Kim Hilliard, 33, has been selling products for Southern Living at Home out her Millersville residence for 2 1/2 years. She is among a growing number of Baltimore-area women with home-based firms. "The business is very simple, but you really have to love it."
Kim Hilliard, 33, has been selling products for Southern Living at Home out her Millersville residence for 2 1/2 years. She is among a growing number of Baltimore-area women with home-based firms. "The business is very simple, but you really have to love it." (SunSpot photo by Donna M. Griffin)

After 12 years of attending Catholic school, Dana Barish was more than prepared to run a business.

Yet the products the Annapolis resident sells are a far cry from the conservative doctrine of her education. "Slumber Parties by Dana" is a home-based franchise selling sex paraphernalia -- what Barish, 33, describes as all the essentials to "put the sparks back into people's relationships and the spice back into their bedroom."

"It took me awhile before I got up the nerve to tell my mom what I was doing," said Barish, who became a distributor for Slumber Parties Inc., based in Baton Rouge, La., in March 2002. But with 90 active recruits, her mother's perception has changed. "She recently passed out my catalog at the family reunion."

Barish is among a growing number of women in the Baltimore region who are operating businesses out of their homes. While exact figures are hard to come by, more women are realizing that the best way to balance raising a family with earning an income is by using their home -- and their personal network of contacts -- to sell an array of goods.

And, not unlike the Tupperware parties introduced to American consumers in 1948, products ranging from clothing to jewelry to cookware -- even sex paraphernalia -- are holding their own against such standard home-sales fare as cosmetics and cleaning supplies.

Start-ups skyrocket

"When women are coming out of the workplace and are opening their own businesses, they have the flexibility of deciding what the heck they want to do," said Maureen Petron, a spokeswoman for the National Association for the Self-Employed, an organization of 250,000 member businesses based in Washington.

The association, founded in 1981, estimates that there are 9.1 million self-employed women in America.

"When you're doing all of these things [in running your own business], and you're playing a variety of roles, you need to love what you're doing."

Amy Robinson of the Direct Selling Association, a Washington-based group of 200 companies that provide products to distributors, agreed.

"Mary Kay sells cosmetics, but there are five million other products being sold out there," Robinson said. "Any consumer product you want to buy is available through direct selling. Seventy-five to 80 percent of direct sellers are women."

In fact, a NASE survey showed that the number of start-up businesses by women has grown by double digits annually from 2000 to 2003, significantly outpacing the growth rate of the 1990s.

The survey, the results of which were released last week, also found that women-owned start-ups are outpacing businesses established by men this year by a 2-to-1 ratio. Technology and workplace trends also have helped the situation, the association said.

"Women want the flexibility," Petron said. "They want to be able to have time to spend with their families, time to spend with their communities and time to spend with their businesses. They simply want to be able to better manage their home and work lives."

Women outpace men

Maryland and Baltimore officials are unable to estimate the number of home-based businesses. Mike Griffin, assessment supervisor with the Maryland Department of Assessments and Taxation, explained that while the state issues about 29,000 licenses each year, they apply to any type of home-based business.

According to NASE's survey of 1,000 randomly selected self-employed women and men, nearly a third of them reported starting their businesses since 2001, while 9.8 percent of them said they set up shop this year. That compared with 5.1 percent of male respondents reporting that they started their businesses this year.

In addition, 25 percent of the businesses owned by women provided professional services, 15 percent were in retailing and 13 percent were involved in a range of consumer services -- including plumbing and automotive repair -- the association's survey said. Sixty-seven percent of the respondents were from 35 to 54 years old.

While 85 percent of the women surveyed said they gave up working for somebody else to start their own companies, 43.7 percent said they changed careers to do so, the survey said.

In addition, 22.5 percent of them worked their businesses part time, NASE said, and the businesses are the sole source of income for 55 percent of the survey's female respondents. Only 40 percent reported having a spouse working full-time outside the home.

"It's not like the days of the Cleaver family," said Beverly Davis, a NASE member who conducted the survey for the association.

While Barish makes it clear that her parties are for women only -- "no men, babies, or children are allowed," her Web site says -- men do have a role. "I have women tell me that they get more money from their husbands the night of my parties than they spend at the grocery store," said Barish, who rings up her clients in a private room. "Women tell me that their husbands made them come. The husbands are handing over the credit cards."

Easy way to earn

Erin M. Fuller, executive director of the National Association of Women Business Owners, an 8,000-member organization based in McLean, Va., said women gravitate toward home businesses to keep expenses down.

"These businesses are very lucrative because overhead costs are low, many of the products have known brand names, so a lot of the marketing has been done for them. Women are becoming more savvy in starting businesses.

