Is A Home Business For You? Maybe, Maybe Not!

There are probably a thousand reasons to work from home these days, but that doesn’t mean it works for YOU.

During my 35 years of professional-level recruiting, I have had the good fortune to gain some refined perspective on the “how and why” of people’s career decisions. As you might expect, what I have seen ranges from the brilliant to the stupid.

Since embarking upon a career in the MLM/Home Business world, I have made some new observations which I feel compelled to share, especially if you are one of the hundreds of thousands who are now contemplating taking the plunge.

It is important to note: For most, this move would represent a radical departure from your previous lifestyle.

Now please allow me to put my “recruiter/career coach hat” on here. If you came to me asking for career advice concerning this kind of major departure from your work history, the first question I would ask you is, “Are you running FROM a past job, or TOWARD a future one? Or is it BOTH? Your answer is crucial. Wise decisions are driven exclusively by either “toward” or “both”.

Here’s where so many folks make the first critical mistake. Because of the actual “moving from” motivation, they lower the bar, without even realizing it. This leads to dangerous vulnerability, and it is so often about this time when the “clever pitch” arrives on the front doorstep. Believe me when I tell you, this can happen to the most discerning and mentally tough among us; and that has included your friendly author of this piece.

It is not by accident that I lead off with this extremely dangerous pitfall. Just look around at everything out there today from which one could run:

1. A failing economy, leading to the current massive layoffs
2. Corporate cultures which can be almost toxic
3. Bungling management, and bosses who are not trustworthy
4. Absence of corporate accountability, competence and even honest dealings
5. Disappearing pension plans
6. Dramatically declining home prices
7. A current average corporate job tenure of 2.7 years
8. Long hours; long and expensive commutes
9. Absence of competent and courageous political leadership

What I am saying is simply this: Make an honest and thoughtful appraisal, and take your time. Understand the fear-driven psychology which might come into play, and try to keep your head firmly positioned upon your shoulders.

Conversely, in this adverse climate it might make sense to at least CONSIDER the possibilities of working from home; so let us look at some of the variables which a prospect ought to examine.

Question One: What are the stakes?

Most people never really dissect this, and they should! Here are some of the questions which will determine the stakes:

1. Do I have other income streams?
2. How much time can I devote? How much time am I willing to devote?
3. What is the “buy-in”, or initial capital investment?
4. What will be the real cost of failure? Do I have a back-up plan?
5. Am I required to “Go for broke”, and quit my job? Must I work full-time to succeed?
6. What kind of career am I sacrificing for this business? (I must clue you in here. Employers are not particularly open-minded about unconventional career tracks, and perceived “adventures” of this sort.)

To state the obvious, one can see that the combination of “other income stream – minimal capital investment – no career cost – part-time requirement only” will put a completely different spin on one’s decision-making. Someone in that position could easily say, “What is to lose”? I have to agree. (Caution: just make sure your expectations of business results coincide with your time/money commitments.)

On the other hand, for those who find themselves closer to the “high stakes” end of the spectrum, I urge you to pay a bit sharper attention to the remainder of this article.

Question Two: What is your capacity for risk?

One of the real blessings of my long recruiting career has been the exposure I have had to successful entrepreneurs. Without exception, they have one thing in common: an above-average capacity for risk. The ultra successful can often tell you many colorful stories of being down to “pocket change”, taking out second home mortgages to finance their businesses, and on and on.

Most folks, when assessing their own capacity, think only of “financial risk”, but there is actually another important component, and that is “failure risk.” The facts are, most businesses fail, and most everyone knows it. Quite honestly, many folks are probably less equipped for this dimension than they are for the money part. Either way, it doesn’t matter how many times you explain to some folks, “You have to spend money and take risks to make money”, it falls on deaf ears.

And that is as it should be. These people are the highly valued employees, often working for entrepreneurs! Home business is probably not the solution for them.

Now let us suppose you have determined you are not one of those; and you believe you are ready to “get in the game.” You have digested my ideas up to this point; and you have taken a hard look in the mirror. So far, you say, it’s a “Go” for starting a home business.

Actually, you are probably most of the way there. Well, “hold your horses” while you take inventory by asking yourself these last few questions:

o Can I work alone? (This one is huge. Most people need co-workers.)
o Can I carve out the right kind of “space” in my current family and home situation?
o Do I need a lot of structure?
o Can I live with a high degree of uncertainty? Can my spouse and family?
o Can I “figure it out”, and take the initiative, or do I need direction?
o Do I have an attention to detail?
o Am I committed and persistent enough to make it through the tough times?
o Do I have a reasonable “supporting cast” of family and friends?
o Do I worry about what other people might think of home businesses?
o Do I have enough agility to achieve a reasonable level of skill in two rather different spheres: a) computer/technical/process, and b) sales/marketing/team building/coaching?

Actually, no one is going to score an “A” in all of the above; but you need to be pretty strongly in the “yes” side of the equation before you take the final step.

My own journey has given me an unusual view of the professional and career coin: individual success and failure, and what drives the decisions that lead to each of these outcomes.

So I say, hopefully with a degree of humility and modesty, I can see pretty clearly what kind of person is going to succeed in this business; and which of my readers should think twice before jumping in.

Increase the Value of Your Business – 5 Value Drivers

Are you considering selling your business? Before slapping up the ‘for sale’ sign, you may want to invest some time and energy in developing a few areas that don’t show up on the balance sheet. Buyers are interested in more than the bottom line. Here are 5 value drivers that influence the goodwill portion of your asking price and can make or break a sale.

