a home based business onlinehome business ideas

Free Home Business Tips!
Home Based Business Newsletter
Join 15,000 subscribers!




   AHBBO Home Business Ideas

   Return to
   AHBBO Archives

Return to AHBBO Archives

============================================================
                                  A Home-Based Business Online
============================================================
 

                        
                                  

                                             March 2

                                       Sent to 4,189 subscribers

                                          Editor: Elena Fawkner
                                    Publisher: AHBBO Publishing
                                       
                                      Contact By Email
 

============================================================

============================================================
                                            IN THIS ISSUE
============================================================

1.     Welcome and Update from the Editor
2.     Home-Based Business Idea of the Week - Specialty
        Travel Agency
3.     Feature Article - Pricing Yourself to Get and Stay In
        Business
4.     Newsletter Publishing Tutorial - Part 6 - Delivering
        Your Ezine: Email and Web
5.     Pro-motion Column - Answers for the "Pro in Motion"
6.     Freebies
8.     This Week's Web Site Pick
9.     Next Week in A Home-Based Business Online
11.   Subscription Management
13.   Contact Information
 

============================================================
1. Welcome and Update from the Editor
============================================================

Hello again and a warm welcome to all new subscribers!

Thanks for the great feedback on the newsletter publishing
tutorial following last week's instalment.  I'm glad to see so
many of you have accepted the challenge and are starting your
own publications.  For those of you who are interested, I'm
happy to critique first issues and give you private feedback.
Also, apologies for the error in the autoresponder link for last
week's instalment.  The correct address, as I'm sure you
figured out, was .

Remember, this newsletter is for YOU! If you have comments
or suggestions for topics you would like to see addressed,
or would just like to share your experiences with other
subscribers, I want to hear from you! Please send comments,
questions and stories to Contact By Email
 

============================================================

============================================================
2. Home-Based Business Idea of the Week - Specialty Travel Agency
============================================================

Unlike the typical travel agency that will put together a
run-of-the-mill package tour, book a flight, arrange car rental
and hotel bookings, a specialty travel agency focuses on
the speciality travel market: the adventure seekers, special-
interest groups, specific geographic locations etc..

As a specialty travel agent, you may choose to focus on
one specific segment of the specialty travel market, such as
adventure holidays, or on several segments.  You may
combine white-water rafting holidays, treks in Nepal, African
Safaris and ecotourism, for example.

Specialty travel will require you to have an intimate knowledge
of the segments of the markets you intend to focus on.  So,
if you decide to specialize in trekking holidays, you're going
to have to know your stuff and that means getting out there
and doing it for yourself first so you know what you're talking
about.  Likewise, don't decide on bird-watching tours as your
area of specialty if you know nothing about birds.  Pick
something you're enthusiastic and knowledgeable about and
you'll be well-placed to package memorable holidays that your
clients will talk about for years to come assuring you of repeat
business and word of mouth referrals.

Useful resources:

=> Sites

=> Books

Home-Based Travel Agent: How to Cash in on the Exciting New
World of Travel Marketing by Kelly Monaghan

Guide to Starting and Operating a Successful Travel Agency
by Laurence Stevens

Marketing and Selling the Travel Product
by James F. Burke  Barry Paul Resnick

These titles and many others related to starting a travel agency
business can be ordered online at Barnes & Noble
http://www.barnesandnoble.com or Amazon.com at http://www.amazon.com .

------

There are many more ideas like this in AHBBO's Home
Business Ideas page at
and Online Business Ideas page at
with more being added
all the time.
 

============================================================
3. Feature Article - Pricing Yourself to Get, and Stay In, Business
============================================================

By Elena Fawkner

It goes without saying that the bottom line of any successful
business is profit.  don't make a profit and you won't be in
business for very long.  Making a profit is pretty simple really.
You just have to make more than you spend.  The trick is to
know how much you have to make to exceed what you spend.
And you spend more than money when running a business.
You spend something infinitely more valuable.  Time.  And,
as we all know, time is money.

To maximize profits, accurate pricing is absolutely critical.
Your prices must be high enough to cover costs and enable
you to earn a reasonable return but low enough to remain
attractive to prospective clients.

