10 Booming Homebased Businesses
This story appears in the July 1997 issue of Startups. Subscribe »
Looking for a reason to start your new business from the comfort of home? How's this for encouragement: Homebased business is one of fastest growing segments of the entrepreneurial economy. More and more people are leaving behind the traditional definition of the formal office and are starting up the businesses of their dreams from their home offices.
In fact, the U.S. Bureau of Labor Statistics estimates that there are now more than 18.3 million homebased businesses in the United States. You, too, can be part of this growing shift towards homebased entrepreneurship, and we've got 10 great ways for you to start.
Personal Organizer
If you've got a knack for neatness and a penchant for planning, why not make clutter your cause and become a professional organizer? You certainly won't be alone: Membership in the National Association of Professional Organizers (NAPO) increased 15 percent in the last year and has nearly doubled since 1993.
"I love the organizing process and the benefits that people get from it," says Stephanie Denton, a NAPO director and the owner of Denton & Company, a professional organizing firm in Cincinnati. "I gradually realized that organizing-something that not everyone has the inclination or desire to do-was something I could teach to other people."
In 1994, Denton started her business by working in residences, organizing anything that pertained to running a household: paperwork, closets, kitchen items, etc. Now, she also works with corporate executives and businesses, organizing anything that falls under the categories of paperwork, space, time and interpersonal communications.
"It's not uncommon for me to work with several people within one company," explains Denton. "As one person starts to reap the benefits of being organized-as their stress or frustration level decreases or their productivity increases-and people notice, then others want to work with me, too."
Working from a designated work space within her home, Denton is able to set appointments, write columns about organization for newspapers and magazines, and complete her daily paperwork. But the highlight of working from home, she says, is following her own schedule. "The scheduling flexibility is unparalleled," says Denton. "Some people are real morning people who hit the ground running, while some people are more creative later in the day or evening. If you're working from home it's easier to mesh your personal and professional life so that you create an environment and lifestyle that works best for you."
Hot Resource:
National Association of
Professional Organizers
1033 La Posada Dr., #220
Austin, TX 78752-3880
(512) 206-0151
Network Marketing
Network marketing is in its 'momentum phase,' where we're going through a large amount of growth very quickly," says Rod Nichols, author of Successful Network Marketing for the 21st Century (Oasis Press, $14.95, 800-228-2275). Through his research, Nichols found that 50,000 new distributors join network-marketing opportunities each month. What are the hot opportunities? Industries catering to baby boomers: nutrition, skin-care products, and health-related products. "With 72 million baby boomers approaching their later years, health is a key issue."
Daren Falter was bitten by the network-marketing bug while a college student. "It consumed me," says Falter. Since 1990, he has pursued network-marketing opportunities in telecommunications services, wholesale-buying clubs, and water filters. "I really wanted to earn a six-figure income and not work 60-plus hours a week. The way to do that was to build a residual income, which is ongoing income for work done in the past."
From his homebased business, DC Falter Marketing in Lacey, Washington, Falter now works an independent distributor for Usana, a company that manufactures and distributes high-quality vitamins, anti-oxidant minerals, and personal-care and skin-care products. Falter built his thriving Usana distributorship almost entirely through mail order advertisements. About 20 percent of his marketing efforts were made through personal contacts and recruitment of distributors via the Internet.
Falter's formula for success is simple: "Find someone you relate to who is successful and copy how he runs his business." He also suggests carefully researching companies, which he did before selecting Usana in 1994. Falter scrutinized each company's compensation program, management style, record for integrity, and reputation for helping new distributors succeed. "There's good information available from Dun and Bradstreet, the Better Business Bureau, and your state's attorney general's office," he notes.
Hot Resource:
Multi-Level Marketing International Association
1101 Dove St., #170
Newport Beach, CA 92660
(714) 622-0300
Mystery Shopping
As more small businesses open each year and competition in the marketplace grows more severe, the golden rule in business remains clear: The customer is king. So how can you make sure your customers are being treated like the royalty they are?
Vickie Henry, CEO of Feedback Plus, a national mystery-shopping company, started her company to help businesses find out. "Feedback Plus is built on the belief that actually becoming a customer-and evaluating how customers are treated when they shop at your stores-gives valuable insight for action toward improving customer satisfaction," she says. Feedback Plus sends independent contractors to pose as customers in retail stores and restaurants and banks, who then report on each company's level of customer service. With a roster of more than 72,000 mystery shoppers and more than 25 years of experience, Feedback Plus has grown into one of the giants in the mystery-shopping industry.
When Nina Lovell, a former critical-care nurse in Rome, Georgia, began looking into starting her own mystery shopping business in 1995, she immediately noticed Feedback Plus's giant presence in the marketplace. So instead of trying to beat her competition, she joined them.
