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THE WEATHER REPORT
This month’s column is dominated by new business ideas – although I also cover raising money, making business decisions and a couple of other managerial issues. Given the column’s emphasis, this is probably also a good moment to remind readers that one of the things the Storm Report Panel of Experts is particularly good at it is helping readers find new business concepts. Though, of course, in addition to helping you find a business idea we will also assist with every other aspect of running and growing your enterprise. I would also like to stress that I am always very keen to hear from readers and, although it sometimes takes me a few days to reply, I deal with all my correspondence personally.
Please note Sue Waddington has been ill this month. She asks to be excused her column.
New business ideas
Network marketing in the 21st century
The Tupperware party as an iconic image of suburban womanhood seems long gone. It’s hard to imagine, for example, the characters on Desperate Housewives attending such an event, unless it was played for viciously comic effect. Yet home parties, even in the era of dual incomes and online shopping, are still very much with us. The Direct Selling Association (www.dsa.org.uk) represent businesses with combined sales currently in excess of £1.8 billion, which account for almost 80% of the total direct sales of consumer goods in the UK. In America, the equivalent trade body believe that there are now over 13 million people involved in this form of selling. Discussion of direct sales companies invariably focuses on their multi-level marketing business structure, meaning each seller recruits and trains more sellers, taking account of their own sales and of those they recruited, and of their recruits. For sceptics, this calls to mind pyramid schemes and cultish manipulation. Advocates spin it as an entrepreneurial opportunity for stay-at-home mothers and tend to point to examples of this or that seller who has made huge sums of money or won a free holiday for outselling her competitors. Both views probably obscure why the practice persists and proliferates.
My friend Kate Scott originally started direct selling with the book publisher Dorling Kindersley and now represents a number of different companies. She does about eight demonstrations a month to which the hostess (a friend, a neighbour or an acquaintance) is expected to invite about fifteen friends. Kate points out that many of her hostesses and fellow direct sellers treat the business as a diverting hobby, and that most guests treat it as a night out with friends. She echoes what Thomas Hine (author of the book Populuxe) points out, which is that, while some cynics consider Tupperware parties commercial transactions masquerading as social events, for those who attend they are “more like a party disguised as a commercial transaction”.
If you do have a product you wish to sell, and you can’t afford the traditional means of distribution, I have to say that I believe you’d be hard-pressed to find a better method than direct selling. By the same token, if you’re looking for a small business to start from home then you should investigate some of the many direct selling opportunities now available. Either way, I recommend getting in touch with The Direct Selling Association. Of course – I’ll also be pleased to make suggestions if you care to get in touch with me.
Time for tea
Flying through London last week I managed to fit in afternoon tea at the Tea Palace, a tea-themed restaurant in trendy Notting Hill Gate. As an avid tea drinker (I was forced to give up coffee a number of years ago for health reasons), I have always been fascinated by the idea of launching a tea business of one sort or another. One idea I’ve considered is opening a chain of traditional tea shops, another is importing high-quality teas direct from India. Organic teas, latte mixes, herbs, fruits and spices, chai... however you stir it, teas are exotic, enticing and steeped in opportunity. Especially hot right now are ready-to-drink red, green and white speciality teas, which boast certain health properties. Well, when I say hot I really mean hot outside the UK. Take, for instance, Inko’s White Tea, founded in 2002. This year the company is projecting sales of over £3 million... not bad for a company that’s only been going for three years. Incidentally, if you’re tempted by the idea of a teashop, my advice would be setting it up in a densely populated, youthful area and offering a wide variety of speciality teas. And if you’re wondering whether teashops are hip, consider Moby, the popular musician, who sent tea’s cool factor sky high when he opened trendy New York City tea café Teany in 2002.
DIY meal preparation
American entrepreneurs are bringing a new concept to the table: do-it-yourself meal preparation. Customers attend sessions where, in just a couple of hours, they whip up enough meals to last a month. Once frozen, these meals become no-hassle dinners at a later date. Offering fun, stress-free cooking, this business idea has reached (groan, groan) boiling point, with franchises like ‘Dinner by Design’ and ‘Dream Dinners’ helping to spur growth. If you’re a keen cook (or even a professional chef) and you’re looking to start a business in what promises to be a growth area, consider setting up a DIY meal-preparation service.
