Part 3 -Are You a Canidate for a Home Based Business?

By Jean Newell, Boomerprenuer

Were you born between 1946-1964? If so and you’re thinking about starting a home based business, you will be joining the ranks of the fastest growing segment of the population becoming entrepreneurs; baby boomers.

At midlife and beyond, more and more people are searching for new financial solutions. Many boomers ready to retire now find their portfolios aren’t as solvent as predicted and the need for additional streams of income has become a necessity. A home- based business would seem to be the perfect solution.

Business gurus suggest if you do something that you love, you’ll never work a day in your life. The truth of the mater is, you will work longer hours than ever before for little or no income as your business slowly develops. It may seem obvious, but if you’re still employed don’t quit your day job until you’ve done your due diligence.

Here are some tips to consider when planning a home-based business:

1) Make sure there is a need for your new business, service or product. Hold focus groups with your friends, family and associates to get their input on your business idea.

2) Keep your costs at a minimum. Work out of your home as long as possible. Don’t be tempted to rent a building, office or warehouse space until it’s absolutely warranted.

3) Take advantage of the free advice, counseling and seminars offered by the Small Business Administration and other business associations found in your local universities. These organizations offer seminars on marketing, computers, bookkeeping and finance. This is also an excellent opportunity to network with other entrepreneurs.

4) Keep a file of business cards of all of the people you meet. Enter their contact information into an electronic database. Stay in touch with these associates every couple of months by email or postcard with a short scenario of your business progression. These first business contacts are your building blocks to your networking database.

5) Find a mentor who will help guide you through the initial phase of operation. This person can be retired from the same business you are exploring or currently employed in a non competing field.

6) Research your field. Are there any licenses or special affiliations you will need to obtain? Does your municipality or homeowner’s associations allow a home based business?

7) Create a business plan and determine what funding you will need for: start up expenses, equipment or inventory of goods. Because of the subprime mortgage crisis, banks are far more conservative now than in the past few years. Their main focus is on your ability to pay back the loan as opposed to what the money will be used for.

I found as a new business it was a challenge to find funding. Several years ago I needed a short term loan to fulfill a large order with QVC. I assumed because I had a purchase order it would be simple. Every bank I went to said “How long have you been in business?” Unfortunately, four months was not the answer they were looking for. Luckily I had previously opened a home equity loan which had a -0- balance, which I used.

If you are currently employed, obtain a line of credit now, while you have the necessary income to qualify. Don’t make the mistake of trying to get a loan after you retire or leave a job. You may need to explore other avenues as well. Does your retirement fund have a pay out or private loan associated with it?

As a Boomer you may be tempted to cash out a life insurance policy or your 401K. Here lies the difference between Boomers and their junior counterparts. Younger entrepreneurs can afford to make a few mistakes and still have time to financially bounce back, while Boomers may not have sufficient time to make up a financial loss.

In summary, if a home based business is in your future, plan ahead for funding, research your field, use the educational facilities of the Small Business Administration and colleges to increase your odds of success.

Focus groups step #2 Exploring the possibilities

You have your idea for a new widget, now let’s see if the world agrees with you. Start by sharing your idea with friends and family. Get their feed back. If you can survive this step you’re ready for comments from potential customers. But let’s first examine our immediate group .... “the family”.

What I have personally experienced as well as shared knowledge from other entrepreneurs is: friends and family are divided into 3 groups.

1)Those that don’t want to see you get hurt so they are the protectors. They want you to stay at your current job and dabble in your “little” business. They don’t want you to spend any money or take any chances. They want to keep you safe from failure.

2) Then there are the naysayers. If the truth be told these people are jealous of anything you do. They appear to want the best for you but in reality they don't want you to succeed. Plus,, they don’t seem too crazy about the idea anyway. Comments from this group go something like this "I've seen other products like that. There's nothing new in that idea". Or "it will cost a fortune to invent a product and what do you know about that anyway".

3) Then there is, “the worshiper”, the relative or friend who loves everything you do. You can do no wrong with these people. You hear phrases from them like, “You’ve got what it takes” and “How can any company or customer resist you“. Or "Oprah will be giving it to her audience as her Favorite Thing." If you hear comments like that ....take it in stride.

Now lets find some real opinions that you can use.

You'll want to hold a focus group. What’s a focus group? It can be an informal meeting with one person at lunch or as elaborate as an advertised event facilitated by a marketing company, where the attendees are paid for their opinions.

Your focus group whether it’s 1 or 8 should be made up of your target audience. As an example, my first product ,the Personal Utility Pouch or PUP was originally invented to hold my business essentials. A professional tool belt of sorts. During the concept stage, I approached my fellow associates and asked their opinions on the size and design as well as the material. It would not have made sense to get the opinions of say; teen age boys if that wasn’t my potential customer.

Another inexpensive way to reach a lot of people is your email list. Send a short letter asking them for their opinion or advice. Don’t worry at this point that someone in cyberspace will be “stealing” your idea. In your email you’re not going to disclose what you are exactly going to create only the solution to a problem. Using the PUP as an example, I wrote a letter to my email list with the following question.

Have you ever had to call your own cell phone to find it?

If so, I would like to ask your opinion. I have invented a wearable organizer to hold my multiple electronic devices in addition to my daily essentials. It will not look like anything else on the market. When worn around the waist it remains flat and could easily be hidden under a shirt or jacket. You will also be able to wear it over your shoulder or across your chest.
Question: If you were to wear this accessory on your waist, would 6 X 8 inches be about the right size? Yes, No Ask them 3 or 4 questions with yes or no, or multiple choice questions. Perhaps colors, size, price range, frequency of use. Keeping in mind when it’s only a concept, people will answer logically but when they can actually see and feel the product they will react emotionally.

To recap: Your first focus group is strictly to gather facts. You’ll have many more focus groups in the future as your product materializes.

Thoughts from a Baby Boomer Inventor

The first thing you need as a Baby Boomer inventor is an IDEA.

We've all had those moments when we've asked ourselves why a specific item, service or process works the way it does. For an example: Why do many scissor manufacturers' package their scissors in a sealed plastic container where the only way to open the package is with a pair of scissors? Or the instructions on the eyeglass repair kit are so small you can't read them without wearing your glasses that you're trying to repair. Is it just me? Or are the manufacturers of our everyday items just playing with our heads? Whatever the case, this is the perfect opportunity to put on your creative hat and when these little things start to bug you, find a solution to the problem. This is how the process starts. When something doesn't work right or the product needs to be bigger, smaller in a different color or completely redesigned instead of just shaking your head in disgust, get creative.

In future posts I'll take you through the very beginning stages of how I took an idea to market. In the mean time, start looking around for ways to improve things you use everyday.

Watch my favorite business show CNBC's The Big Idea with Donny Duetsch who will inspire you to go forward with your ideas.
Until next time,
Invest in yourself, Jean Newell
www.newcomarketing.com

Dear Friends and Associates,
I've created this information blog to help you with your new business venture.
Whether it's marketing, the invention process, or general business tips, I will be sharing my thoughts and ideas with you on a regular basis in the future. Please see the 2 minute interview video below to get an idea of where the future lies with Baby Boomer entrepreneurs.
Invest in yourself!
Jean Newell