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A Home-Based Business Online
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Practical home business ideas, strategies
and resources for the work-from-home
entrepreneur
September 24, 2000
Sent to 6,012 subscribers
Editor: Elena Fawkner
Publisher: Fawkner Publishing
http://www.fawkner.com
Contact By Email
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ATTENTION: You're receiving this ezine because you, or
someone using your email address, subscribed. There is no
other way of being added to this list. If you'd like to remove
your address from the AHBBO subscriber list, please see the
instructions in segment 8 below. Please note you CANNOT
be unsubscribed from AHBBO by replying to this email. The
AHBBO subscriber list is NOT made available to other
companies or individuals. I value every subscriber and respect
your privacy.
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IN THIS ISSUE
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1. Welcome and Update from Elena
2. Home-Based Business Idea of the Week - Vacation
House Swap Service
3. Feature Article - Planning Through the Life Cycle of
Your Business (Part II)
4. Pro-Motion Column
5. This Week's Subscriber Web Site Pick
6. Contest
7. Advertise in A Home-Based Business Online
8. Subscription Management
9. Caveat Emptor
10. Contact Information
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1. Welcome and Update from Elena
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Hello again, and a warm welcome to all the new subscribers
who have joined us since the last issue!
In this week's feature article, we continue with Part II of the
series, "Planning Through the Life Cycle of Your Business",
this week looking at toddlerhood. Part 1 which ran last
week is available by autoresponder at
mailto:planlifecycle_pt1@fawkner.com
.
As always, thanks for reading and I hope you enjoy this
week's issue.
Remember, this ezine 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
.
============================================================
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------
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============================================================
2. Home-Based Business Idea of the Week - Vacation House
Swap Service
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Here's an online business idea that has truly international
potential. The business is a Vacation House Swap Service
and involves you, as business owner, coordinating an online
matchmaking service for people interested in swapping
houses with people in other countries or parts of the
same country for vacation purposes.
This business is simple in concept and in execution.
The key lies is generating listings from people interested in
swapping houses with someone else. You can generate
listings by actively promoting your service everywhere you
think your target market will congregate. These will be
people interested in travel, primarily.
How you structure your business is, of course, up to you.
Here's one model you could follow. Set up your website
in such a way that someone must pay to become a
member. Once a member, that person is eligible to
post their own property in your database (make sure the
form you use for this purpose has very detailed fields
to maximize the chances of a close match) and to
search for others' listings. Allow for searches by
specified criteria to ensure close matches.
Leave it up to the parties themselves to make contact
with each other, and the website will pretty much
run itself.
Supplement the website with your own ezine and you'll
be generating traffic and business in no time.
------
There are many more ideas like this in AHBBO's Home
Business Ideas page at http://www.fawkner.com/hbideas.html
and Online Business Ideas page at
http://www.fawkner.com/obideas.html
with more being added
all the time.
============================================================
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------
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3. Feature Article - Planning Through the Life Cycle of
Your Business (Part II)
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© 2000 Elena Fawkner
This is part two of a multi-part article on business planning
through the lifecycle of your business. In part one, we covered
the business life stages "Gleam in the Eye" and "Conception
and Birth". Part one was concerned with conceiving the initial
idea for a business and thinking through how to make it work
within the context of your own life; whether it would work for
you at all, in fact. In this part, we're dealing with more than
a
theoretical business ... your business now exists and it's time
to learn how to crawl, walk and run.
Perhaps the best way to illustrate the remaining life stages
of your business and the planning issues that arise in each is to
use an actual example. Therefore, for the purpose of the
remainder of this article series, your business is creating beautiful
stained glass lampshades, door panels and windows. This is a
craft you have enjoyed for many years and you are very good at it.
You have received many compliments from friends, family and
other visitors to your home which is a shining example of your
best work. Until now, you have limited yourself to creating
pieces for special people in your life and for yourself.
TODDLERHOOD
In the toddlerhood stage of your stained glass business, you
need to learn to crawl and then to walk, albeit unsteadily at
first. To this point, you've only created your stained glass
pieces for friends and family for special occasions. Now it's
time to start generating paid orders.
=> Setting Your Prices
To begin with, before you start touting your services, you need
to decide what you are going to charge for your various pieces.
How will you structure your pricing menu? Will you charge a
set price for a small lampshade, a higher set price for a larger
lampshade, more again for a window of a certain size? Or will
you charge by the hour? In our example, your best bet is
probably to charge a set fee per piece as people will generally
be more comfortable ordering something if they can be certain
up front what it's going to cost them.
So, sit down with a piece of paper and work out your pricing.
