typically precede an employee taking the plunge and becoming a budding entrepreneur. And (hopefully) taking the world by storm.
But if it were really that easy we would all have our own companies and there wouldn't be a need for articles like this one. Once the decision has been made to jump, there is a flurry of other decisions that also need to be made. Perhaps one of the most important decisions is whether you want to open a storefront or become a home-based business.
Behind the scenes, the number of home-based businesses in the U.S. has been growing at a substantial rate. It is estimated that over 24 million Americans currently work from home and every month another 500,000 are added to that statistic. If your business doesn't rely on walk-in traffic or you already have a computer system set up at home, than working from home might be right for you.
For example, graphic designer Jason Feldman of Luzazul Design formed his home-based business in 2000 when he began to feel that after 5 years of working for graphic design companies, he had reached his maximum learning potential. And Jonathan Howell of Photoplay Design (also a designer) formed his business in 1997 after accumulating clients on the side and realizing he could do just as good of a job--if not better--on his own.
Being a home-based business has its perks and both Feldman and Howell admitted that no commute and no dress code were definite benefits. Howell reports that he was recently at a networking group joking with a room full of suit-clad businessmen. When asked why he was not wearing a suit, he simply said, "I'm not selling you a suit; I'm selling you a design!" The gentlemen not only laughed, they agreed.
Working from home allows you to work in a casual and comfortable work environment, which often leads to increased productivity. You aren't bothered by people stopping in your office and you are not distracted by chatter at the water cooler. Howell says now that he works from home, he can accomplish more in 4 hours than he ever did in a whole day at his previous job.
Feldman also pointed out that a key advantage to being a home-based business--especially in a slow economy--is the low overhead. This is a cost savings that he passes on to his clients, making him extremely cost competitive. However, being solely responsible for your business's cash flow is not as glamorous as it may sound. Howell says that in the first 6-12 months of your business, budgeting should take top priority. "My father had his own business and he taught me that budgeting is essential when you are first starting out on your own."
One of the challenges a home-based business owner must face that other businesses do not is the stigma that comes simply from being home-based. Americans still perceive home-based businesses as get rich quick schemes that aren't legitimate businesses. Often people think of them as not being as professional or qualified as storefront businesses. But in the past few years, more and more highly qualified professionals are choosing to work from home. A case in point, Feldman has a Bachelor of Fine Arts in Graphic Design and more than 8 years of solid design experience and Howell has more than 10 years of professional design experience. Both Feldman and Howell also were quick to point out that they choose to work from home. They enjoy working independently and believe that the only way to overcome the stereotype of the "home-based business" is by consistently producing high quality work.
What are some of the challenges a new home-based business owner should be aware of?
- Cabin Fever
- Not having colleagues immediately available for collaboration
- Relying on other people to bring you business
- Spreading your budget too thin (especially in advertising)
- Issues with expansion of the business
- Separating your business life from your personal life
With close to 10 years of home-based business experience between them, Feldman and Howell have some very solid advice on how to overcome these potential pitfalls:
- Confirm that your house is zoned to accommodate a home-based business
- Know that a business license from the City is necessary even when working from home
- Have an office space separate from your living area and be vigilant about your scheduling so you know when to put down your work
- Have a dedicated business phone line
- Know your traffic flow: pay attention to laws governing the number of people who can come in and out of the house on a given day
- Know how many clients you can handle so that you don't set yourself up to fail by promising to be everything to everyone
- Network! Network! Network!
Networking in particular is a good way to not only squelch that cabin fever, but also to meet potential clients and referral sources. Feldman says, "In graphic design, business primarily comes from people you know, so it is important to make a conscious effort to develop relationships through networking."
Both designers joined local networking groups including their local chamber of commerce for the purpose of meeting new clients and creating new business for themselves. And how do they make headway in networking groups that are not industry exclusive? "Of course there is friendly competition, but it is also a great way to meet other designers and share ideas. I've even gotten work from other designers when one of their clients wanted something that wasn't the other designer's specialty," Howell said. And even with the competition, both Feldman and Howell have done well for themselves. Luzazul Design now employs two full time employees as well as a part time intern and Photoplay Design has plans to expand by the end of next year as well.
Will they remain home-based businesses? Perhaps one day they will re-enter the world of commuting and formal office space, but for now they are both content working from home. Howell says, "Even if I ever do get a real office, I will still keep my home office because I really enjoy working from home. And as for right now, there is nothing an office could provide me that I can't get at home."
Courtney Tritch is membership and communications director for the Lincoln Park Chamber of Commerce.
She can be reached at 773.880.5200 or
courtney@lincolnparkchamber.com.
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