Did you know that homebased business owners have higher
household incomes than the average American worker and that a large
percentage earn six-figure incomes? Marketing is an investment in
the future success of your homebased business and should be
considered an operating expense to be factored into your pricing
structure. Set strong financial goals, and use sales and marketing
programs to generate leads and sales that will get you where you
want to go.
One rule of thumb is that you'll need to earn at least
one-third more as an independent home business owner than you did
as an employee to realize the same salary. (And, of course, as your
business grows and you hire independent contractors or employees,
the amount you project in earnings must increase proportionately.)
In many cases, you can expect your marketing costs to draw against
a higher percentage of your gross income during the start-up phase
of your homebased business.
That was clearly the case for Ken Norkin of Takoma Park,
Maryland, a successful advertising agency copywriter who decided to
strike out on his own. When Norkin started his business in 1991, he
wanted to position himself as a business-to-business,
high-technology copywriter who could make short work of complex
assignments. He targeted advertising agencies, design studios and
select local corporations and associations in the Washington, DC,
area. Norkin decided his best marketing tool would be oversized
postcards. For a start-up investment of about $1,500, he created
5-by-7 cards that were creative, clever and funny, with a different
card for each target audience. He sent an initial mailing of
several hundred cards, and then repeated the process periodically
throughout the year.
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Norkin's investment was amply rewarded. Two days after his
first mailing, Norkin got a response from an advertising agency
that became a client--and has been ever since. Over the past eight
years, that client alone has generated hundreds of thousands of
dollars in sales for Norkin.
But what if your start-up marketing program requires more than
several thousand dollars? What if you need half a million or more
to reach your market? That was the challenge for the founders of
Atomic Web Inc., which created a turnkey Web site development tool
for businesses and individuals called website 2 Go, which includes
e-mail, a complete statistical package of tracking tools and
support, and Web site hosting. The four partners, Steve Chambers,
Lynn Van der Veer, Don Dailey and David Dear, who each work from
their own home offices in the Washington, DC area, needed half a
million to a million dollars to work on their service full time and
test a major marketing program.
The partners were initially turned down for loans by several
banks. But they had two things going for them. Their product was
unique in the market--a drycleaning business, for example, could
use their service and have a custom site up in hours without having
to write its own content--and they were in a high-tech industry,
which made them attractive to entrepreneurs with venture capital.
They enlisted the services of an investment broker who helped them
define their goals and arranged meetings for the team with
potential investors. Ultimately, the partners secured their
start-up funds by signing an agreement with an investor who was
starting an incubator. The investor and the broker received stock
in Atomic Web in exchange for the funding, and the partners also
received stock in the other companies in the incubator. This
encourages all members of the incubator to contribute to each
other's success. With their funds in hand, the Atomic Web
partners are taking website 2 Go to select markets in anticipation
of a successful national roll out.
Originally published in the March 2000 issue of HomeOfficeMag.com
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