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Make millions, from your living room!
Leslie Taylor, Inc.com | January 04, 2007
A bold claim, perhaps. But new technology and opportunities make it easier than ever to start a lucrative business at home.
If you find yourself on the couch this holiday season, dreading your return to work, or if one of your New Year's resolutions is to never again take abuse from your boss, perhaps 2007 is the year you finally start your own business. The good news is, today it may be easier than ever.
Gone are the days when a fledgling business required a large investment of start-up capital. With a phone, a computer, and a great idea, it's possible to join the legion of people who have started businesses from home.
Home-based businesses now comprise almost half of the estimated 26 million small businesses nationwide, according to an analysis of Census Bureau data. New technologies have made it possible for a solo entrepreneur to begin a business that once would have required the resources of a much larger organization. Thanks to new tools, the range of home-based industries stretches far beyond consulting or even eBay businesses.
Many solo entrepreneurs are finding success with service businesses, particularly those that cater to specific demographics, such as overworked professionals, children, or the elderly. A business caring for the elderly or teaching enrichment programs for children can easily be operated out of the home, as can businesses that provide support for busy people, such as a personal chef or weight-loss counseling business.
"Service businesses can be more fluid and flexible than retail businesses because they do not have the challenge of sustaining inventory," says Terri Lonier, author of Working Solo and founder of workingsolo.com. "Because they are not tied down with manufacturing or inventory costs, service businesses can be more responsive to the market."
Within the service industry, there is a growing need for businesses that provide specialized support services to other small-business owners. A small business may not be able to afford dedicated accounting, tech-support, or human-resources staff, so many solo entrepreneurs can fill a niche by providing outsourced services.
The ability to effectively provide an outsourced task to a larger company is possible thanks largely to the connectivity the Internet has provided. The Web also lets many other kinds of entrepreneurs reach people who need their niche products or services.
"I don't think we would see as many micro-businesses as we see today if it weren't for the Internet," says Gene Fairbrother, lead small-business consultant for the National Association for the Self Employed.
Low-cost, Internet-based tools are currently driving the home-based business boom, says Bruce Judson, senior faculty fellow at Yale School of Management and author of Go It Alone: The Secret to Building a Successful Business on Your Own. "It is literally now possible for an independent businessperson to rent, for $20 a month, software capabilities that were only available to Fortune 500 companies a few years ago."
Solo entrepreneurs can now create databases, manage e-mail lists, or do sequenced mailings at reasonable costs. Communication technologies, like VoIP phone service and online conferencing make it easy to create a home-based office with full-service functionality.
Such technologies are also making it possible for entrepreneurs to do business anywhere -- even remote, rural locations. In one example, a recent study found that eight of the top 10 most active eBay communities for buying and selling were small towns, not major cities.
In addition to providing tools that help entrepreneurs run their companies, this technology has also opened the door to new business models.
"What the Internet does is naturally disaggregates," Judson says. Business owners can package and sell their special skills a la carte, while consumers can do business with several small vendors, and purchase only the services they need.
"The Internet is absolutely one of the hottest markets for people to intelligently capitalize on," Fairbrother says.
With one major caveat, however. "Just because you build a website doesn't mean you're going to be successful," Fairbrother cautions. "It takes traditional business sense to succeed on the Internet."
"Nowadays, with websites costing $3 a month, you see a lot more scams," Lonier adds. "You see a lot of people who want to sell you information about how to have a successful business. You need to look at the track record of the person selling their advice or their business plan and determine whether it is really a broad enough based solution."
Lonier counsels would-be entrepreneurs to select the industry that is right for them, before purchasing or beginning any venture.
"The best business ideas spring from an individual's experience as well as their passion," Lonier says. "While [a new entrepreneur] should be aware of trends in the marketplace, it can be very dangerous to decide to start a solo business just because a certain industry is hot."
That said, Lonier notes that many of the industries that are "hot" right now are those that specialize. "The businesses that prosper are those that are not out to be number one in the world, but that identify and cater to a narrow niche which they can serve well and grow with over time."
"The key is to be super-focused on one thing," Judson adds. "Do what you do best, and let someone else deal with the rest."
Judson also advises people embarking upon a home-based business venture to not rush the start-up process. "If there is any way to do so, get any piece of [the business] up and running before you leave your day job. If you start your business on the side, you can work on it until you know, as much as is possible, whether your idea is going to work."
"What I hear from people who have been successful is 'I quit my day job when I didn't have time to sleep,'" Judson says. "But many people would trade six months of less sleep for a chance at a new life."