New entrepreneurs often have difficulty accurately pricing
the value of their time and expertise.  Some take the approach
that they can work cheaply because they are fast and they're
prepared to take any work, now matter how low-paying, to fill
in the time between more lucrative assignments.  For this
group, the mindset appears to be that any work is better
than no work.   Although this may seem reasonable when
you're first starting out and you just want to make your
mark as early as possible, the downside is that this short-
sighted approach can create in customers a "cheap"
mindset that is difficult to shift once the business becomes
established.

Another group of entrepreneurs, though, takes the approach
from the outset that they are worth top dollar and demand
fair pricing for the value they provide and won't accept anything
less.  This group appears to be more successful than the
former in the longer run.  Sure, they may find it slow to start
with.  After all, they are new in town, they can't rely on
repeat business and they can't ride the wave of their own
impressive reputations.  But by setting the bar high to start
with, when their businesses DO become established, they've
set the tone and their businesses usually have a firmer
foundation for it.

This article looks at the fundamentals of pricing for the new
home-based business entrepreneur.
 

BASIC PRINCIPLES OF PRICING

Here are some basic principles to keep in mind when
considering your pricing strategies:

=>  Prices must at least cover costs.

If you don't at least cover costs, and this includes an
amount for your time, you will incur a loss.  If your business
is incurring a loss it's a hobby.
 

=> The best way to lower price is to lower costs

As price equals costs plus profit margin, it's obviously better
to reduce the cost element than the profit element if, for any
reason, you find that you must reduce your prices.
 

=> Prices must reflect the environment in which they operate

Any price, whether yours or your competitors', necessarily
reflects the dynamics of cost, demand, market changes,
competition, product utility, product longevity, maintenance
and end use.
 

=> Prices must be within the range of what customers are
prepared to pay

It's all very well having the best bread slicer in the western
world but if your price is more than customers are prepared
to pay for it, so what?  On the other hand, there is absolutely
no reason to charge less than customers are prepared to pay
either.
 

=> Prices should be set at levels that will shift products
and services and not to beat competitors alone

It's easy when you start delving into all of the sophisticated
analysis and research around about optimum pricing levels
to forget that, at the end of the day, you set your prices as
high as you can while still shifting your products and
services.  So don't think that keeping pace with competitors
is enough.  It isn't.  You may have competitive advantages
that mean you can price higher than your competitor and
still charge more.
 

=> The price you set should represent a fair return for your
time, talent, risk and investment

Don't be coy about demanding a reward for what you
bring to the table.  Your expertise and talent has objective
worth.  Don't just give it away.  Charge for it.
 

PRICE = COST + PROFIT MARGIN

The basic price you will strike is simply your costs plus a
profit margin.  It follows that before you can set your prices
you must know exactly what your costs are.  Costs fall
into three main areas:

=> Direct Costs

Direct costs are those things directly related to the creation
of your product such as raw materials, parts and supplies.

=> Overheads

Overheads are business costs not directly related to
production and include things such as taxes, rent, office
supplies and equipment, business related travel, insurance,
permits, repair of equipment, utilities (electricity and
telephone) and professional advice (accountant, lawyer).

=> Labor

Labor costs include all wages paid to employees *including
yourself*.  It's amazing how many home-business owners
forget to include their time as a cost of business!

Calculate your labor costs by multiplying the number of
hours worked by an hourly wage.  You should also include
fringe benefits (typically 15% plus).

Once you have ascertained your total costs, add a profit
margin.  A 15-20% profit margin is standard for most
home-based businesses.  Although you have included
your own wages in your labor costs, if you don't add a
profit margin there will be no money for growth or expansion
of the business.
 

RELATIONSHIP BETWEEN PRICES AND PROFITS

The easiest way to increase your profit is to raise your prices.
But you can't just raise prices indiscriminately.  Look for
ways to manipulate niche pricing instead.  This means
looking for specific areas of your business where you have
some latitude to increase prices.

The way to do this is to identify the areas where the
perceived value of what you are offering is higher than the
price you are currently charging.  Start by carrying out a
competitive analysis of your business.  Find out how your
product compares with your competitors' on the basis not
only of price but costs as well.

