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Home-based
Businesses
Home-based businesses comprise about
50% of all U.S. businesses. They are
the predominant form of small
business. Over two-thirds of all
sole proprietorships, partnerships,
and S corporations are home-based.
Home-based businesses are
concentrated in relatively few
industries. More than 60% of
home-based businesses are in the
service and construction sectors.
Over 90% of home-based businesses
are sole proprietorships, and are
quite small.
Best
Home-Based Business Ideas
Organizing garages,
advising eBay sellers, collecting debts, and pet-sitting are ideas for starting
a business out of your home.
Is this the year
you'll to start a small business from your home? If so, what opportunities
provide your best bets for success?
Menlo Park (Calif.)-based Homestead
Technologies, which helps entrepreneurs design and maintain their Web sites, has
come up with a list of the best home-based business opportunities (for 2007). Manvinder Saraon, the company's vice-president of marketing and business
development, discussed a few of them recently with Smart Answers
columnist Karen E. Klein. Edited excerpts of their conversation follow.
How did you
determine which business opportunities have the most potential for home-based
entrepreneurs in 2007?
We looked at the
business areas where there's a lot of spending going on and the areas that are
hugely popular right now. We also looked at commonly held "pain points" for
consumers, and trends where there are markets breaking out. We also looked at
how difficult it is to get started, in terms of experience, education, and
money. For instance, we feel that one of the best opportunities presenting
itself for the home business market is being a garage organizer.
Why
specifically focus on garages?
Because there's been
a popular trend toward home makeovers and interior design and closet organizing
for a few years. You don't have a big barrier in having to educate the
marketplace about whether this is a valuable idea. But the one area of the home
that's not been focused on so far is the garage. And garages of typical
Americans tend to be very cluttered. So there's a market there, and it also
presents easy entry: You don't need a specific degree to organize a garage.
You're offering your skills and your time and hard work.
What are
some other categories with a similar familiarity in the marketplace?
Another one is a
niche market created by the eBay phenomenon. There are more than 700,000
businesses selling on eBay, and many of them recognize that they would be more
successful if they had access to market research like pricing strategies,
shipping information, and product analysis.
Home-based
entrepreneurs who have some experience with eBay themselves could provide
educated recommendations to these sellers or would-be sellers on a consulting
basis. It's a classic business-to-business niche, but with an application in a
new and growing marketplace.
O utsourcing
services
A similar idea would
be doing specialized outsourcing jobs. Outsourcing is integral to many firms
that have limited resources and need to focus on their core competencies, and a
lot of companies prefer doing business with other small-business owners. So we
could see home-based entrepreneurs doing outsourcing jobs for small companies.
People could specialize in business functions like sales, customer
service and support, human resources, recruiting, accounting—any competency that
they have and that a small business cannot afford to build in-house, or chooses
not to establish in-house.
For instance, there are people who love interacting
with the public and who are very good on the telephone. Small companies could
hire a home-based person like that to answer telephone or e-mail inquiries and
take orders, as long as they can get them the proper training and familiarize
them with the company's products, policies, and services.
One of the
specialized services that we pull out for inclusion in the list on its own, by
the way, is running a home-based debt-collection agency. There is so much
outstanding debt that we currently have more than 6,000 debt-collection agencies
in this country. There will be more growth in that area
and more fragmentation in terms of individual debt-collection services popping
up to specifically service small businesses. However, people collecting debt do
have to follow strict policies specified by the Fair Debt Collection Act--they
cannot harass or threaten debtors, or call them at their place of employment,
for example.
Yes, you do need to
know about the federal laws that cover debt collection and small business, and
those specific to your state and any other states where you'll be doing
collections. There are also laws that are specific to home-based businesses and
what they can do vs. what office-based businesses can do in terms of debt
collection. The best way to familiarize yourself with the whole arena might be
to get a job working for an established debt-collection agency for a while.
That's also a good way to figure out whether it's something you are good at and
enjoy doing.
Related to that idea
is another outsourced service: doing background checks for employers who are
considering potential hires. Small businesses with limited resources understand
that pre-employment screening is becoming mandatory because of security concerns
and issues like workplace violence. But they don't have a human resources
department that can do this. So they are turning to background-check companies
to handle reference checking, criminal background investigations, and due
diligence. This business is ideal for startups who want to operate from home and
provide a vital service to companies. Again, they will need to understand the
legal requirements involved, particularly those having to do with privacy.
P et
sitting services
Providing
companionship for pets while people are out of town is another great home
business idea that doesn't require specialized education, just a love of
animals. People don't like to keep their pets at vet's clinics in a cage,
but they may be reluctant to impose on their friends and neighbors if they
travel a lot. There's a $34 billion-a-year industry in pet services in this
country, and 135 million dogs and cats in the U.S., so we know there's a
huge market out there.
Digital
photography and "scrapbooking"
Yes, people have been teaching scrapbooking workshops and selling products for
several years now. But our idea is a twist on that, as an opportunity for the
home-based entrepreneur to market herself as a professional scrapbook artist.
The reality is that we all have these digital cameras that take beautiful
pictures, but they're all stuck online or in a computer or a camera and nobody
ever looks at them.
Also, most of us
don't have the time or the talent to download the photos and put them together
to make a tangible memory or a gift for a relative or friend. Someone creative
who has done this for herself as a hobby could turn it into a business. It's
suggested that they get started by doing things like donating their services to their
kid's school as part of an auction, or teaching a summer class through a
community college or local recreation center. Once they can show potential
customers their work, those people will hire them to do the same thing with
their own photos. It's a great gift business for holidays and birthdays.
P roviding
children's art education
The tutoring
market alone is around $4 billion annually, so home-based businesses that create
products or services aimed at educational companies should find a lot of
customers. Schools long ago reduced art budgets, but parents are recognizing
that creativity and innovation are important skills for their kids to have. And
art, music, drama—these all foster those kinds of skills.
Other home-based businesses
States rarely directly regulate industries that involve
home-based businesses. Local governments issue licenses and permits. Licenses
are used as revenue generators and also to regulate certain kinds of businesses
or activity. Usually either these businesses are unsuitable for home offices
(i.e. adult entertainment and liquor stores). There are exceptions, however,
including the following:
* Day care service (family day care home)
* Bed & breakfast
* Massage therapy
* Data Entry Opportunities
* Paid Survey Opportunities
* Travel Home Businesses
* Typing at Home
* Freelance Writers
More Information
HomeBusinessAssociation.net.
Email:
webmaster@work-at-home-business.com
DBA: HomeBusinessAssociation.net
Mail: 409 Kathy Lane, Wylie, Texas
75098
Phone: 972-442-3319
American Home Business Association
965 East 4800, Suite 3C
Salt Lake City, UT 84117
Phone/Fax: 1-866-396-7773
American Association of Home-Based Businesses
P.O. Box 10023 - Rockville, MD 20849
phone: (800) 447-9710
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