"These are women's first taste of entrepreneurship," Fuller added. "They still have to do effective marketing. They have to do inventory and they have to do sales. "

Start-up costs for home businesses range from about $200 to become a consultant for some companies to several hundred dollars or more to buy into several home-stationery lines. A business also must have a tax-identification number and quarterly sales tax payments.

With direct selling, product owners or sales representatives recruit individuals to host a party, to which the hostess invites guests. The hostess provides food and drinks -- and the sales reps have a captive audience for showcasing their goods. In exchange for her hospitality, the hostess often receives a merchandise credit or a share of the evening's sales.

But the most important requirement -- regardless of the home-based business -- is a love for your product, said Kim Hilliard, 33, of Millersville.

Two and a half years ago, she was exhausted by the long hours she was logging as a marketing director at a local nonprofit agency. "I saw a little ad in the Junior League paper in Annapolis and I decided to check it out," Hilliard said.

Now, she is a director with three active consultants under her management for Southern Living at Home, a spinoff of the home décor magazine that sells the items and recipes made popular by its readers.

"The business is very simple, but you really have to love it," said Hilliard. "You have to absolutely love your product. Whether it's Mary Kay or something else, you're not going to be able to sell your product if you don't believe in it. If you don't wear a lot of make-up, you don't want to sell Mary Kay."

Benefit of flexibility

The NASE survey showed that for 55 percent of the female respondents, their businesses were their sole source of income. "This is not just a labor of love or something to do while Johnny is at school," she said.

But there are other rewards, the business owners say.

"I love working for myself," said Hilliard, who recently welcomed the birth of her first child. "Coming from a nonprofit, it's a nice change. I've won three trips through my sales. My husband and I have been to St. Thomas, on a five-day cruise, and to Mexico. You can earn anywhere from $700 to $2,000 a month with minimal hours."

Barish added: "The best thing was that I was at the pool every day with my kids. I get to be with my kids all the time, and that's the most important thing to me."

One concern is the success rate of home-based businesses. Griffin of the assessments and taxation department said one reason the state is unable to track such companies is because of their failure rate.

"We realize that 80 percent to 90 percent of them are going to fail after a year or two," he said. "We see that with legal entities, so we wouldn't think it's much different."

But Petron disagreed, noting that NASE's survey found that nearly 56 percent of the female respondents said they planned to continue their businesses for 10 years or more, 19 percent indicated they were planning to stay in the game for the next five to 10 years, while only 3.3 percent said they would close their businesses within a year.

Robinson of the Direct Selling Association added that many home-based merchandise sellers only work from September to November, pulling in extra income for the holidays.

"After they reach their goal, they drop out, but they come back," she said. "Just because they've stopped, that doesn't mean they've failed. You can always come back next year."

'Helping your friends'

Home-based businesses could not survive without contacts, NASE's Petron said. The association's survey found that 51 percent of the respondents belonged to at least one professional organization, with nearly 37 percent of them participating in at least two groups.

"That is how women work, through the people they have met," she said. "It's just their way of doing things."

That is the only way Rene Pallace operates. The Annapolis resident is area development manager for the New York-based clothing line Etcetera. She recruits independent contractors in the region with enough social connections to drive the sales for a clothing line that averages about $160 per item.

With 13 women on her sales team, Pallace explained that it is those connections that will ensure her reps success.

"You're helping your friends," she said. "For the buyer, it's a more consultative sale than what they get at the mall when a 19-year-old comes up and directs you to make choices.

"It's much easier to shop in this way," she added. "With us, the customer is building a wardrobe that goes from carpool to cocktail. You avoid getting a closet full of clothes with nothing to wear."

Lindy Glassman, 30, points to other benefits. The Glenwood resident is a veteran customer of the home-shopping circuit, with her calendar filling up weekly with invitations to product parties as the holiday season nears.

"I think it's just as much social," Glassman said. "It's really an opportunity to get together with friends and sometimes find items or gifts that you won't find in the stores. These parties can be a lot of fun."

"Dr. Phil said you should get together with the girls once a month," Barish added. "It's a great way to do that and to meet your neighbors."

Getting started

Here are some tips for starting your home-based business:

  • Start with a plan in mind. Create a simple, informal business plan that addresses the major areas of your enterprise: marketing, cash flow, legal structure.
  • Claim your space. Set up an area in your home that is devoted exclusively to your business. Have all the office supplies and equipment you will need readily available.
  • Establish a professional presence from the start. Get business cards and stationery printed, set up a voice mail system to handle missed calls and have a place to consult with clients if you invite them into your home.
  • Set the ground rules for family and friends. Let them know your business hours and explain that you can't be disturbed during that time.
  • Develop contacts. Don't become isolated. Join local business groups and the chamber of commerce to promote your business and meet other business owners.

    SOURCE: National Association for the Self-Employed