Put yourself in the shoes of the buyer. You want to buy a business that can go through the transition smoothly with minimal disruptions. You want to quickly and easily get a handle on what needs to be managed and focus on business development. You want a business that is well organized with dependable and competent employees. You want to earn a profit and recoup your investment as soon as possible.

Generally, as a seller, you want to keep your plan to sell confidential so as not to scare your customers, contractors, employees and financing bodies. That would certainly drive your business value down. When you prepare your business for sale and get questions about why these changes are happening, make something up. Your New Year’s resolution was to become more organized – something like that.

1. Procedures
Do you have easily accessible procedures manuals that are updated on a regular basis? With the help of your employees, put together some ‘how-to’ guides. Any equipment or machinery should come with a manual that can be summarized in an easy to follow cheat-sheet format for reference. Your front-line staff should be your priority, as they are quite literally the face of your business. There is always a chance that employees may choose to move on when a new owner steps in and it is in your best interests to ensure that a new cashier can be trained efficiently so that you can focus on transitioning your business. Chances are that you have some sort of training procedures in place already. Now is the time to update them and iron out the problems.

2. Systems
Are your systems clearly outlined? Does everyone know what to do, how to do it and who does it? Get it on paper and streamline. This could meet with some resistance if major changes take place; however, change is inevitable when the new owner steps in. Some items to consider are: what to do if a key employee is absent; what to do with warranty issues; what to do with customer complaints; how exactly is widget A made; how are orders processed, checked and confirmed; who is responsible for what; who to call in case of emergencies. It sounds like a lot of work, and can be if your current systems aren’t clearly defined. This is good for you, your staff, your buyer and your selling price.

3. Job Descriptions
This goes with procedures and systems to some degree and goes a long way in creating a harmonic workplace. You should know by now what the key positions are, the skill sets required and what the going salary rate is for those positions. Keep in mind that your perception of these factors may be out a bit here and there, so why not bring in your key employees, one by one, and put together realistic job descriptions. It is quite common in small businesses to have a strong staff loyalty to the owner, resulting in more effort for less pay in some cases. When you do this exercise, remember that your staff will not immediately have the same loyalty to the new owner; therefore, do a final edit on your own, possibly reducing responsibilities and/or increasing expected salaries. The point is to have written job descriptions and pay scales ready to show potential buyers. The fewer surprises, the better.

4. Marketing Efforts
Just because you are ready to move on does not mean that now is the time to reduce your marketing efforts. If anything, increase them. You may not wish to pay for a whole new marketing strategy, but if that is a normal thing for you to do, then do it. Make sure you have enough materials (brochures, business cards, etc.) on hand to get through at least the first quarter after selling because your buyer will be too busy learning your business to come up with a new program from scratch. Maybe they will want to change everything immediately, but be prepared. Now is the time to crank up the volume, update your website and make your company image shine. More effort=more value=more money in your pocket after the sale.

5. Owner Dependence
Are you the Entrepreneur, the Technician and the Manager all in one? If you are a one-person business, that can’t be helped and you are obviously looking for a buyer who can fill all of those shoes as well. On the other hand, if you find yourself filling all of those roles while also having employees, it’s time to step back and delegate your workload. Empower your staff, hand over the work to competent people, hire a bookkeeper or create a management position. If you plan to hand over your business to someone new, it is better to prepare yourself by letting go of one thing at a time. Try to whittle your job down to what can realistically be expected of a buyer so that when the time comes, your involvement in training the new owner will be greatly simplified and less stressful for everyone involved. The buyer will appreciate this and it will have an effect on the selling price.

These are just a few non-financial examples of how you can add value to your business and ease through a smooth transition. Talk to a trusted business broker to help you determine the best way to prepare your business for sale.

How to Secure Financing For a Woman Owned Business

The business world is often considered a dog eat dog world. In today’s weak economy, it can be difficult to secure financing for any business endeavor. Women often have a more difficult time securing the needed funds than men for the same type of business. Programs are in place, however, that are designed to provide assistance for women seeking to start a business or expand an existing business they own.

The government Small Business Administration (SBA) has programs that allow it to act as a guarantee agency to assist women business owners in securing loans from financial institutions. The SBA does not make the loans directly, but having its backing can make getting a loan much for a woman in business. The SBA can be contacted at sba.gov to ask questions or apply for one of their programs.

Some banks have affirmative action programs that are designed to help women and other minorities in securing financing for businesses. The requirements to qualify for special financing under these programs are typically not difficult. One key item to watch is when a husband and wife start a business together, if financing is secured under a program for woman owned businesses, the woman must be the one actually in charge. These institutions will often employ inspectors to look into businesses financed under special programs to ensure that the conditions for qualification are indeed being met.

While it may be more difficult, a woman can secure financing for a new or existing business on her own merit without using any type of special programs for women. The keys to doing so successfully are having a solid, well written business plan, being able to show realistic projections of anticipated income with loan payments scheduled in, and she must have a reasonable amount of her own money to invest along with the borrowed amount. A good personal credit rating is a must in these situations.

Most banks will deny loan applications made by anyone, man or woman, who has too low a credit score and/or does not have a sufficient amount of capital on hand to assure the bank that one is not just risking the bank’s money. They are even more difficult to obtain financing from given the number of business failures and banks requiring government assistance to stay open today. The current financial climate is not great for starting a new business and seeking financing for anyone and it can be more difficult for women.

Beware of scams when seeking to obtain financing for a woman owned business. A large number of ads claim to be able to sell a kit that can help secure a government grant for the purpose of starting a business. The government does have a wide variety of programs that provide grants for many different purposes pertaining to education, housing, and other needs. There are, however, no programs under which the government provides grants for the purpose of starting a business. If it did, everyone in the country would own their own government sponsored business.