Is a Home-Based Business Right for You?
The dream of working from home is alive and well, and even being realized by a growing number of Americans today. According to the Small Business Administration (SBA), more than half of all United States based businesses are “headquartered” from the owner’s home, and why not? Most home offices today can easily be equipped with everything that a traditional workplace requires.
So can you work from home and stay in your pajama’s all day? Probably not, but you can launch your own home-based business and tap into the resources and experiences of literally thousands of home-based business warriors.
And just like any other worthwhile endeavor, there are pros and cons. Despite what you might hear or read, every business–no matter where it is operated–is a mixture of positives and negatives.
Your Home-Based Daily Commute
Your daily commute to work no longer exists. Not having to leave the house an hour before work actual starts and then suffering through that same commute home is a huge time-saver. This time can be used to build your new business or even to enjoy the fruits of your labor.
Sound perfect? Well, you may want to consider that you now literally live at your place of work. Living at your place of business can wear thin on anyone, but if you plan carefully (and stick to your plan) you can help keep your work life and family life separated. Having a single-purpose home office or work area can be a big help, so if you are going to work from home, have a designated workspace.
Your Start-Up Expenses
Leasing office or retail space to operate your business can be both expensive and time consuming. At times, finding the right location can feel like a fulltime job. Most home-based business owners will admit, however, that having an office outside of the home–free of all distractions from their surrounding personal lives–can make the business owner feel more like, well, a business owner. They can feel more accountable to their business, and often find it easier to maintain “normal business hours.” It is not uncommon for home-based business owners to work throughout the day and to infuse their “work time” into their “personal time.” If you’re not mindful about this separation of work and play, you can feel like you’ve worked all day, when in fact you may have only worked five or six hours that day.
Friends, Family, and Neighbors
These people make up a big part of your life, so you may want to brace yourself for a mixture of comments, concerns, questions, and even some well-meaning doubts about what you are doing. And that is normal and to be expected. The mindset of a non-entrepreneur can often be a toxic influence on you and your new venture.
This is true for home-based, retail, mobile, retail, or any other type of business. The people in your life may or may not fully support your decision to work from home on your new business. Some just won’t get it and you’ll probably get your fair share of unproductive comments. You may need to remind people that Apple, Ford, and a host of other household names started at the founder’s home and that it is always easier to be a critic than a producer!
At some point every self-employed person has said, “Being self-employed is great, but my boss is a real jerk.” Trust me, you’ll also end up saying this before your new business reaches its second anniversary.
And it will be true at times. Some people have a natural drive to achieve goals, while others require defined goals with specific deadlines attached. When you run your own business you are your own boss, and you’ll have to learn to gauge your efforts and decisions as objectively as possible. You’ll be in charge of yourself and all of the good and bad decisions you choose to make.
Franchising vs. “Going in Alone”
Adding structure to your life and increasing your odds of success through franchising is a very common approach. When you join a home-based franchise system, you’ll typically receive a turnkey and proven business model, a clearly defined “to do” list that has been refined and updated repeatedly, and accountability to a third party–the franchisor.
In virtually all home-based franchises, the franchisor has a vested interested in getting your sales volumes higher as they share in a percentage of your gross sales. As a rule of thumb, the franchisor will collect anywhere from four percent to up to 12 percent of your gross sales each month in the form of “royalties.” For this fee they will offer you coaching sessions, ongoing support, access to suppliers, and a host of other services to help you open and operate your business.
You may be held accountable to reach certain goals and be forced to meet minimum requirements. While these might be some of the very reasons why you want to leave your current job and start a business in the first place, please know that these requirements are there for a reason–to help you succeed. And yes, you will still have to work hard, think smart, and face challenges on a daily basis.
You also won’t have complete say in how you operate your business, but someone who already knows your business first hand will guide you. Let’s say that you have business ownership in your blood and a passion for hard work, followed by great success. Let’s also assume that you recognize the value of joining a successful and structured franchise system to help you launch and operate your business. You now need to start reviewing home-based franchise options. Let’s take a look at a few options.
Home-Based Service Models
These franchise models can range from providing lawn-cutting services to window treatments, or even custom patios or garage storage systems. As the owner-franchisee, more often than not your daily activities will be sales and customer service orientated, which means that you’ll have to find either employees or third party contractors to perform the actual installation of that custom patio or to design and install those custom drapes your customer ordered. For example, the owner of a home-based flooring franchise doesn’t typically install the hardwood floors they’ve sold to a customer–they hire an installation crew to do this, which allows them the time to sell more flooring.
Another growing category in home-based franchises is the “staffing model.” Staffing models are often clearly defined as “staffing,” but they can also include senior care models where local franchisees assist in finding qualified home helpers to assist seniors with their non-medical daily living. Most would call these models “senior care,” but the daily activities of the franchisee often mirror those of a staffing agency.
Another growing segment of home-based franchises is the Business-to-Business (B2B) model. Rapid advances in technology have largely leveled the playing field when it comes to selling services to other businesses. B2B franchises fully leverage these advances to allow their franchisees to present themselves with as much, and often more, tools and services than larger organizations. Your clients will see a well-trained resource (you) backed by an established and well-run organization (the franchise you joined) as their potential service provider.
One example of a home-based business I am extremely impressed with is Outdoor Living Brands. The parent company to four separate brands, all of which offer outdoor services to residential and commercial properties, founder Chris Grandpre has worked to acquire the four brands with essentially the same clientele. This allows each business to cross-promote each other and potentially service the same customers, creating more revenue for each individual brand. As a ten plus year industry professional, I am extremely impressed with their franchise offerings. After spending an entire day at their corporate offices earlier this year, I left with an increased appreciation for who they are, what they do, their passion for their brands, and their commitment to their franchisees. And the services their franchisees provide to their customers make a lot of sense, and add real value to their lives. I’ve studied and met with hundreds of franchisors over the years and I can honestly say that I would consider any of their brands for my clients.
There are pros as well as cons to every type of business, and home-based businesses can be extremely rewarding for those who can manage themselves, their expectations, daily schedules etc. The added support and accountability provided through joining a franchise can help reduce your start-up time and financial missteps while providing you with virtual co-workers and support staff. Franchisees have the ability to pick up the phone and ask someone who truly understands their business for help. Sure, you’ll pay for this help through royalties, but in the long run it may be the difference between success and failure, so you should weigh this out carefully.
So, can you be successful in your own home-based business? The only honest answer is “Maybe.” Most industry professionals would agree that the average first time business owner would benefit greatly from having the seasoned support of a franchisor to help them launch, market, and operate their business–despite any fees charged for this help.
As with any business, you should carefully consider your strengths and weaknesses before you start any endeavor. For it is you, the business owner, who will make it a success or a failure!
Peter Casey is a Founding Member of the International Franchise Professionals Group, (IFPG) which is an organization that consists of hundreds of Franchise Professionals. The IFPG connects established Franchises with professionally trained Franchise Brokers, Coaches, Consultants, Lawyers and other Franchise Professionals to help expand their franchise development. To learn more about how the IFPG can help you succeed in franchising, please visit www.ifpg.org