Printed in USA Today
by Nancy Rathbun Scott
Home based entrepreneurs have a lot in common with traditional business owners. For starters, home workers love the independence. The number one reason for starting a home business is to reap the rewards of effort personally, rather than handing the goodies to someone else.
But entrepreneurs working from a spare room do face special challenges. Credibility with customers, family conflicts, peculiar tax laws, local government regulations, office set-up, phone configuration and isolation plague many.
That's why more home based proprietors are buying franchises. "I suppose I could have done this on my own, but the progress would have been much slower," says Tom Loner, a Guardsman Woodpro franchise owner in the Denver area. With the Guardsman name and business system behind him, Loner quickly enjoyed profits from his furniture refinishing business. "I made money even in the first month. I was expecting to be in the red for up to a year, but it's a thirsty market and Guardsman went out of its way to get us jump started."
Some Unusual Problems
Besides the marketing and financial challenges that face all entrepreneurs, home based businesses confront added problems. Charlotte Luna, vice president of operations for CruiseOne, says her franchise company helps owners solve them all.
"For one thing, homebased business generally aren't covered under traditional insurance packages. As a franchisor, we can pass along an article that lists specific companies that have such programs or set up a preferred vendor relationship."
Home based franchise owners also can face resistance from local zoning boards. "There have been blockades in some cities, but we can counsel the agencies and provide information."
The franchisor also can lead owners through the maze of home based business tax laws. "We make information about tax benefits available and participate in related legislative activity."
And then there's the plight of isolation. "Sometimes it's not obvious that franchise owners need emotional support. We provide support services through our consulting staff. We even work to create mock scenarios so that staff understands what it can be like to feel very alone, sitting in a bedroom office."
Getting in touch with the emotional needs of a home based franchise owner requires thinking outside the box, says Luna. "We bring speakers like the president of the National Association of Home Based Business to our national conference or like the consultant who will talk about how to organize a home office."
Luna says the problems are real and smart franchisors address them. "We don't minimize the effort that goes into growing a business alone, from the home. People have to deal with issues like how to answer the phone and put a pot roast in the oven at the same time; or how to run the laundry while you're writing letters."
Not that the home based business doesn't have its plusses. With CruiseOne, for example, most of the transactions happen over the phone-and that means taking the work where you want to be. "Lots of travel agents resent having to work on Sunday. CruiseOne franchisees can work and watch the football game. All they have to do is hit the mute button. Or they can go to dinner with their spouse by simply putting calls into voice mail."
And then there's the business of children. "When we sell our Fruitfull bars at various events, it's a family affairs," says Marla Crouch, owner of Happy & Healthy, a franchise that makes frozen juice bars packed with chunks of fruit. "We take the kids and we set them right up beside the cart on bar stools and they sell the bars. Our children are five and seven years old, but they already know how to count change."
Parents and Retirees Vote Home
Entrepreneurs with children and those of retirement age make up two groups particularly drawn to home based businesses.
"We have people that have left their jobs so that they could be with their young children," explains Linda Kamm, president of Happy & Healthy. "And then there are those who just have to have their own business. One person-a franchise owner in Minnesota-up and left her job as a bank manager after 22 years."
At CruiseOne it's the same story. "A good portion of our franchisees are people with school aged children. Another group is couples in or nearing retirement. They're tired of going in opposite directions and want their lives to come together. For them, the idea of conducting business while looking out at their pool or the golf course is very appealing. They do it together, they do it right at home."
And then there are people like Tom Loner. He runs the Guardsman Woodpro franchise mostly from a cell phone. "I purchase 630 minutes of air time a month for $150," he says. In addition to chatting up customers from his truck, Tom answers the phone while he does his furniture refinishing at a customer's house.
What are these entrepreneurs looking for in a home based business? Flexibility.
"Typically ours is a white collar business," explains Dan Carlson, president of Adventures in Advertising. "There's no food preparation, no changing oil. With a homebased business your office is your client's office. And our franchise owners love the aspect of working out of the home. I started this company 20 years ago, out of my home and though I have great times now, there are times I wish I were back there myself!"
Kamm says half of the Happy and Healthy franchse owners are full-time, half are part time. "This isn't a retail business where people have to be there at certain hours. Profitability is the number one motivation. But flexibility-a business that can adapt to a lifestyle-is also important."