Following the paper trail to profit
One of the strangest side effects of the information-technology revolution has been the huge increase in the amount of paper used by both business and private individuals. Electronic communication, far from saving the world’s trees, appears to be dooming them to even earlier destruction. For the entrepreneur – especially the environmentally minded one – this does present a couple of interesting business opportunities. The first of these is document storage. Once upon a time this was a service used primarily by solicitors and accountants. Nowadays, however, it’s a service that has much wider demand from businesses of every size and type. What’s more, the beauty of document storage is that if you’re clever you can get into it with very little capital investment. Getting a free rental deal on a hard-to-let commercial property is by no means impossible. All your other expenses can be charged straight back to your clients, including storage bins, transport and other services. Really, you could probably get into this business for a few thousand pounds. The other huge opportunity is, of course, that of document shredding. I’ve mentioned portable shredding franchises in previous issues of The Storm Report, and so I won’t re-visit the same territory again. Suffice it to say that on-site, secure shredding is a growth market where demand currently outstrips supply.
Get into films
Well, technically, I should say get into videos. With recent events like 9/11 and the London bombings fuelling terrorism fears, we are seeing an increased interest in security and surveillance products. Video surveillance cameras are a huge part of that trend. One firm estimates that surveillance cameras will be a £1 billion market by 2010. While Simon Harris, senior analyst at IMS Research in Wellingborough, England, believes much of the opportunity lies in software, particularly video-content-analysis software. The applications, while widespread, include the ability to analyse live or recorded video streams to detect suspicious events, activities or behavioural patterns. One market leader is ObjectVideo in Reston, Virginia. The multimillion-dollar firm creates security-software products currently in use by several airports and at many national border checkpoints. IMS Research, by the way, also predict that residential users will be a huge market. As the technology gets out into the mass market, the opportunity is there for somebody to act as a channel for manufacturers. Anyway, if you’re interested in getting into this business, you could do worse than visit the Securities Industry Association (for America) website – www.sia.com – which has a lot of information on this topic.
The ‘fractional ownership’ trend
My friend Joe has just bought himself a share in a private jet. He’s worked out that if you fly less than 40 hours a week fractional ownership is a much better deal than owning your own. Since I’m a budget flyer rather than a billionaire flyer, it’s not terribly relevant to my own requirements. However, the idea of fractional ownership does seem one worth exploring. We’ve seen it for homes in the form of timeshares for many years. Now we’re seeing it in planes. Could there be other products to which fractional ownership might be applied? Cars? Golf clubs? Expensive watches? Antique furniture? Art? I have a strong feeling that fractional ownership is going to become increasingly popular in future years. Remember, you read about it here first.
High-tech recycling
It’s the digital age, and we’ve got a ton of technological gadgets to dispose of – from old laptops and monitors to mobile phones and broken TV sets. What’s more, under new EU rules manufacturers are becoming increasingly responsible for disposing of redundant products. The technology recycling – or e-cycling – business is growing exponentially. To enter this market, it seems to me, you must start by finding a niche. Possibilities include recycling and refurbishing mobile phones for sale in developing countries, disposing of large companies’ defunct tech equipment or specialising in data destruction for old computer gear. Clearly, the logistics of transporting and recycling e-waste can be challenging. If you’d like to read more about the subject, take a look at www.oss-spectrum.org – an e-waste specialist based in Tujunga, California – that publishes information for e-cycling start-ups on its site.
Medical information
One of the most popular private subscription newsletters ever published was called something like What Your Doctor Hasn’t Told You. Other highly successful newsletters include the Harvard Health Report and the Berkeley Health Report. Go online and you’ll find a raft of services designed to provide medical information to the general public including, of course, the NHS’s own fantastic website. However, in many respects the huge volume of information about medical topics causes as many problems as it solves.
For instance, the other day I wanted to discover about a particular medical complaint and found myself overwhelmed by the volume of available data. Some specialists appear to be saying one thing; others another. It was very difficult to come to any firm conclusion about the condition and the correct treatment course to follow. This got me thinking. I believe people would happily pay for a well-written, properly researched information database that summarised all the available information on any particular illness or disease – a service that looked at traditional medical and alternative medical solutions.
It would be a big undertaking, but one could do it disease by disease, as it were. One of the benefits one would offer would be no advertising. Another would be that the service would not be connected to any particular medical body or patients’ group. Illnesses and disease are both very political. This is one of the reasons why it’s so hard to find good, reliable information. Incidentally, ‘patient advocacy’ is becoming big business in the United States. Navigating the dizzying medical-care map can be both time-consuming and confusing. Add in long waits and runarounds and you’ve got a lot of discouraged people aching for a solution.