As owner of Healthcare Matters Inc., Lovell now works as an independent sales representative for Feedback Plus, brokering its mystery shoppers to health-care companies such as hospitals, physician offices, rehabilitation centers, managed-care companies, and nursing and retirement homes.
"Health care has become a retail business," says Lovell, "and each company's success is now driven by patient choice. Health-care providers realize that their future depends on their ability to deliver more than just good clinical care."
Healthcare Matters Inc.'s main focus is to provide reports on the quality of service provided in these institutions. "We're not assessing clinical quality-did they order the right medicine or handle the X-ray process properly?" says Lovell. "We simply want to know how the customers are treated when they're there."
Hot Resource:
Feedback Plus Inc.
5580 Peterson Ln., #120
Dallas, TX 75240-5157
(972) 661-8989
Career Coach
Basketball courts and football fields aren't the only places where professional coaches are in big demand. They're also hot in the business world, where career coaches help direct downsized employees into new jobs and counsel corporate executives on becoming entrepreneurs. Last year, U.S. News and World Report ranked career and personal coaching as one of the nation's hottest consulting activities, second only to management consulting.
"The growth in coaching is tremendous," says Jeff Raim, International Coaching Federation (ICF) president. "In a little more than two years, ICF's membership went from 500 to 2,900 members."
One such member is Diane Menendez, who started High Performing Systems Inc. from her Cincinnati home. Previously, she spent a decade as an employee of AT&T and Federated Department Stores, where she helped prepare management executives for key moves up the corporate ladder. "You could say I groomed the big guys for success," says Menendez, whose educational credits include degrees in counseling and organizational psychology.
When Menendez started her business in 1988, her clients were large corporations. In 1994, when clients began experiencing career changes and asked for help, she moved in a new direction, and today counsels up to 30 individual clients at any one time on career-transition issues. "It's extremely gratifying work," she says. "My clients know I faced similar issues with my career, so we share many of the same experiences."
Where can you get training as a career coach? Coach University in Houston is a "university without walls" that trains coaches via the phone and the Internet. ICF provides a job-referral service and conducts an annual membership conference.
Hot Resource:
Coach University
115 South 1100 East, #806
Salt Lake City, UT 84102
(800) 48-COACH
Adventure Tourism
Never mind low-energy hammock swinging and lethargic poolside lounging-more and more office-bound Americans want to climb, hike, river-raft, free-fall, and be physically active during their hard-earned vacation time.
Want proof? According to Jerry Mallett, president of the Adventure Travel Society in Englewood, Colorado, more than $110 billion is spent on adventure travel each year. In addition, another $100 billion is spent on the outdoor recreational equipment that goes along with vacationers on their trips.
Terry O'Connors is the owner of Rogue Excursions Unlimited Inc., an adventure tour company in White City, Oregon, that organizes river-rafting and fishing trips primarily on Southern Oregon's Rogue River. Since he started his operation in 1982, O'Connors has noticed that competition for adventure tourism customers has become fierce.
"Because people have so many more choices these days, customer service really comes into play," he says. "We've had to become more aware of catering to our guests and their individual needs. The modern-day customer needs a little more pampering and care than the old-school customers did. For example, there are a million different brands of beer and soda out there, so you've got to do your homework prior to the trip to find out what they drink. The fly fishermen want to use the exact weights of rods and lines they're used to, so you better find out where they're coming from, too."
Adventurers attending a Rogue Excursions trip only need to bring themselves, their clothes, and, if they're going fishing, a current fishing license. O'Connors takes care of the rest-making lodging reservations and transportation arrangements, collecting deposits, adjusting equipment, organizing meals, and planning routes-from his home office.
So, after 15 years of leading tours, how does O'Connors keep energized? "The river does it!" he explains. "It's a different person every time you see it. The different water heights require different boating skills, and the seasons and wildlife change. If it's boring to you, you're in the wrong profession. The off-the-river duties get old, but if you've done your homework right, once you hit the river it's a piece of cake."
Hot Resource:
Adventure Travel Society
6551 S. Revere Pkwy., #160
Englewood, CO 80111
(303) 649-9016
Home Care For Elders
"Public demand for home health-care services is at an all-time high," says Margo Gillman of the National Association of Home Care (NAHC). "This is due to an aging population, patients being discharged earlier from hospitals, and new medicines and technologies which make it easier to provide highly skilled at-home care." In 1996, she notes, Americans spent $36 billion for home health care, which is $9 billion more than in 1995. Today, more than 18,500 businesses deliver home-care services, up from 17,000 in 1995.