If you are going to source this information by approaching
competitors directly, a word of caution ... don't.  The
Sherman Act in the US (and similar legislation in many
other jurisdictions) prohibits businesses of any size from
entering "contracts, combinations or conspiracies" in restraint
of trade.  In other words, it's illegal to make deals with
competitors about what price you'll charge or what services
you'll offer.  Merely discussing prices with competitors can
be construed as an attempt to conspire on prices.  This is
one area where you just don't want to give even the *whiff*
of an impression of doing anything of the sort.

So, be circumspect in your research.  Never discuss prices
with competitors and avoid frequent communications with
them at all if possible.  Instead, to keep tabs on what your
competition is up to, read their ads, talk to their suppliers,
engage mystery shoppers or send an employee to make
observations.

Once you have completed your competitive intelligence,
analyze your competitive advantages and disadvantages.
If, as a result of your analysis, you learn than you have
an advantage over your competition because your business
is website design and you know how to do cgi-scripting but
your competition has to outsource this function and this
means a delay of one to two weeks, then this advantage is
something your customers will likely pay more for.  Adjust
your prices accordingly.
 

WHEN YOU'RE THE PRODUCT

Some businesses don't offer tangible products at all.
Sometimes, YOU are the product.  So, how do you price
yourself if you're, say, an ecommerce consultant and
your business is assisting brick and mortar businesses
make the transition to ecommerce?

One perfectly reasonable approach is to start with a
calculation of your actual expenses and your salary needs
and then divide the total by a reasonable estimate of billable
hours.  An article entitled "Setting Fees" by David Dukoff
gives a good overview of how to go about doing this. 

Let's say your expenses and salary needs mean that your
business needs to be generating $100,000 a year.  Let's
also say you prefer to charge clients by the hour rather than
by quoting on projects.  How much do you need to charge
per billable hour to generate $100,000 per year?

Dukoff uses the following approach.  To start with, how
many billable hours do you have?  Let's start with 2,080
work hours in a year.  Deduct 100 hours for vacation time
(2 weeks), a further 80 hours for popular holidays, 40 hours
personal time and sick leave and 20-40% of time for
marketing and administration.  This leaves you with around
1,000 billable hours in a year.  You therefore need to charge
$100 per billable hour to achieve your goal of $100,000
income.
 

OTHER PRICING STRATEGIES

Other pricing strategies to include in your structure include
discounts to encourage prompt payment or quantity
purchases, seasonality issues (for example, end of season
“sales"), offering senior citizen and student discounts and
other promotional incentives.
 

As you can see, setting the "right" price for your products
and services is absolutely crucial to the profitability (read
survival) of your business in the longer term.  But with
careful analysis and a methodical approach, you should be
able to arrive at reasonable pricepoints without too much
difficulty.  Then it's just a matter of monitoring demand in
response to price changes to settle on the optimum pricing
for your business.  But don't rest there.  Your prices operate
within a constantly changing environment and you need to
be ever-vigilant to ensure that your prices remain at their
competitive maxima.  One final piece of advice:  if in doubt,
price high rather than low.  It is much easier to discount
prices than it is to increase them.
 

============================================================

============================================================
 

============================================================
4. Newsletter Publishing Tutorial - Part 6 - Delivering Your Ezine:
    Email and Web
============================================================

Last week we looked at how to generate initial subscribers
for your newsletter.  This week we look at how, once you
have generated an initial listing of subscribers, you will
deliver your newsletter to them.

This week's instalment is available at the AHBBO website
or by autoresponder
by sending a blank email to .

------

Next Week Part 7 - Building Your Subscriber Database II -
Long-Term Subscriber Generation, Publicizing, Ad Swapping
and Joint Venturing Your Way to Critical Mass

-----

Missed previous instalments? No problem! All instalments
of the AHBBO Newsletter Publishing Tutorial are archived at
the AHBBO website at
 

============================================================
5. Pro-motion - Answers for the "Pro in Motion"
============================================================

Q. Why do I need a company name when I'm just working from
home? (Susan A.)

A. To be considered professional, even home workers need a
company name if they are in business for themselves. You do
want to be taken seriously, don't you? If so, you'll need
to register a business name.