Though not a cure, patient-advocacy services aim to facilitate the relationship between individuals and their health care, from locating the best doctors and specialists to research and treatment options and handling insurance claims. Dr Abbie Leibowitz launched one of the first patient-advocacy services in 2001 with four other former Aetna US healthcare employees. Initially, they planned to offer their services as high-end perks for executives, but the business leaders they spoke to shared the same sentiment: all employees would benefit from such a service. Last year, they turned over $8 million in sales.
Liquid profits
I can’t quite decide whether this is a good idea or not. At the British Franchise Exhibition in January, I noticed a new franchise dedicated to selling bottled water. Founded in 2004 by three experienced retail professionals, Aqueous Wholesale have created a national water-distribution company that will make water more accessible to retailers. Believe it or not, the company offers customers a choice of more than 250 varieties of bottled water. The bottled water market is, of course, huge and growing. This year it’s expected to reach £2.6 billion in sales in the UK alone. This makes it the third-largest soft-drinks category behind cola and fruit juice.
More than half the UK population now drink bottled water – in excess of two billion litres of the stuff every year – so there is no doubt the consumer demand exists. For an investment of £20,000, an Aqueous Wholesale franchisee receives full support to launch, including van branding, sales and product literature, signage, uniforms, stationery, central marketing support and a range of training provisions. Potential customers include schools, cafés, theme parks, restaurants, gyms, hotels, golf clubs and nightclubs. The business model is based on developing a critical mass of customers within a tight geographical area that exploits the limited provision by non-specialists to suppliers. This keeps distribution costs and travelling times down to a minimum, maximising returns per customer. As I say, I’m not sure if this is a brilliant concept or a duff one. But if you’re looking for a different sort of franchise, I guess you could do worse than look at the Aqueous Wholesale website at www.aqueouswholesale.com.
Wood you believe it?
While on the subject of new UK franchise opportunities, another that caught my eye was Pinewood Lodges. You can probably guess what this company does. They offer a range of high-quality log cabins, homes, offices and garden buildings – all made from – umm – pine wood. It is certainly true that demand for these types of buildings is growing. Not only do they cost less than traditionally built alternatives but many don’t require planning permission. Construction time is also, of course, much faster. Anyway, if you’re interested in this franchise operation, you can call Pinewood Lodges on 0800 026 2262, or visit their website at www.pinewoodlodges.com. I’d be interested to hear from any reader who decides to explore this further.
Starting a home-based business
Before I leave the whole subject of business ideas and move on to other topics, I thought I might devote a little space to the perennially popular subject of starting a home-based business. Before I look at a few different possibilities, let me outline some of the basics of running a business from your kitchen table, garage, attic or spare bedroom.
First of all, pick a business you’ll enjoy. In searching for the right business to start, make sure that you choose something you love to do. You’ll be spending a lot of time making the business work, and so you really ought to feel a genuine passion about it. There are probably business ideas that will occur to you which would do well in your community, but if you don’t love that particular type of business skip the idea and keep thinking.
Focus on your hobbies, interests and talents for ideas. In researching the type of business you would like to start, make a series of lists of what you’re interested in and see what you’re good at. Are there any common denominators? Do you like sports or fixing things? What types of business could you start that relate to your interests? An individual who loves parties and music might want to consider starting a mobile DJ service.
Do remember to make sure that you comply with local planning regulations. For instance, if your home-based business means that you’ll have to have huge trucks delivering goods, beware: your neighbours might not like it and might turn you in to the local authority. You’ll not be able to set up a restaurant at home, or dry-cleaning business, or a commercial car park right on your front lawn.
Develop a big business image. Most of your customers might never see your office, so impress them with your professionalism and attention to detail by selecting a good-looking stationery system consisting of a high-grade letterhead and business cards. Get a separate phone line so that no-one answers the phone in an un-businesslike way. Either use an answering machine or have your phone answered by an answering service.
Check your insurance cover. It’s possible you may need to increase your liability insurance or add on other types of cover.
Don’t forget marketing. Develop a way to generate clients. I consider a website almost mandatory for any business in this day and age. As with your stationery, make sure it gives you a big business look. Other things to consider include developing a flyer, getting involved in local clubs and other networking opportunities, sending out a press kit to local newspapers, preparing a direct-mail piece, advertising, giving speeches at a local club or gathering, sending out discount coupons, attending trade shows as a guest or exhibitor... I could go on and on, but you get the idea.
Appoint an accountant. Even though you may plan to do your own books and taxes – you should take professional advice when you set up.