One of those entrepreneurs is Judy Rosen, a former educator in Roswell, Georgia, who founded Friend of the Family in 1984 to help families secure quality child and elder care. She's since moved her homebased business to an outside office, where 15 employees place 100 caregivers per day in temporary jobs and a dozen caregivers each month in long-term assignments. Rosen estimates her company's growth rate at 15 to 20 percent annually. In 1996, gross revenues reached $900,000.
"Our business is grown mostly by word-of-mouth," says Rosen, who acquires 100 new clients every month. "We're trying to keep up with the demand. The only thing impeding our growth is the difficulty of finding quality caregivers." To maintain her standards of excellence, applicants undergo a series of assessment tests, including CPR and a four-hour orientation on safety and professionalism. "Our caregivers don't need to have a medical or nursing background. Their duties are what we call 'assisted living.' They help elderly clients with bathing, dressing, opening the mail, light housekeeping, monitoring use of medications, and other related tasks." Her staff checks references as well as driving and criminal records.
To help entrepreneurs start their own home-care placement agencies, Rosen has developed a business opportunity called Family Friend Management Systems. For $14,500, you receive the software, training in running the software program, and all documents necessary to start your own home health-care placement agency similar to Rosen's model.
"A home-care placement agency is a great homebased business. I ran mine from my home for 12 years," says Rosen. "You need proper space to dedicate to your business, which means a separate area to interview applicants, make phone calls, and maintain client records."
Hot Resource:
National Association
for Home Care
228 7th St. S.E.
Washington, DC 20003
(202) 547-7424
Specialty Catalogs
Open your mailbox and what do you see? Aside from bills and advertisements, chances are, there's a catalog in there.
It's no surprise: Catalogs are hot. And if you've got a unique product that has a wide market demand, they can be a great way to start a homebased business. According to the Direct Marketing Association, catalog sales generated $74.6 billion in 1996. During that same year, an estimated 389,300 jobs were generated by catalog companies in the United States.
Denise Carpenter, owner of Victorian House in Janesville, Wisconsin, has seen firsthand how popular specialty catalogs have become. Over the past seven years, her company's catalog has grown from a single-page, black-and-white flier into a 12-page, four-color catalog, offering reproductions of Victorian-style wedding, birth and baptism certificates. In addition to the 13-by-17-inch certificates, the catalog also features Victorian-style thank-you notes, wedding program covers, invitations, birth announcements, place cards and stationery.
Carpenter, a mother of three, enjoys the flexibility of working from home that allows her to volunteer her time at her children's school activities. "I've found that with call-forwarding and a cellular phone, I can take the kids to the zoo and just have to walk off to the side to take an order once in a while," she says. "There I am, with a bunch of third graders, when my pocket rings in front of the lions' cage, and I'm taking an order from California for Victorian certificates."
Hot Resources:
Direct Marketing Association
1120 Ave. of the Americas
New York, NY 10036-6700
(212) 768-7277
Internet Consulting
Computer consulting isn't anything new. But teaching others how to navigate the Internet and design and manage a Web site is the hottest niche in the industry. Doug McBride, executive director of the Information Technology Training Association (ITTA) in Austin, Texas, says, "Internet training didn't exist three years ago. Now we anticipate more than $1 billion in revenues by mid-1998 for computer-training companies offering Internet training."
Steve Arbitman is one such homebased entrepreneur who's answered the call for Internet consulting. After 20 years of working for government and nonprofit agencies in Washington, DC, he decided to turn his knowledge of data processing and computer programming into a business-Internet Marketing Associates.
To attract clients, Arbitman decided to teach computer classes at Mt. Airy Learning Tree, an open university near his Glenside, Pennsylvania, home. "It's a great way to make contact with people and get new clients," says Arbitman. "I was automatically identified as the expert, so if students needed something more, they hired me as a consultant."
Arbitman used his teaching experience to convince Mobil Oil Co. he was the right person to help employees of downsized companies brush up on their computer skills and learn how to use the Internet as a research tool and job-hunting resource. Today, Arbitman works with individual clients, corporations and associations alike, and conducts seminars such as "An Internet Tour" and "Doing Business on the Internet."
Hot Resource:
Information Technology
Training Association
8400 N. Mopac Expwy., #201
Austin, TX 78590
(512) 502-9300, ext. 105
Medical-Billing Services
What do physicians, dentists, physical therapists, chiropractors, hospitals and pharmacies have in common? They're all potential clients of an electronic medical-billing service, which files medical claims and bills clients for services.
"More health-care providers are realizing it's faster, more economical and more efficient to outsource their billing needs," says Gary Knox, a consultant with AQC Resources, a medical-management-systems consulting firm in San Jose, California. Where's the greatest need? Physicians and dentists, says Knox. "Currently, only about 40 percent of physicians' claims and 12 percent of dentists' claims are handled by outside billing firms," he explains.
