Making Home Business Good

By Katherine Reynolds Lewis
c.2004 Newhouse News Service
Photo by Jane Therese

Troll the Internet for home-based businesses and it starts to feel like a graveyard tour.

The Web sites follow similar formats, with catchy names and professional appearances. You're urged to buy baby slings and clothes, hire a personal chef, sign up a virtual assistant, or send gift baskets to your best clients. But dig deeper and you find many of the links are broken, testimonials are "under construction," and e-mails bounce back, user unknown.

These are the remnants of many a parent's dream: an at-home business that minimizes your work day and maximizes your hours with young children.

In reality, creating a business takes more time, money and hard work than you might imagine. Even some who turn a profit concede that compensation borders on minimum wage.

"A lot of people who work outside the home perceive it to be very easy and very relaxed, and it's not," said Shelly Howard, 31, of Clinton Township, Mich., who sells kid-friendly recipes at www.munchkinmenus.com.

"I'm not ever done until I go to sleep," explained Howard, who has a 2-year-old son. "Trying to do that and raise a family and be a good wife is difficult."


Still, millions of Americans pursue the payoffs, which include control over schedules and pride of ownership.

"It's great to experience our own independence and our own sense of non-mommyhood and non-wifehood," said Susie Little, 36, a mother of five in Fredericktown, Ohio, whose company, Natural American Home, sells organic cotton mattresses, hemp diapers and other baby products.

According to the U.S. Small Business Administration, there were about 13 million home-based businesses in 2003, up from an estimated 10 million in 1992.

The Internet's expansion fueled an influx of entrepreneurs who use the Web's vast resources to research business ideas, network and market their wares. Parents, in particular, find it easy to fit business via e-mail into kid-filled days.

But the Web-based model is deceptively simple. You can sit down at the computer to post a few ads and check in with networking groups, only to realize it's 4 a.m. and nothing you've done will bring in money.

"Just because you have a Web site doesn't mean it's a successful Web site," said Ellen Parlapiano of Scarsdale, N.Y., co-author of "Mompreneurs."

Experts say the best small businesses stem from the owner's passion about the service -- be it cooking, crafts or consulting -- and fill a niche where there isn't much competition.

Gason Yen Nelson is a case in point. He worked as a restaurant chef for 12 years before his son's death from cancer in 1998 prompted him to start a personal chef business based in New Orleans.

"I believe my purpose in life is to cook," said Nelson, 35, whose wife and 13-year-old daughter often come with him on jobs. "I love it."

After three years, Nelson was able to support himself on the income from "Full of Flavor." He made $55,000 last year cooking for clients such as a bishop and a professional football player.

You should avoid the temptation to spend too much time or money up-front. An important first step is to research your potential customers and your likely income and expenses, including child care, advised Priscilla Huff, the Sellersville, Pa.-based author of "101 Best Home-Based Businesses for Women."

Working at home with children doesn't replace child care, especially on days when you're meeting clients or vendors.

After Erin Porch's fourth child was born last October, she fell behind the pace of sales from her Web site, www.theslinglady.com, based in her Douglassville, Pa., home.

"I was spending so much time at night trying to pack these orders," said Porch, 28, who dealt in baby slings and pacifiers. "There weren't enough hours in the day to do that and take care of the kids. ... My house was cluttered. My social life with my husband at night suffered."

Porch sold the company for $2,500 to another at-home mother. Looking back, she misses the satisfaction of running a business. But the seven to 20 hours of work brought only $100 a week in profit.

"When you really look at it over the amount of hours I spent, it was slave labor," she said.

If possible, start on a trial basis to test the market. Get professional help in writing a business plan or setting up accounting systems from groups such as SCORE, a network of experienced executives who volunteer their time. The Small Business Administration's centers for women business owners and small businesses are also a good resource, Huff said.

Put down on paper exactly how many hours you'll be available to work, what you hope to earn and what your startup costs will be, Parlapiano said. Be realistic about how many months -- or years -- you can afford to invest before turning a profit.

You may find that the economics don't work out the way you'd like. Someone who leaves a career in law or public relations won't match her previous income by mystery shopping or making baby books, Parlapiano said.

When Howard first started working from home, she sold weight-loss products. She sank $1,000 into fliers and products before quitting. With her own menu business, she makes about $5 an hour, working six hours a day. Her goal is to earn $20 an hour.

Little's company, www.babyhemp.com, has sold 35,000 diapers known as "Hempers" over the past six years. She works 40 to 60 hours a week and last year made about $15,000 in profits.

"Would I like to have a regular paycheck? Oh yeah," she said. "I really would want some big company like Procter & Gamble or Huggies to come in and buy my name so I could pay off my house and focus on home schooling and organic farming."

It's also easy to underestimate how much time you need to spend marketing and networking, time that doesn't immediately result in sales.

Molly Remington, 42, is aiming her personal chef business, "Divine Dinners," at well-to-do residents of the Portland, Ore., area. She spends extra money on heavy vellum so her direct marketing stands out.

"I make it look like an invitation," Remington said. "I don't just put a flier on the front door."

Avoid the work-at-home scams that abound, especially on the Internet. A couple Huff knows spent $15,000 to buy a home-based travel opportunity and lost it all because they didn't know how to market themselves.

"Be wary of anything that sounds over-the-top fabulous, that promises you an amount overnight, anything that asks you to pay money up front," Parlapiano said.

RESOURCES

Internet resources for at-home businesses:

U.S. Small Business Administration -- www.sba.gov

Online Women's Business Center -- www.onlinewbc.gov

SCORE, Counselors to America's Small Business -- www.score.org

Bizymoms -- www.bizymoms.com

Mompreneurs -- www.mompreneursonline.com

Entrepreneur.com, Solutions for Growing Businesses -- www.entrepreneur.com

Mothers All Work at Home -- www.mothers-all-work-at-home.com

Home-Based Working Moms -- www.hbwm.com

(Katherine Reynolds Lewis can be contacted at katherine.lewis(at)newhouse.com)

This story was originally published Friday, Oct. 1, 2004.