Building a successful home-based business - includes resources for the home-based business owner

Black Enterprise, Sept, 1997 by Wendy M. Beech

To drum up business for your home cleaning service, list your company name in the Yellow Pages or distribute flyers in your neighborhood or business district. "I ran one advertisement for three months, got two customers, and from there it has grown," says Harbor, who now has more than a dozen regular customers. Fees for house cleaning range from $10-$20 per hour and $50-$75 per day. Harbor, 50, charges by the house. "It depends on how large the house is, how much activity there is and how often the client wants it cleaned. It can range anywhere from $45-$100 or better," she says.

Most cleaning businesses are perceived as low-status operations, so image and professionalism are everything. You must be willing to roll up your sleeves and work hard. "My business is taken seriously because I put serious work into it," says Harbor. "When customers walk into a room, they don't see dust and spider webs still in the corner. They don't see crumbs at the edge of the counter cabinet, and the sinks sparkle because they get a royal cleaning treatment."

For additional information about cleaning services, contact: Cleaning Consultants, Inc., P.O. Box 1273, Seattle, WA 98111; 206-682-9748.

PROTECTING YOUR HOME BUSINESS

While operating a home-based business is low-risk, it is still a valuable investment that should be protected through business insurance. Although your residence may already be insured for fire and other damage, never rely totally on your homeowner's policy to cover your home business. "Most homeowner's and rental policies will exclude business activity, so you would have to look for what is called an 'in-home business policy,'" says Mary Smith, president of M.S. Technical Services Inc. in Gaithersburg, Maryland.

Smith, 39, says most companies writing this type of policy will include personal business property, general liability and loss of income. However, some home-based businesses need special coverage. For example, a food manufacturer should have product liability insurance to cover if someone gets hurt using a product. Home-based businesses that have several employees need to provide workers' compensation coverage. You may even need additional automobile insurance if your present policy doesn't cover injury while running business errands.

When looking for coverage, consult an agent specializing in home-based businesses. Have your agent conduct a risk analysis of your property to determine the value of equipment and furnishings. When negotiating a policy, be sure that coverage on all business-related materials is for the full cost of each item--not the depreciated value. Depending on your carrier and the type of business, in-home business policy premiums can cost $150 and up per year.

For more information on how to insure your home-based business, contact: The Insurance Information Institute, 110 Williams St., 24th Floor, New York, NY 10038; 212-669-9206.

GETTING YOUR FINANCIAL HOUSE IN ORDER

When Uncle Sam comes calling for his piece of your home business, you want to be ready. Set up a detailed record-keeping system and keep track of all business-related expenses. Such computer software programs as Quicken offer easy-to-follow formats for separating business and personal expenses. Never mix the two. Also set up a separate business bank account.