Choose a good name. If you want advice for this, write or email me and I’ll be delighted to help. (In fact, if you’re starting a home-based business, I’d be delighted to enter into as long a correspondence as you’d like.)
Before I look at some individual home-based business ideas, there’s one other point that I’d like to make. The secret to almost all business success is planning. Just because you are starting your business at home doesn’t mean you shouldn’t have a detailed business plan. We publish a great deal of information on writing business plans, and, if you don’t have copies, please do get in touch with the office so that we can send some to you.
So, what about some home-based business ideas? Here are 22 suggestions for you to think about. Again, I’d like to emphasise how willing I am to enter into correspondence from any reader who wants to take one of these ideas further.
1. Landscape design
If you’re good with a computer, check out the various landscape and garden design programmes available. You can use these to help start and run a landscape-design business for your clients. You don’t necessarily have to do the actual planting or hard landscaping, either, as you could pass this on to other businesses that specialise in these areas.
2. Make and sell a food product
Do you make a sauce, salad dressing or other food product that people say you should market? Then do it! Investigate with local health officials if you can produce your recipe at home. Remember: you must also discover what information needs to be included on your labels.
3. Kayak/canoe rental
If you live near a lake, pond, river or even the sea, you may be able to make some cash renting out kayaks and/or canoes to customers. Offer to drop off and pick up the canoes and kayaks, and make sure your customers sign an agreement releasing you from all liability should any accidents occur. You must take legal advice if you’re considering this business area.
4. Personal assistant
If you’re good, and I mean really good, with details and you’re a perfectionist about the jobs you do, you might start a business hiring yourself out as a personal assistant to your clients. You could do everything from problem-solving and writing letters to handling your clients’ other staff. Your clients might be small-business owners who need an occasional right hand, or they might be home owners who have too much to do.
5. Market your arts and crafts
If you make jewellery, art, photography, distressed furniture, baskets and so on – work out how you could get paid to do it. There are plenty of books on this subject available – many with an emphasis on how to market your arts and crafts. You could sell at fairs or directly to stores, or even to mail-order catalogues.
6. Open a bed and breakfast or guesthouse
If you’ve got an extra room or two, could you be letting it out? This is a great business to start, especially if you live in a busy tourist or business district.
7. Chimney sweep
Do you know how to clean a chimney? If you do, it’s money in the bank for you. If you don’t, you can learn. The equipment is readily available (you’ll need a long brush with a telescopic handle, gloves and a few other items), and demand is increasing with the growing popularity of wood-burning and other solid-fuel stoves.
8. Plant service
Do you have a green thumb? Are you lucky with plants? Then consider starting a plant service. This business is similar to a pet-sitting business. You’ll care for plants when people are away on business trips or holidaying. You can care for the plants in their home or yours. You can also start a plant business just geared to commercial customers. You sell them the plants and then you come by once or twice a week to maintain them.
9. Book-keeping for small businesses
If you’re handy with numbers and can master some of the accounting software programs available, you can start a business offering book-keeping and accounting services to small-business owners who haven’t the time or inclination to set this type of system up for themselves.
10. Antiques shop
There’s no reason why you can’t buy antiques and collectable items and sell them from your home. You could just open for weekends or – if you live in a suitable location – you could open every day. You can also sell antiques that belong to your neighbours and take a cut for your display and sales service.
11. Lighting design
Whether you start this business for residential or commercial clients, you’ll be installing lights in gardens, walkways and – obviously – homes. You may be selling everything from lamp-posts and security lights to decorative lights and Christmas lights. You’ll buy the goods wholesale and then re-sell them to your clients for a profit. Check out what’s on the market, and also have a look in your local Yellow Pages to see how much competition you have in your area.
12. Car-buying service
You interview your clients to determine what their needs are, and then begin searching for their perfect car. You can establish relationships with a couple of car dealers so they can help you get good deals for your clients. They’ll know you’ll keep customers coming to them if they offer good rates. Even if you only charge £100 or £150 per search, you can easily be making thousands of pounds a month from this service. Increasingly, consumers don’t want to deal with car salesmen or to have the bother of searching on eBay or an equivalent site.
13. Crafts co-op
Could you find the space to invite 50 or 100 craftspeople to set up tables and sell their wares? If you can, why not set up a crafts fair? You don’t sell anything but table or booth space. The craftspeople will be happy to pay you between £15 and £30 a day. Some crafts co-op entrepreneurs also take a cut of the total take for the day too. Make sure that the building you choose has sufficient parking space and toilet facilities. It will be your responsibility to advertise the fair. After all, your stall holders won’t come back and rent your space if the customers don’t show up.