To start with, decide on a few basic products that you will
offer. You may decide that a basic product line includes
lampshades, windows and door panels. Within each of these
product categories, you refine your product offering. In the
lampshade category, you may offer a small shade for a desk
lamp, a medium shade for an end table lamp and a larger shade
for a floor lamp. Within the window category, you may again
offer basic sizes: small, medium and large. You probably
won't be able to settle on definite sizes for your three categories
so set ranges. A window that falls within the six by twelve
inches to eight by eighteen inches range is a "small", ten by
twenty inches through 15 by 30 is a "medium" and so on.
And the same thing for your door panels product category.
Now, when it comes to pricing, remember this formula:
Price = Cost plus Profit Margin
Here's how to go about pricing your small lampshade.
Figure out your costs. These are your raw materials,
such as glass and lead, AND YOUR TIME.
We'll assume, since you've been practising your craft for
years that you already have the necessary equipment. If
not, factor this cost into your pricing as well, spreading it
out over whatever amortization rate applies in the tax tables
for your business. (We're not going to get overly clever here
and draw fine distinctions between fixed and variable costs.
You can learn about that by doing your research.)
Now, how do you go about pricing your time? Well, ask
yourself this question: how much do you need to earn in
a year to be making a decent living if you did this full-time
and had no other source of income? I'm not talking here
about megabuck income. What's a reasonable income for
you given your background and opportunities?
Let's say, for the sake of argument, that it's $50,000. OK.
Calculate how many days a year you would work in an outside
job. Let's say it's 235 after allowing for weekends off, two
weeks vacation, ten public holidays and five sick days. In
hours, that's 1,880 assuming an eight hour work day.
$50,000 divided by 1,880 hours is $26.60. So, in order to
make from your business the equivalent of what you earned
in your job, you need to end up with $26.60 an hour. (This
is a highly simplistic analysis since it doesn't take into
account tax considerations, foregone fringe benefits etc.
but it will do for the sake of this illustration. Be sure to
factor these things into your analysis when you do it
though.)
Now, how long does it take you to create a small lampshade?
If you're smart, you'll create a series of designs up front.
Let's say that, on average, each small lampshade takes
two hours. Your basic price for a small lampshade will
therefore be your costs of materials, let's say $14.80, plus
two hours of your time ($53.20) for a total of $68 plus profit.
Remember: what you're paid for your time is not profit, it's
a cost you're covering. So, don't forget to add a profit margin.
15% - 20% for a home-based business is about average.
So, taking your basic price of $68, you would add another
$10 or so for your 15% profit margin, making a total of around
$78.
That's the basic strategy for pricing your products. Follow
the same approach for your other product lines.
Strictly speaking, this exercise is something you should have
completed during the "Conception and Birth" stage of your
business as it's a vital part of assessing the viability of your
business. Is this pricing structure something your market
will bear? That's a crucial consideration. If you can't
sell
your work for the prices you strike during this stage, your
business will not be viable. I've assumed for the sake of
this example that you've done your competitive analysis
and you can, indeed, demand this sort of price for your work.
Be sure to read "Pricing Yourself to Get and Stay In Business"
for a more detailed consideration of these and other pricing
issues. It's available by autoresponder at
mailto:pricing@fawkner.com
.
=> Generating Sales
Now, back to crawling and walking. Now that you know
what you need to charge to run a viable business, you need
to get orders.
To start with, create a sample of your work. You need a
catalogue of your product range. So, create a small, medium
and large size lampshade; a small, medium and large window
and sample door panels. Make these your best work. They
are the showpieces you will use to generate sales.
To get orders, get the word out that you are now in business.
Start with your immediate circle: work colleagues, parents
of your children's schoolfriends, friends, friends of friends
and friends of family. Word of mouth will do wonders, believe
me. You may even want to think about arranging for friends and
acquaintances to host parties to showcase your work.
Then distribute flyers around your community with photographs
of your work.
Develop a website and work hard to generate traffic to it.
Get this bit working and you'll have a worldwide market.
Get professional photos of your work taken and display them
at your site. Provide for online ordering and get set up to accept
payment by credit card.
=> Moonlighting
During this stage of toddlerhood, which could last for a couple
of years or longer, you're running your business on the side.
On the side of work if you work full-time outside the home, on the
side of raising your children if you're a homemaker taking care
of young children. The point is, it's not a full-time business
yet. Use this time, while you still have the security of a
regular paycheck, to learn to walk. Work out the kinks in your
business plan. Orders not coming in as fast as anticipated?
No problem, you haven't got everything riding on this. Spend
some more time developing your website and generating
traffic. The orders will come, it will just take time.
This concludes Part II of this article. Stay tuned for Part III
next week when we'll grapple with those terrible two's.
