In-House

Thinking of starting your own homebased business? Take a peek behind the shutters and find out what it's like to make the dough right at home.

They roll out of bed in the morning and head off for work--still in their pajamas. They work from their dining room tables, stock inventory in their cupboards and arrange meetings in the lobbies of their local hotels. They set their own schedules, jog on the beach during their lunch breaks and give out their house keys to employees across the city.

This is what life is like for Andrew Aussie, co-founder of Honest Foods, a natural foods company; Stacey Roney, founder of Beauty on Call, a staffing agency for the beauty industry; and Meg McAllister and Darcie Rowan, co-founders of McAllister Communications, a PR firm. Using their homes as their headquarters, these entrepreneurs, along with a growing number of others, are running successful businesses without even stepping foot outside their front doors.

A February 2004 study by the Independent Insurance Agents & Brokers indicates that approximately one in 10 U.S. households operate some type of full- or part-time homebased business. And these businesses are more than holding their own. A May 2006 study released by the SBA's Office of Advocacy reveals that America's homebased sole proprietors generate $102 billion in annual revenue.

As it grows in popularity and profits, homebased business is being perceived in a much more favorable light. According to Beverley Williams, a home business advocate for the past two decades, running a business from home was once frowned upon or dismissed as a hobby for moms seeking extra money. Now, homebased business is widely accepted and is attracting both men and women.

Aussie, Roney, McAllister and Rowan learned from experience and mastered the discipline. Here, these successful entrepreneurs open up about the ins and outs of running a business from home, including how to ward off loneliness, set up shop, deal with zoning laws and insurance issues, bring employees into the home and project a professional image.

Making the Transition
Deciding that the quality and taste of their brand was more important than the luxury of their workspace, Aussie, 39, and Mark Oliver, 58, decided to launch Honest Foods in April 2006 from Aussie's Del Mar, California, home. This gave them the freedom to invest the majority of their startup capital into two years of research and development, but it also meant a major adjustment for Aussie, who had been used to a very social office environment.

For 11 years, Aussie had worked in sales and marketing for Kashi Co., where he led a team of 12 people and was surrounded by 60 to 70 coworkers. During the transition, Aussie had to figure out how to recreate that social stimulation from his home office. He relies more than ever on phone and e-mail to stay connected with others, regularly arranges in-person meetings with vendors and suppliers at his home or a local restaurant or coffeehouse, and has even thrown parties for his ex-coworkers. "I thrive on camaraderie and social interaction, so it has been key to realize that it's now my responsibility to set that up," says Aussie. "I set up a lot of lunches and gatherings that maybe I wouldn't have set up before as a way to bring some more social interaction to my daily experience."

Combating loneliness is one of the top challenges facing homebased entrepreneurs, according to Williams and Paul Edwards, author of numerous books on the topic, and co-author of The Entrepreneurial Parent: How to Earn Your Living and Still Enjoy Your Family, Your Work and Your Life. Williams recommends seeking out the services of the local chamber of commerce or other small-business groups. These can offer good support networks as well as serve as invaluable resources of information.

Aussie also has learned that when not in the same office, over-communication is key in keeping everyone on the same page. Information, which is so effortlessly transmitted in an office setting through impromptu meetings or nonverbal communication, isn't always transmitted as accurately among Honest Foods' independent contractors who work virtually from their homes. "It means following up in writing, following up with voice mail, sending another e-mail, sending out reminders, doing all those weekly meetings," says Aussie. "These may have seemed superfluous in the office setting but are absolutely critical in a home office."

Another transition you'll have to make is equipping your home office, rather than relying on your IT guy to make all the decisions. Scrimping and saving is good, but even a home office needs a minimum investment in terms of equipment. As tempting as it may be, Edwards advises resisting the urge to go all-cellular or depending just on Skype and instead recommends equipping the home with at least one landline.

Aussie recycled his father's office equipment, furnished his office with hand-me-down furniture but made sure his copier is high speed, his phone has a speaker on it and his computer is top quality. Says Aussie, "People may underestimate the need to make that kind of investment in your home office."

Setting Up
Honest Foods is flourishing with year-end sales projected to reach $1 million and product already on the shelves of major natural food retailers, including Whole Foods Market and Wild Oats Markets. This success might be partially due to the physical setup of Aussie's office. He runs the business from a separate room in the house dedicated as his office space to keep his work life separate from his family life. It may seem trivial, but separating family life both spatially and time-wise is crucial, according to Edwards, who recommends using a screen or a divider if a separate room can't be spared.

Other key questions you should consider before choosing where to set up office: Does it interfere with the family foot traffic, and does it offer the solitude needed to work? A little planning beforehand could greatly affect the productivity of the business.

Aussie has learned he works best by shutting everything down and closing the door to his office at a set time each day. Work schedules will differ according to the preferences of the entrepreneur, but no matter how you operate best, Edwards strongly recommends setting goals for each day, so the business continues to move forward despite the hundreds of distractions that can occur daily.

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