Get Up & Grow
You've made the leap, gotten your homebased business up and running, and now it's smooth sailing. But don't slow down yet! Your business needs the right combination of care and discipline to grow and thrive. Here are 51 ideas to help you build a healthy homebased company.
1.Use your business plan in your daily operations. Your business plan should be more than just a start-up exercise; make it a living, breathing document that helps keep your business on track. An effective plan doesn't have to be elaborate; Susan K. Urbach, regional director of the Oklahoma Small Business Development Center, says an effective plan can be as simple as putting down a few lines under each topic. After it's written, refer to it regularly; update it at least once a year--more often if you work on short-term projects that can have a major impact on the direction of your company.
2.Set physical boundaries. Clearly define your work space, and, if possible, make it a place that can be closed off from the rest of your home. Insist that family members respect your business area. Randy G. Pennington, president of Pennington Performance Group, a management consulting firm in Dallas, says his office has its own identity and even feels different from the rest of the house--mandatory, he says, because if you can't get away from your office, you'll always be tempted to work. "At some point, productivity and enjoyment will suffer," he says. "Many people choose a home office because of quality-of-life benefits. But if you never get away from it, the benefits diminish and you start living at work rather than working at home."
3. Keep your records current. You may be tempted to let administrative chores slide when you're busy serving customers, but don't. You'll maintain more accurate records and spend less time in the long run by doing it as you go. Check out the various software packages that make record-keeping relatively simple, advises Charles L. Norman, a CPA and senior manager specializing in entrepreneurial services with Ernst & Young LLP in Toledo, Ohio. Good record-keeping habits also help you meet your various tax obligations. "If you keep your records up to date, you can easily see where you are in relation to your goals," says Norman, "and you'll know if you need to make any adjustments in your strategy."
4. Take classes to enhance your skills and knowledge. Whether or not you're in a profession that requires continuing education, the process of learning should be ongoing. Though you'll learn plenty by simply running your business, you'll benefit from taking classes in a formal educational environment. In addition to courses in your particular industry, look for opportunities to learn more about business management, technology and marketing.
5. Manage your time well. Set goals, create task lists, establish priorities and don't allow yourself to be distracted. Use an organization system that works for you; many of the popular organizer manufacturers also offer training to help you use their products more effectively.
6. Seek good advice. Urbach says this is where you should learn from large corporations, which have boards of directors and other sources of advice and information. "There's no reason why a homebased business owner can't do the same thing," she says. "Assemble a team of advisors to help you [acquire] all the information you need to grow your business." Those advisors can be paid (such as attorneys and accountants) or not (friends and colleagues who are willing to provide support).
7. Create a mission statement. Keep your mission statement short--usually just one sentence and no more than two. It should define who your primary customers are, identify the products and services you offer, and describe the geographical location in which you operate. A mission statement helps you maintain your focus.
8. Know your insurance needs. Most standard homeowner's policies are not sufficient for a homebased business. Consult with a business insurance agent to make sure your business equipment and inventory are protected. You may also need liability coverage, both for your physical office and your products and services; income replacement coverage, in case some sort of disaster keeps you from operating for any length of time; and disability insurance. If you have a partner, you may want to purchase "key man" insurance on each other to provide financial security in the event of an untimely death.
9. Back up all critical data and store it in a separate place. Make this a part of your regular work routine. A computer system crash, theft, fire or other disaster can devastate your business if the information has not been duplicated and stored elsewhere.
10. Have a growth plan. Set targets for short- and long-term growth, and map out a plan to reach your goals. Know how you're going to handle the growth; simply bringing the business in is not good enough--you need to know how you will service your customers.
11. Set up accounts with vendors before you need them. Your growth plan should tell you what kind of suppliers you'll need. Establish a relationship and credit line with appropriate suppliers before you need them so you're ready to act when the time comes.
12. Establish backup resources. For the times when you're too busy to do it all, build relationships with temporary help agencies, subcontractors or companies that offer services similar to yours. This way you'll be able to meet your customers' needs in an overload situation.
13. Be a backup for someone else. When business isn't as brisk as you'd like, offer to support another company that needs help. You may find that a company you once considered to be a competitor is actually an excellent client.
14. Use letters of agreement and contracts. Urbach says putting every business transaction in writing provides a number of benefits: It enhances your professional image, clarifies your agreements and eliminates the risk of any misunderstandings, increases the level of commitment on everyone's part and gives you documentation should you ever need it to resolve a dispute.
15. Review your communications system at least once a year. Telecommunications technology is advancing at a rapid rate, and phone companies are regularly adding services that you may be able to use. Also, most phone companies have created special departments to serve the needs of homebased businesses. Let them help you be as efficient as possible.
