Essential Start-Up Strategies

If you're seriously considering working from home, you're not alone. Some 60 million Americans are currently doing so, compared with six million in 1984, according to the National Association of Home-Based Businesses. In five years, it is estimated that as many as one of every two workers will be engaged in a full- or part-time business or doing salaried work at home. For single parents and many women, this alternative facilitates juggling family and career. For fathers, it can lead to spending more time with their children. Working from home can provide the means for stretching a tight budget or finding a new career for those displaced by corporate downsizing. For the retired or the increasing number of people considering early retirement, it becomes a way of contributing, of staying alive and vibrant by not allowing their professional skills to atrophy. And for many with handicaps, it's the door to self-sufficiency and a productive future.

Choose Something You Enjoy and That People Will Pay For
Selecting an appropriate home-based business for yourself requires tuning in to the most popular radio station in the world: WPWPF ("What People Will Pay For"). And simple market research will help you do just that. Begin by asking prospective customers what they need. Go to trade shows and get feedback on your potential product or service. Find out who is in that business now and what advantages you might be able to offer over your competition.

If you are having trouble finding the ideal business, here are four possibilities:
* Turn what you most enjoy into a home-based venture, such as a favorite hobby or interest.

* Utilize existing skills from your salaried job.

* Solve a problem that people are willing to pay someone else to do for them.

* Use technology and resources you already have around the house, from your van to your computer.

Define Your Niche
It is much easier to market yourself as a specialist serving a particular niche. This helps you stand out from the competition, and also allows you to charge a decent fee because you are more than a general "worker" people can hire as an employee or from a temp agency.

There are four primary ways to define your niche:
* WHO you serve -- e.g., a computer consultant who works only with women; a public relations firm that specializes in assisting environmentally-conscious companies; a caterer who handles parties and weddings for the Hungarian community.

* WHAT you provide -- e.g., a computer consultant who works only with Macs; a public relations firm that specializes in doing publicity book tours for authors; a caterer who prepares health food that looks and tastes decadent.

* WHERE you work -- e.g., a computer consultant who focuses on the east side of town; a public relations firm that specializes in getting media coverage in foreign countries; a caterer who has attained renown for servicing a variety of outdoor events.

* WHEN you are called upon -- e.g., a computer consultant who is available for weekend and after-hours calls; a public relations firm that specializes in crisis communications for companies involved in scandals or tragedies; a caterer who can be counted on to handle even last-minute dinner parties with aplomb.

Charge What You Are Worth
The truth is that no one automatically knows what to charge; people generally have to discover what is both appropriate and competitive. Begin by doing some basic research to determine the following:

How much is your product or service worth in concrete terms? Value, like beauty, is in the mind of the beholder to a certain extent. There are several ways to ascertain the value of what you offer to prospective customers. Can someone currently obtain this product or service elsewhere? If so, how much are they paying for it?

What will people actually pay? Perception can be as important as the actual value of the product or service being offered. If potential customers perceive your price as being too high, you'll end up without a sale. By comparison, if buyers perceive something as being too cheap, they'll worry that it may be inferior in quality.

Above all, be careful not to sell yourself short. Consider following this commonly-used pricing formula:

Direct Costs + Overhead + Profit = Your Price

* Direct costs refer to costs you incur in doing your job: gas, telephone calls, postage, printing and your time. Calculate your salary -- including fringe benefits -- into your rates. Remember to add enough to cover the hours of un-billable time you spend marketing and administering.

* Overhead refers to the general costs of doing business: equipment, software, utilities, office supplies, advertising and marketing expenses, and administrative costs. Most home businesses multiply their hourly wage by two or three to cover overhead.

* Profit is an amount calculated over and above direct and indirect expenses; many experts advise adding 15 to 20 percent or more.