The registration I'm referring to is often called a "DBA"
(Doing Business As), a "Registered Alias" or an "Assumed
Name Statement" in most States of the USA. I'm sure that
agencies are provided for this purpose in countries outside
the USA.

Corporations are registered when they are formed. However,
a company name needs to be registered even if it's a sole
proprietorship, i.e., individually owned and unincorporated.
Do you think that working on the Internet is exempt? It
isn't!

Actually, I'm not even referring to the legal aspects of
owning a business. It's a simple matter of your degree of
professionalism. If you are taking money from people to
provide a product or service - you are a business!

Without a business name registration, a bank won't give you
a business bank account. What? You don't need a business
bank account? Are you going to send refunds with your
personal checks? Are you the same person who doesn't
want customers to know where you're located?

Are you in business, or not? Get your business registered
and get a business bank account.

Q. I join affiliate programs in order to be paid commissions on
the products I promote. Do I really need a business name?
(Bob W.)

A. Well, that depends. Technically, you are a broker for the
companies providing the products. You may choose to set up
a company for that.

However, if your chosen affiliate program companies take
complete care of the customer after the sale, there may be
no reason for anyone to contact you. You may simply be an
independent contractor - which doesn't necessarily require a
company name.

Bear in mind though that the moment you begin publishing an
ezine or newsletter to promote those products - if you sell
advertising - you have now become a full-fledged business.

Get a business name!

Yes, a business bank account will cost a few bucks more than
a personal account. But if you can't make that, you're
already belly-up.

* To submit questions to "Pro-motion"

jl scott, ph.d., Author
© 2013, All Rights Reserved
This article may be reprinted with permission by including the
following resource box:
======
dr. jl scott is the Director of the International Association for
Professionalism Online (IAPO) - and also
the publisher of MONDAY MEMO! - the ezine dedicated to upgrading
Professionalism on the Web. For your FREE subscription:

 

============================================================
 

============================================================
6. Freebies
============================================================

=> E-book
     Your Home-Based or Internet Business --- Protect
     It and Yourself from the IRS!
     By Jacqueline McLaughlin Hale
    
 

-----

If you're new to A Home-Based Business Online, be sure to
visit for many more freebies.
 

============================================================

YOUR BUSINESS CAN ACCEPT CREDIT CARDS
Increase sales instantly up to 200%. Accept your customers'
credit cards with your own low-cost credit card merchant
account. Quick & easy setup. New businesses, high-risk
businesses welcome. 95% approval. NO application fee. NO
setup fee. NO obligation. U.S. business only.

============================================================

============================================================
8. This Week's Web Site Pick - Idea Cafe
============================================================

A place for entrepreneurs to hang out and rub shoulders
with those in the know.  Idea Cafe wants you to get the
information you need (and now!) but make sure you enjoy
yourself at the same time.  Serious business in a fun
environment.  An interesting site.

For more about the concept behind Idea Cafe visit

 

============================================================

============================================================
9. Next Week in A Home-Based Business Online
============================================================

-> Home Business Idea of the Week: Property Management
-> Feature Article: Beyond Startup ... Are You Stunting the
    Growth of Your Home Business?
-> Newsletter Publishing Tutorial: Part 7 - Building Your
    Subscriber Database II - Long-Term Subscriber Generation,
    Publicizing, Ad Swapping and Joint Venturing Your Way
    to Critical Mass
 

============================================================
11. Subscription Management
============================================================
 

To SUBSCRIBE to this Newsletter
Home Based Business Ezine

To UNSUBSCRIBE from this Newsletter

If you find this newsletter valuable, please forward it
in its entirety to your friends, family and associates!
 

============================================================
13. Contact Information
============================================================

Elena Fawkner, Editor
A Home-Based Business Online
Contact By Email

============================================================
 

Copyright © 1999-2013 AHBBO Publishing
All Rights Reserved

Copyright 1998-2017, AHBBO.com. All rights are reserved. Saturday, 27-May-2017 23:52:49 CDT