------
** Reprinting of this article is welcome! **
This article may be freely reproduced provided that: (1) you
use the autoresponder copy which contains a resource box;
and (2) you leave the resource box intact. To receive a copy
of this article by autoresponder, just send a blank email to
mailto:planlifecycle_pt2@fawkner.com
. If you missed the
first part, it's available by autoresponder at
mailto:planlifecycle_pt1@fawkner.com
.
============================================================
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------
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5. Pro-Motion Column - Answers for the "Pro in Motion"
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by jl scott, ph.d., Director, iCop™
Q. I have a home business. The company I am an associate for
has totally stopped its communication with its associates. We
feel that we are all alone. They don't send out their monthly
snail mail anymore, they canceled their monthly teleconferences
and they don't respond to email.
A home business of my own has been a life long dream. I don't
want to give it up, but I am seriously considering it. Any
suggestions or comments would be helpful. (Jim)
A. Funny thing - just as your email came in, I was about to
turn down an ad for MONDAY MEMO! because it was for an
affiliate program with NO physical contact information on their
site! By "physical contact information" I mean an address and
telephone number.
This is a sad state of affairs and I sympathize with you. SO
many people learn the hard way NOT to do business with
companies you can't contact other than through email.
In the "brick and mortar" world, most companies have to sign
leases to house their business. Even those who work at home
have to advertise a way to contact them by telephone. It isn't
easy to just fold up the tent and ride off into the sunset.
An Internet business is a completely different ball game when it
comes to stability. Little investment and no long term
financial commitments make it so easy to be "here today - and
gone tomorrow."
If a business is set up to pay YOU money to work for THEM -
you need to know where your money is! Find affiliate companies
who aren't afraid to let you know where they're keeping it. That
would be their address!
You shouldn't have to give up your home business. You'll just
need to find another program that works for you. And be sure
it's with a company who doesn't hesitate to allow you to contact
them directly rather than only by email.
Please go to http://www.i-Cop.org/articles/
and read the article
entitled, "Who ARE These People?" This article will tell you
what to look for!
* To submit questions to "Pro-motion"
mailto:Questions@i-Cop.org
jl scott, ph.d., Author
Copyright © 2000, 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 Council of
Online Professionals (iCop™) http://www.i-Cop.org
- and also
the publisher of MONDAY MEMO! - the ezine dedicated to
upgrading Professionalism on the Web. For your FREE
subscription:
http://www.MondayMemo.org/
============================================================
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------
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============================================================
6. This Week's Subscriber Web Site Pick - Alfred Mauro
Distributors
============================================================
http://www.alfredmaurodistributors.com
Alfred Mauro writes:
"Dear Elena,
I have been wondering for some time now if the small business
owner really can compete with the giants on the Internet? It
seems that companies like amazon.com who can afford to
spend millions in advertising are the ones that are making millions
in sales.
"My web sites have been on-line for over a year and a half now. I
have tried to promote my sites in the usual ways that a small
guy can afford. E-zine advertising, free classifieds, trade links
with a similar site, bids on goto.com, rocketlinks.com and
ah-ha.com, obtaining a merchant account even though I do not
make any sales, in addition to submitting to the search engines.
I also have an Internet Marketing Consultant that sends out
e-mail letters to targeted groups that have requested info about
sites like mine. So with all of that, I know that a lot of people
have visited my sites, but absolutely no sales. Is it because
I am unknown? Are people afraid to buy from me because they
never heard of me?
"This seems to be a problem all small business owners have in
common on the web. Have I hit it right? or am I the only one who
has a web site and doesn't make any sales?
"I would be very grateful if you would feature my web sites.
Especially since I sell gifts & collectibles and the holiday
shopping season is just around the corner. My other site sells
a comprehensive line of the most highest quality and purest
vitamins and nutritional health products that all health conscious
people can use year round.
Alfred Mauro
Alfred Mauro Distributors
http://www.alfredmaurodistributors.com
http://www.vitpower.com/amdistributors
860 - 651-5756"
*~*~*~*~*~*~*~*~
Alfred's plaintive cry is a common one. No, Alfred, you are by
no means the only one who has a web site and doesn't make any
sales! Not by a long shot. So, what is the average Joe
to do?
Well, in the first place, let's put the Amazon.coms of this
world in context and in their place. Sure, they spend millions
on
advertising and promotion and they may generate millions of dollars
in sales but, last I heard, they were bleeding and bleeding badly.
Sales do NOT equal profits.
That aside, however, they certainly do give the impression of being
mega-successful and that may well mean that they have an easier
time generating consumer trust and the sales that follow.
How does the average person compete? By using the one thing
that you have that the huge Amazon.com's don't. Personality.
