It’s estimated that about two-thirds of homeworkers are people running their own businesses. Starting your own business at home is an attractive option if you are a parent wanting to fit work commitments around family, or if you are an employee who is under threat of redundancy or tired of corporate life. Setting up at home keeps your costs down while you test the market and find out if there is a demand for your product or service, and if you are suited to being your own boss.
What kind of business could you start?
There are a number of ways of becoming self-employed and they don’t all involve having a brilliant and ground-breaking new business idea. We’ll look at each option in turn and you’ll find sources of more information in Resources at the end
Buying a franchise
When you buy a franchise, you buy the permission to operate a business that has already proved successful elsewhere, so franchising is often considered a safer way to go into business than starting from scratch. Many high street names operate as franchises, including Clarks shoe shops, Kall-Kwik printers, and Toni and Guy hairdressers. The cost of the franchise may include items such as operating manuals, stock, processes, systems, and stationery. All this does, however, come at a price and you will lose your investment if the business fails. So it pays to do extensive research into your chosen franchise before committing yourself and to remember at all times that the less scrupulous are more interested in getting their hands on your fee than in helping you succeed.
Buying an existing business
Taking over a business that has been up and running for a while might seem like a tempting prospect, but you need to do thorough research and negotiate the purchase price carefully to avoid being sold a white elephant. Decide before you start looking what kind of business you want and how much you can afford to pay
Direct selling, network marketing, multi-level marketing (MLM), party plan
Direct selling means that the manufacturer sells direct to the customer with no retail middle man. As direct selling can easily be done from home on a part-time basis, it is an obvious choice for mothers and for employees wanting to start a small business while keeping on the day job. Sales can be made the door to door by dropping off a catalog and returning later to collect orders, as you will know if you have ever had an Avon or Kleenexes brochure pushed through your door.
With stories regularly cropping up in the press about a geek with an internet idea making a million overnight, this can seem a tempting prospect for the homeworker. The word ‘geek’ here is a clue – unless you are passionate about IT and possess the appropriate skills, it’s going to be a struggle, and paying someone else to do the technical stuff can get very expensive. If you have a brilliant idea, teaming up with an IT specialist can be an option, but bear in mind the points about partnerships made below.
Depending on your chosen business, your activities may be regulated by an association in terms of entry requirements, ongoing training, licenses, certification, complaints procedures, and so on. You will normally be required to pay an annual subscription to join once entry requirements are met, but this is often a good investment. Professional associations often offer their members discounts on insurance and cheap or free legal advice.