If you manage a factory, wholesale outlet, retail store, Service shop, or are a contractor, you'll have to sell. No matter how
good your product is, regardless of what customers think of this, you must sell to endure.
Direct selling methods are through private sales efforts, Advertising and, for many companies, exhibit - like the styling and
packaging of the product itself - in windows, at the establishment, or even both. Establishing a good reputation with the general
public through courtesy and distinctive services is a direct process of selling. While the latter should never be disregarded,
this brief discussion will be restricted to direct marketing methods.
To establish your business on a firm footing requires a great deal Of competitive personal selling. You may have established
competition to overcome. Or, if your thought is fresh with little or no competition, you've got the additional difficulty of
convincing people of the value of this new idea. Private selling work is almost always essential to accomplish this. If you are
not a good salesperson, seek an employee or asociate who's.

A second way to build sales is by advertising. This may be achieved Through papers, shopping papers, the yellow pages section of
the phone directory, and other printed periodicals; radio and television; handbills, and direct mail. The media you select, as
well as the message and kind of presentation, will depend upon the particular customers you would like to reach. Plan and prepare
advertisements with care or it'll be ineffective. Most media are going to have the ability to describe the characteristics of
their audience (readers, listeners, etc.). Since your initial planning described the characteristics of your potential clients,
you want to match these characteristics with the media audience. If you're selling expensive jewelry, do not advertise in high
school papers. If you repair bicycles, you probably need to.

Advertising can be quite costly. It is wise to put a limit upon An amount to spend, then stay within that limit. To assist you in
determining how much to invest, study the operating ratios of similar companies. Media advertising salespeople can help you plan
and also prepare advertisements for you. Make sure you tell them your budget limits.

A third method of stimulating sales is successful displays both in Your place of company and outside it. If you've had no previous
expertise in screen work, you will want to study the subject or turn the task over to someone else. Observe screens of other
businesses and read books, trade publications, and the literature supplied by equipment manufacturers. It may be smart to employ a
screen expert for your opening display and special occasions, or you could get the help of one on a part time foundation. Much
depends on your kind of business and what it requires.

The proper number and types of selling effort to use change from business to business and from owner to owner. Some businesses
prosper with low-key revenue attempts. Others, such as the used-car lots, thrive on competitive, hoop-la promotions. In any event,
the importance of effective selling can't be over-emphasized.

On the other hand, do not lose sight of your major objective - to Earn a profit. Anyone can produce a large sales volume selling
dollar bills for ninety cents. But that will not last long. Keep control of your costs, and cost your product carefully.

Record Keeping. 1 essential element of company management is the keeping of adequate records. Study after study shows that many
manager failures could result from inadequate records or the owner's failure to make use of what information was available .
Without documents, the businessperson can't see in advance which way the company is going. Up-to-date records may predict
impending tragedy, forewarning one to take action to avoid it. While additional work is required to maintain an adequate set of
documents, you'll be more than repaid for the effort and cost.

If You Aren't prepared to maintain adequate records - or have somebody Keep them - you shouldn't try to run a small business. At a
minimum, records are needed to substantiate:

1. Your yields under taxation legislation, including income tax and social Safety laws;

2. Your request for credit from equipment makers or even a loan From a lender;

3. Your claims about the company, in case you would like to market it.

However, most important, you want them to run your business successfully And to raise your profits. Having a decent. Yet simple,
bookkeeping system you may answer such questions as:

How much company am I doing? What are my costs? Which seem to be too high? What is my gross Profit margin? My net profit? How much
am I piling on my charge enterprise? What is the state of my working capital? How much money do I have available? How much in your
bank? Just how much do I owe my Suppliers? What is my net worth? That is, what is the worth of my ownership of The enterprise?
What are the trends in my Receipts, costs, profits, and net worth? Is my financial situation improving Or growing worse? How can
my resources compare with what I owe? What's the Percentage of return on my investment? How many cents out of every dollar of
Sales are net profit? Answer these and other questions by preparing and studying balance sheets and profit-and-loss statements. To
do this, it's Important that you record information regarding trades as they happen. Keep This information in a comprehensive and
organized fashion and you will have the ability to answer the above questions. You'll Also have the answers to these other vital
questions About your company as: What services or products do my clients like best? Next best? Not at all? Do I carry the product
most frequently asked? Am I Qualified to render the professional services they need most? How many of my charge Customers are slow
payers? Shall I change to money only, or use a credit card Bill plan?

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