Franchisors Put Support Programs in Place
Most franchisors have an extensive training program to support home based franchisees. All have initial training, but follow-up is important, too. Luna says CruiseOne offers advanced training programs, regional meetings, a national conference, a website and even regularly scheduled internet chat sessions that address home based issues like how to set up an office.
Dan Carlson, president of Adventures in Advertising puts it this way. "Some people do get a little lonesome. Most of our franchise owners come from middle management positions in corporate America. But with a home based business, there's no peer group surrounding you. That's why we call our franchisees regularly, just to touch base. It reminds them that they are part of a bigger community."
The company, which sells promotional products and services to businesses, also publishes a monthly newsletter and has an internal email system that only franchise owners can access. "We have 65 very smart people who help each other," says Carlson.
Appearance Counts
Despite their attachment to mobility, franchise owners say that professional marketing tools impart the credibility a home based business needs. As Luna puts it, "It's vital to help franchise owners demonstrate that they are part of something larger."
In the case of CruiseOne, something bigger adds up to a lavish, four-color travel magazine that can be personalized with the addition of the franchise owner's name, face and personal advertisement. CruiseOne also provides intricate musical voice mail messages that can be adapted to the franchise owners home phone system. CruiseOne produces consumer videos for distribution to video stores and the library, too. "These all present us as the formidable business people we are," says Luna.
Formidable is important, agrees Bob Wilson, who owns an Adventures in Advertising franchise in Jacksonville, Florida. "Ninety-five percent of our success is going to be a result of our personal effort. But the tools and resources provided by the company are tremendous. If I were in business alone, I simply wouldn't have these."
One of Bob's favorites is the laptop computer loaded with the thousands of promotional products he is selling. "There are 400,000 products from 3,000 manufacturers in this business. For years, this was a catalog kind of industry. Now we can do searches based on ideas, budget or type of industry to identify exactly the right vehicle to reach our client's customer."
Marla Crouch agrees that credibility can be a problem when she's out pitching fruit bars to convenience stores. "What we have done to overcome that is semantics. We never mention 'home.' We say 'office.' When people ask our hours, we say, 'If we're not in the office, the phone will ring through to our house so that we won't miss any of your calls.' The keys is to start with a quality product and add great customer service. With that combination, we find we are very well accepted."
Franchisees Find Safety in Numbers
Unlike their non-franchised counterparts, franchisees have access to a pool of other business people eager and willing to share privileged information-their fellow franchise owners.
"I went through training with several other owners," says Wilson. "We talk regularly to share ideas, frustrations. And there's something else. My background is in health care, so I offers hints on how to penetrate the health care market. Others franchisees come from finance, insurance and so on. We find that each of these industries has unique aspects and we help each other."
Home Based Franchising Will Grow
Will the home based franchise grow? "Everything we read points to enormous growth in home based businesses," concludes Luna. "Even in our industry, where we're dealing with cruise lines that are huge corporations, I see the trend. Not long ago I called one cruise company's reservation department at the 800 number. The person on the other end of the line told me, 'I'm part of a test program in our corporation to have us work at home.' I had called an 800 number, but I had reached a home based employee."
Home Based Franchise Helps Couple Combine Kids and Work
Marla Crouch's baby was due in two weeks when she bought her Happy and Healthy franchise. Why did she do it?
"I had not been investigating franchise ownership, but before we got married, Dee and I had both looked at starting our own business. When I was expecting my first child, I was in a blue-suit, corporate job, travelling one week a month. Frankly, I was looking at taking a break, but Dee thought I should keep up my business skills."
The couple went to a franchise show. "Linda and the crew were there. They stuck one of the fruit bars in my mouth and I thought, 'Hmmmm.''
The Crouch's weren't immediately convinced they should buy, though-and frankly, the corporate offices weren't convinced either. "Initially I turned her down. There she was, new baby on the way. Adding a new business to the mix seemed like too much all at once. But she's turned out to be one of our biggest producers."
"We knew that the worse case scenario was that we'd lose everything that we put up financially," Marla explains. "When we considered, 'Where will that leave us financially?' the answer was simple. 'A little poorer.'"
In the end, the Crouch's CPA probably turned the tide. "He had been on the receiving end of one of my sales pitches and he told me, 'Your biggest problem is that you don't know anything about franchising. But you sure do know how to sell.'"
Bolstered by the expertise of an experienced franchisor, Marla discovered that how to sell was all she really needed to know.
® copyright 1999 Nancy Rathbun Scott
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