One on One is a weekly feature offering excerpts of interviews conducted by The Evening Sun with newsworthy business leaders. Cynthia Brower is regional director of the National Association of Home-Based Businesses, which markets its services to people who operate or want to start businesses at home. She works out of her home as an independent contractor for the Baltimore-based company.
Q.Is there a trend now toward home-based businesses because of economic conditions?
A.There are a number of reasons why there's a trend toward home-based businesses. The economic factor is one of them . . . the overhead (for outside-the-home locations) is much too high. They're saying, "I want to stay in business; I like being in the business but I want my profit margin to be a lot larger." They are going back home . . . So now not only do you have people starting their home business for the first time, they're returning home.
Q. What are the other reasons that people establish home-based businesses?
A. For women, a lot of times it's because they don't want to leave home. They have had a successful career. Nowadays women are starting to have families a lot later in life. And once you've had a successful career, you want to figure out a way to take care of a family and raise what you consider to be a successful child that has had all the advantages that you could possibly give him. But still you need to earn money because again the economy says that you need two paychecks. So they tend to opt for home-based business.
You're finding that men are staying at home for two reasons. One reason being that men nowadays feel that, "If I have something I can do from home, fine, stay home and enjoy some of the luxuries of being able to help take care of my kids and raise them and watch them grow up and they actually know me." And the other thing is that whereas normally a consultant would have gotten an office in an office building, it's now too expensive.
Q. What is the fee for belonging to your association?
A. There's a $65 fee for an affiliate members, which is a one-time fee, and it's $4 a month membership for those. There's a home membership for a person that already has a home-based business. That $125 and $4 a month membership dues. The $125 is again a one-time fee. And for professional consultants, $350.
Q. How do you function? Do you work at home?
A. My business is based at home because as the regional director I'm an independent contractor; it's based from my home, as well as the company. The umbrella company for National Association of Home-Based Businesses is a small business network, and they do offer independent contracts and certifications in international trade. I've become a certified international trader with them, which means that's another part-time business to have going with the association.
Q. How many members do you have?
A. We have 5,000 active members and don't count and hold people on the books that are not active. There is a high attrition rate in home-based businesses, especially beginner businesses, and that's because it's not what most people have expected.
Q. What does it take to start a home-based business?
A. It takes deciding what you want to do, number one.
Q. What would go into that decision?
A. You need to get a checklist of things that are your talents, your skills -- things that you like doing as well as things that you don't like doing -- because you don't want to get caught with starting a business in the area of something that you don't like doing.
Q. Once you decide on what you should do, what's next?
A. Once you decide what you want to do, you have to ask, can you make a profit with it?
Q. What does that involve? How would you know that?
A. Well, if, for example, I had somebody to call me and say "I like tutoring, group tutoring. I'm tutoring people for the GED (Graduate Equivalency Diploma)." Well, that's a noble cause; however, most people who don't have a high school diploma also don't make a lot of money. So how are they going to pay you?
Q. Does it take a lot of money to start up a home-based business?
A. Depending on what it is, it doesn't take a lot of money. I would say that you need at least $3,000 if it's not something where you need a lot of inventory or equipment.
Q. What are the factors one must consider before launching a business at home, such as zoning laws and tax laws?
A. You do have to consider them. Zoning is different from county to county. It just changes based on the occupation and the county.
Q. What about tax considerations?
A. There's a booklet that the IRS has prepared for home-based businesses and you can get that free. The main thing you'll need to do is have to have a record-keeping system and pay the taxes.
Q. What are the advantages of working at home?
A. First advantage is the low overhead. It's the biggest advantage because the low overhead does allow you to make mistakes and come back from the mistakes.
Q. What are some other advantages?
A. The flexible hours. Actually production time is higher; you get more out of your production. You produce more because the actual working hours and the business is right there.
Q. What would say the disadvantages?
A. The disadvantage is isolation. And it does disrupt the family routine. It's hard to negotiate with family members, neighbors, .. friends that just because you're home, it doesn't mean that you're now free. And there isn't any structure and higher management, and that is a disadvantage because most of us have had structure from the time we were kids . . . some people can't make it in their business just because they cannot discipline themselves to set a structure for themselves.
Q. Does your organization provide services that are not provided by government agencies such as the Maryland Department of Economic and Employment Development or the U.S. Small Business Administration?
A. What we do is we fill a vacuum that has been there always. For those people who are just starting in a business and do not want to put their house up . . . when you go to SBA, small business development centers and other places, they're actually looking for you to be ready to make certain commitments . . . we help them get ready to be able to utilize those services of the SBA, the small business development centers, and be able to move on from there . . . There are a lot of times they do need a step such as the National Association of Home-Based Businesses.
Q. What kind of support services are we talking about?
A. Business expos. We found that a number of people go into types of businesses. However, most of them don't know how to work a trade show... So what we have done is to come up with what we call a business expo where we actually do a hands-on event with the general public and we teach them how to do all these things, and they can practice in a realistic setting. And then, by the time they spend the $600 or $300 or $400 for a display, they actually can at least make their $600 back.
Q. What other services do you provide?
A. We provide a quarterly newspaper which . . . identifies companies that would like to do business with the National Association of Home-Based Business' members as well as people who are in home-based businesses. We've found that that has been a problem in that some people will shy away from certain services because they are not looking for a home-based entrepeneur, and that's fine. There's nothing wrong with that, but sometimes it does seem to crush the ego of a new entrepreneur . . . So what we found is that it is good to identify those companies that do in fact want to work with home-based businesses . . . .
Q. Who are the members?
A. Most of our members are people who are between the ages of 35 and 55. They already have a success track record when they come to us. They are starting a home-based business because they're tired of working for somebody else and getting a little piece of the pie. They want the whole pie. They're women who have said, 'Well, I can do better than this and go a lot faster and make a lot more money if I weren't trying to bang my head up against a wall in what was traditionally an all-male occupation.' They are people who are needing to supplement their incomes because of the economy, and they are people who are finding themselves out of a job because a company has gone bankrupt or merged with another company that's moved out of the area.
Q. Could you be a little more specific about the kind of things you teach them when they're just starting out?
A. We have a support line, for example, and they can call us while they're in the preparation stage and they can ask us anything from zoning to stationery questions . . . We have home-based business days, which are a number of workshops. Those workshops range anywhere from how to start a home-based business to doing business with the government to international trade. We cover everything that they can possibly need in the first stages and some advanced stages of their businesses.