16. Be accessible. If your work takes you out of the office regularly, be sure your customers can get in touch with you when they need to. Use a reliable voice messaging system, and consider a cellular phone and pager. Or check with your phone company about the availability of one-number service, which is a single telephone number that can be programmed to find you when you're not in your office. Be sure your customers never hear a busy signal; use features such as "call forward-busy" to forward incoming calls to a voice-mail box if you're on the line.
17. Install a dedicated phone line for your business. Don't use the same line for your personal and business calls, and don't allow anyone who doesn't work with you to answer the company phone. Always answer your business line in a professional manner with the company name or your name.
18. Consider a dedicated fax/data line. Depending on how many faxes you send and receive and the amount of time you spend using e-mail and other online services, you may benefit from the convenience of separate voice and data lines. Many phone companies offer special discounts on second lines for homebased businesses.
19. Create a professional voice-mail announcement, and change it daily. This is not the time to be clever or cute. If you need to, write a script to use when you record your announcement. Identify your company, yourself, the day and date, and indicate your availability (for example, will you be out of the office that day?) and when the caller can expect to hear from you. Tell callers how to skip your announcement and immediately leave a message; also tell them how to send a fax.
20. Have an e-mail address. "No matter how small your business is, you must have the proper communication tools, and an e-mail address is essential these days," says Urbach. Check your e-mail at least twice a day, and respond to messages promptly.
21. Consider a Web site. Even if you don't have a product that can be effectively sold over the Internet, a Web site can help establish your presence, providing customers and suppliers with information about your company and what you have to offer. Including a Web address on your marketing materials sends a message that your company is a sophisticated, forward-thinking operation.
22. Give business cards to everyone you meet. After you've been in business for a while, you may forget that not everyone you meet is aware of or remembers what you do. Passing out business cards at every opportunity--even to people you know--is a good reminder. Remember, your business cards don't do you any good unless they're in someone else's hands.
23. Offer referral rewards. Encourage existing customers to refer new business by compensating them, perhaps with a gift certificate or a discount on their next invoice.
24. Write a comprehensive marketing plan. Create a detailed strategy that covers at least one year and includes projects, budgets, specific tasks and expected results. Map it out on a calendar so you know exactly what you have to do and when. Continue your marketing efforts even when business is good; if you stop feeding the pipeline, your volume will eventually drop.
25. Invest in serious market research. Don't guess about the potential demand for your products and services. To effectively forecast, you need real numbers based on reliable research. To do the research on your own, start with a visit to your local library. If you decide to use a market research firm, shop around and check references first.
26. Know your market and recognize changes. No matter how well you defined your market when you started your business, it's highly unlikely it will remain the same over time. "If you don't recognize the changes in your market, you can't respond to them," Urbach says. "As you grow and your capabilities expand, you may be able to serve markets you couldn't before. External circumstances may also change your customer base. You have to constantly reevaluate your market and how you reach it."
27. Invest in professional marketing materials. "Your customers will assume that the quality of your work is as good as how you present yourself," Urbach says. Amateurish business cards and brochures send a message that you don't take yourself seriously--so why should your customers? Hire a good graphic designer to design your business cards, letterhead and brochures. "You can't go wrong investing money in a professional design," Urbach says. If you can't afford a graphic designer, use a simple typeface on quality paper; most printers have formats you can follow. Urbach also recommends avoiding the pre-printed stationery kits available in most office supply stores; they're recognizable and will make you look like a small company.
28. Join the right associations and organizations. Look for the groups your prospective customers belong to, and spend most of your time with them. Also, although they may not put you in regular contact with prospective customers, membership in your industry's leading trade association and your local chamber of commerce are good ways to enhance your image.
29. Maintain a consistent marketing identity. Your business cards, stationery, brochures and other marketing materials should match and carry a consistent theme. You can't expect your customers to be comfortable and confident with who you are if it appears that you don't know yourself.
30. Keep your marketing materials current. Out-of-date printed materials make you look like an out-of-date company. If you move, toss your old stationery and brochures and have new ones printed immediately. Then use that change as a reason to contact everyone on your client and prospect list and remind them what you can do for them.
31. Develop an "elevator introduction." You should be able to clearly describe your business in the length of time you'd spend in an elevator with a stranger. Develop and practice a short (10- to 15-second) description of what you do; make it understandable to someone outside your industry.
32. Never miss a marketing opportunity. Always be on alert for effective, inexpensive marketing opportunities. Be visible in your business community, speak to groups and remind friends what you do.
33. Make your fax cover sheet a marketing tool. Unsolicited marketing faxes are offensive--and illegal in some states--but there's nothing wrong with including a marketing message on your fax cover sheet to promote your business when you send legitimate faxes. Be sure your cover sheet is legible, clearly displays your company information and mentions a specific product or service. Change the marketing message periodically. Avoid cuteness and cartoons; they aren't professional.