Merlin Coslick recognized the market potential for his services in 1990, when he launched his homebased business, Electronic Medical Billing Service, in Watchung, New Jersey. "I had developed computer skills as a stockbroker and wanted to combine them in a business with a long-life potential," says Coslick. "With the growing trend toward computerizing standard business operations, like client records and billing, and the growing consumer demand for health-care services, I felt that a business combining computers and health care would have a long life span."
To attract clients, Coslick launched an aggressive marketing campaign, which included making cold calls and mailing letters, brochures and postcards to doctors' offices. One client led to another, and soon Coslick was operating a thriving medical-billing service.
"Within the next four years, we will see wholesale acceptance of electronic medical billing," he says. "Those who enter the business now will be the specialists and consultants to whom the medical practitioners turn for help." From his experience, Coslick says that a medical-billings specialist processing 300 insurance claims per month per client should expect to gross $10,000 annually per client.
Hot Resource:
Electronic Medical Billing
Network of America Inc.
P.O. Box 7162
Watchung, NJ 07060
(908) 757-1211
Crafts
The Association of Crafts and Creative Industries (ACCI) in Zanesville, Ohio, estimates that the crafts industry now generates close to $10 billion in sales annually. Julie Fox, ACCI's executive director, says that, in the past three years, a growing number of the companies contributing to these sales-both in the United States and abroad-is doing so from home.
Interestingly, crafts for the home made in the home are cornering the market lately. "Two crafts themes are especially popular right now," says Fox. "The first is anything for home decor-for instance, making pillows to match a valance to match a picture frame. The second is scrapbooks and memories-picture frames, decorative keepsake boxes and do-it-yourself kits to make these items."
The do-it-yourself spirit is certainly alive and well in Max Wong and Tanya Hekimian-two jewelry artists who design, assemble and sell hand-crafted necklaces, bracelets and earrings from their homes in Los Angeles.
"I saw a necklace in a catalog that I really wanted to wear for the holiday season, but it was beyond my financial resources," explains Hekimian. "So I told Max about it and she said, 'Let's just go to the bead store and make it!' " Once the women found a way to create a replica of the necklace-which was being sold for $75 in the catalog-for only $2, the idea for their jewelry business, Chickadee, was born.
Hekimian and Wong, who both hold full-time jobs in the entertainment industry, started Chickadee in 1995 by investing about $1,000 each for supplies, tools, business cards, packaging and gift-wrapping materials. Now, in their spare time, the two sell their designs at jewelry parties, through custom orders and in upscale boutiques around town.
"About 30 percent of our sales are from custom orders," says Wong, "but most of our revenue is generated through our jewelry parties." At these events, which operate much like Tupperware parties, the host provides refreshments, a partial mailing list of attendees and the gathering space. Wong and Hekimian, who also invite their roster of regular clients to these parties, then arrive with the jewelry, make sales and take custom orders.
To attract new clients and to keep their regular customers devoted to their products, the Chickadee owners place particular importance on keeping their designs fresh and innovative. "We've recently been experimenting with designs that incorporate unique materials," says Wong, "such as Czechoslovakian glass and antique beads-items that are no longer made and were originally made by hand."
Ultimately, Wong and Hekimian would like to be able to display their creations in a greater selection of retail locations around town and expand their business into an operation with a production staff.
Hot Resource:
Association of Crafts
and Creative Industries
P.O. Box 2188
Zanesville, OH 43702-2188
(614) 452-4541
Contact Sources
AQC Resource, 175 N. Buena Vista Ave., San Jose, CA 95126, (408) 295-4102.
Chickadee, 3848 1/2 Valleybrink Rd., Los Angeles, CA 90039.
DC Falter Marketing, 596 Malibu Dr. S.E., Lacey, WA 98503, (360) 491-7551.
Denton & Co., 2618 Observatory Ave., Cincinnati, OH 45208, (513) 871-8807.
Friend of the Family, 880 Holcomb Bridge Rd., #160B, Roswell, GA 30076-1999, (770) 643-3000, ext. 200.
Healthcare Matters Inc., 607 Broad St., #110, Rome, GA 30161-3059, (706) 234-6442.
High Performing Systems Inc., 400 Oak St., Ste. E-3, Cincinnati, OH 45219,
(513) 474-1137.
International Coaching Federation, P.O. Box 1393, Angel Fire, NM 87710, (888) 423-3131.
Internet Marketing Associates, 8714 Patton Rd., Glenside, PA 19038, (215) 233-9004.
Rod Nichols, P.O. Box 912, Tacoma, WA 98401, (206) 564-0284.
Rogue Excursions Unlimited Inc., P.O. Box 2626, White City, OR 97503, (541) 826-6222.
Victorian House, 1203 Columbus Cir., Janesville, WI 53545, (608) 758-9050.