It's trite to say by now, but the average visitor who is going to respond
to you must see your message an average of seven times before he
or she will do so. The percentage of visitors who will respond
is
something of the order of 2% - 3%. And "respond" does not mean
"buy"! Of the 2% - 3% who respond (by asking for more information
or whatever), only 2% - 3% of THEM will actually buy. That's
why
I keep saying, over and over again, that this is a numbers game.
You need to get site visitors in huge numbers and you have to
get them coming back time and again.
That, right there, is the problem with sites like Alfred's. The
site
itself is solid. Nothing wrong with it, it sells high quality
merchandise, is simple to navigate and understand. But why is
someone going to keep coming back to it?
My personal opinion (and I don't have any empirical research to
back it up, I'm just talking from my own experience and
impression), is that shopping sites should be subsumed within
a greater whole. In your position, Alfred, I'd be creating a
site
that, content-wise, is going to appeal to the same target market
as your existing site, but which has valuable content that people
will want to keep coming back to. Now, I don't know what that
site should be or what that content should be. That, right
there, is the tough part about online business, but once you
crack that, you're going to have an easier time. You should
make your existing shopping site a DEPARTMENT of your main
content-rich site. Once you attract a steady stream of loyal,
REPEAT traffic to your content-rich, sales of your products
from your product department will naturally follow.
I would definitely also supplement your site with an ezine.
That's THE best way to stay in touch with your website visitors
and develop a personal relationship with them. It's also how
you let your site visitors and ezine readers get to know you.
Allow your personality to come through. Amazon.com can't
do that. It's a corporation, not a person, it simply doesn't
HAVE
a personality. There's your competitive advantage. THAT'S
how the small business owner competes with the giants on the
internet. Is it easy? Hell, no. Can it be done? Yes.
Absolutely.
------
If you want your site seen by thousands, write and tell me
about it! But make sure it's one you've created yourself
or have had created especially for you. No self-replicating affiliate
sites please.
mailto:elena@fawkner.com?subject=website_pick
============================================================
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============================================================
7. Contest
============================================================
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============================================================
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------
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============================================================
8. Advertise in A Home-Based Business Online
============================================================
A zero tolerance policy applies at AHBBO in relation to
undeliverable mail. This means that the recipient address
for emails returned "undeliverable" (including where the
recipient's mailbox is full) is automatically deleted from
the AHBBO subscriber database.
This policy has been introduced to more accurately reflect,
in the subscriber numbers, the number of eyes who will
actually see your ad. Because AHBBO classified ad rates
are calculated on a $CPM basis, this policy is intended to
maximize the return on your advertising dollar.
Current ad rates and placement details are at
http://www.fawkner.com/adsubmit.htm
. Choose from single
ad placements, Ad Paks (4 ads for the price of 3), Super Ad
Paks (7 ads for the price of 5) and exclusive mailings.
============================================================
Do you like this ezine? Recommend-It(r) to a Friend!
http://recommend-it.com/l.z.e?s=446574
============================================================
9. Subscription Management
============================================================
Please note: email addresses for ALL returned mails are
automatically deleted from the AHBBO subscriber database.
If you have a free email account and want to continue
receiving this ezine, please make sure you clear out your
mailbox on a regular basis!
To SUBSCRIBE to this Newsletter
http://www.fawkner.com/subscribe.html
To UNSUBSCRIBE from this Newsletter
mailto:subscribers@fawkner.com?subject=unsubscribe
(Processing of unsubscriptions is automated. Please make
sure that your email is sent from the account you subscribed
with otherwise you will not be unsubscribed. If you've tried
to unsubscribe but keep receiving AHBBO, please make
sure you've tried to unsubscribe with the address you
subscribed with before contacting me.)
To CHANGE your Subscription Address
mailto:subscribers@fawkner.com?subject=change_address
and in the body of the email tell me what your old address
was and what it needs to be changed to.
If you find this newsletter valuable, please forward it
in its entirety to your friends, family and associates!
============================================================
10. Caveat Emptor
============================================================
Although all of the information presented in AHBBO is
published in good faith, neither the publisher nor the
editor accept any responsibility as to the accuracy or
otherwise of the information presented. By making use of the
information contained in AHBBO the reader assumes all risk
that certain information may prove to be incorrect.
All advertisements are accepted in good faith. However,
advertisers are solely responsible for the content and
accuracy of their classified advertisements and no
warranties are given, nor responsibility accepted, by the
editor or the publisher in relation to any classified
advertisement appearing in this publication. ALWAYS carry
out your own due diligence!
============================================================
11. Contact Information
============================================================
Elena Fawkner, Editor
A Home-Based Business Online
Contact By Email
http://www.fawkner.com
============================================================
All Rights Reserved