34. Test-market your marketing ideas. Before you implement any marketing campaign, test it on a limited basis, and fine-tune it before a full-scale rollout.
35. Adopt good ideas from other businesses. Learn from the experiences of others; when you see something that works well, figure out how to use it in your company.
36. Stop doing things that don't work. It's common, Urbach says, for people to keep using tactics that don't work because they don't know what else to do or they don't want to admit they're doing something wrong. "Put your ego and fears aside," she advises. "When something clearly isn't working, admit it and come up with an alternative."
37. Use public relations techniques as part of your marketing plan. Getting quoted in a newspaper or magazine can enhance your image. Make yourself available to the media as an expert in your industry. When your name appears in a publication, get permission to reprint the article and use it as part of your marketing efforts.
38. Ask satisfied clients for testimonials. Happy clients will be delighted to write a letter of recommendation that you can show prospective clients or quote in your brochure.
39. Be a good business citizen. Participate in the community and support local events. Sponsorships are a great way for a small company to look big. Consider sponsoring a local amateur sports team, having your company play a visible role in a charity fund-raiser, or making a donation to a good cause in the company name. Many local sponsorships and events are affordable, and they put your company name out in the community.
40. Network with other homebased and small-business owners. Others in business can offer support. The business section of your local paper should list meetings and other networking opportunities.
41. Create alliances to handle large projects. If you want to go after some business that's too big for you to handle, team up with another small business to do the project. Be sure to draw up a detailed agreement that outlines your mutual obligations, responsibilities and how expenses and revenues are to be distributed.
42. Seek advice. In addition to assisting you with the start-up process, Small Business Development Centers can be a tremendous resource for established businesses. "[They] can be part of your management team," says Urbach. You may also find low-cost and no-cost help from local colleges and universities, chambers of commerce, and economic development organizations.
43. Create a budget and cash flow forecast. Force yourself to sit down and make realistic projections of your income and expenses. This will give you a tool with which to measure your progress and guide your overall growth plan.
44. Understand and review your financial reports at least once a month. "If you don't understand your financial reports, you won't really understand what's happening in your company," says Urbach. Ernst & Young's Norman suggests either taking a class or asking your accountant to give you a one-on-one lesson on the basics of understanding and using your financial reports.
45. Bank like a business, not a consumer. Whether you are a corporation, partnership or sole proprietor, maintain separate bank accounts for your business and personal funds; it makes record-keeping easier and gives you a more professional image. Develop a relationship with your banker; introduce yourself and find out what services the bank offers that could help your business. Banking is very competitive these days, so make sure your bank is earning your business.
46. Establish and enforce credit policies. Don't get so excited about a large order that you fail to use sound judgment. "It doesn't do you any good to make a big sale if you don't get paid for it," Norman says. "Complete a credit application on every customer, and consider how much risk you are willing to take, then set your policies accordingly." Be sure your invoices are easy to read and that the amount due and the terms are clearly stated. And get your invoices out in a timely manner--that, says Norman, is one of the best ways to ensure you'll get paid.
47. Stay current on technology you can use. Take the time to research advances in computer and other equipment technology so you can make informed decisions on upgrading your own systems.
48. Be aware of the risks of buying equipment with multiple functions. A printer/copier/fax combination may save you both money and space, but if it breaks down, you'll be without three pieces of equipment while it's being repaired or replaced. Although it's an excellent device, don't rely solely on it.
49. Develop self-discipline. Not only do you need the discipline to work when other tasks (such as yard work or grocery shopping) are competing for your attention, but you also need the discipline to stop working and create balance in your life. "To be more productive, sometimes you have to stop," Urbach says. "If you continue, you'll tire yourself out, and nothing will get done. Sometimes you have to walk away and take care of yourself--mentally and physically--and then come back to work."
50. Set and keep business hours. Most homebased business owners work too much, risking burnout. "Setting and keeping business hours is a great tool to increase focus and productivity," Pennington says. "Work expands to fill the time allotted, and keeping regular hours helps [keep you on track]. Also, homebased businesses that work with traditional companies need regular hours to let their clients know they are serious about being in business. Otherwise, you might look like a [hobbyist] instead of a [business owner]."
51. Maintain your integrity. As homebased businesses struggle for acceptance in the traditional business world where big offices and other material trappings are often considered signs of success, integrity is essential. "Relationships built on trust are more important today than ever before," says Pennington. "Integrity in word and deed is the basis for long-term trust. Maintaining absolute integrity in your products, services and relationships will help you as an individual, and other homebased businesses as well."
Ernst & Young LLP, 1 SeaGate, Toledo, OH 43604, (419) 321-5470
Oklahoma Small Business Development Center, 115 Park Ave., Oklahoma City, OK 73102, (405) 232-1968
Pennington Performance Group, (800) 779-5295, http://www.penningtongroup.com