14. Window cleaning
Window cleaning is a business that, while you don’t actually work at home, you do run the business from home (sending out flyers, making calls to place ads, calling customers to get business and so forth). There’s almost no one out there who doesn’t consider the task of window cleaning a disagreeable necessity. You come to the rescue and make some good money for it. Think of all the potential customers in your residential area; now consider all of the businesses that would avail themselves of your services. You’ll be booking clients on a steady basis if you do a good job. You won’t need much in the way of supplies, and as your business grows you’ll be able to employ other people to do the hard work.
15. Handyman
Are you handy around the house? Wouldn’t it be nice to get paid for it? There are probably plenty of people in your own area who would like to avail themselves of your handyman services. You might think it’s simple to install a light socket, put up moulding, change a door knob, repair a broken door hinge or make some bookshelves... but most people do not. Promote your business by word of mouth, flyers or a small advertisement in the local newspaper.
16. Bicycle repairs and bicycle sales
You can turn your love of bicycling into a money-making enterprise by advertising that you repair and sell bikes. This type of business can translate into any hobby from skiing to roller-blading and from sailing to golfing. Take a look at your hobbies and see if there’s one with a similar, marketable potential.
17. Vintage clothing
All you have to do is hang your clothes – they can be yours, you could have bought them or they could belong to friends and neighbours – on a few garment racks and advertise! Host nostalgic weekends such as ‘Return to the Seventies’ and display all your polyester pants, tightly knitted sweaters, platform shoes and 8-track tapes.
18. Children’s parties
You can start a business planning parties for children. You can buy all the party food and drop it off, or you can also provide the cake, the entertainment and even be on hand to supervise these events. If you want to build this business, employ child carers, teachers or even actors to manage the parties for you.
19. Catering rental business
Have you ever given a party and not had enough plates, glasses or cutlery to go round? There are plenty of people in this predicament, including many catering businesses, and you can start a business just renting your equipment out to them. You’ll obviously have to buy sufficient equipment to accommodate at least a hundred place settings or more. You may also have to have a van to deliver and pick up the dishes at the end of the event. Make sure you have one or two heavy-duty dishwashers or invest in a restaurant-style dishwasher if you expect to be doing a lot of really big jobs.
20. Old book and magazine dealer
You buy up old books and magazines and sell them for a profit. Your main source will be garage sales, house sales, charity shops and car-boot sales. Obviously, you’ll need to do your research so you know what to buy. You could run the same sort of business buying and selling CDs, music albums or any sort of collectible.
21. Tool rental
Do you have, or could you buy, tools that you could be renting out? If you do, why not start a business renting tools and other DIY equipment to people who need them for a limited time and limited use? Any rental business – with good marketing – is always a sure-fire winner, especially if you’re operating it from home and have low overheads.
22. Knife sharpening
Just about everyone has knives at home that really need to be sharpened, but they don’t seem to get around to it. Either offer this service from home or from a van. You may also find quite a few restaurants and other catering operations will pay you to sharpen their knives too. It’s worth getting professional training before you start. For some reason, this is a much neglected area where demand definitely outstrips supply.
Finance
As I sat down to write this column, I realised it had been some time since I offered any advice on funding and financial management. So here are a few different ideas on these two key subjects.
I’ll start with the thorny issue of raising money for a new or existing business. In my experience, one’s success in this area is directly linked to the quality of the business plan. I’ve never seen anyone with a good business plan fail to raise the cash they need to get their enterprise off the ground. What’s more, in many businesses, if you’ve got a good plan, you’ll be able to go to your customers or potential customers (or your suppliers) and raise money from them to help you get started. More than once, I’ve launched businesses with the help of loans or investment from my customers.
This leads me to another important point. If you’re looking for business funding, tell absolutely everybody you know. Word of mouth really works in this area. Where else should you look? Here are some other ideas:
The other finance-related subject I want to bring up now is that of getting invoices paid. This is a constant problem for small businesses. Here, to help you, is a list of tips that I was recently sent by an accountant friend. (I’m afraid I’m not entirely sure where they come from.)
Further information and a free credit-management guide called The Better Payment Practice Guide to Paying and Being Paid on Time can be found on the Better Payment Practice website www.payontime.co.uk.
Making use of decision trees
Over the last five years a new strategy, which claims to forecast the results of a course of action with uncanny accuracy and so increase your chances of making the right decision by up to 75%, has itself achieved spectacular growth. It’s called the ‘Decision Tree’, and in plain English it’s a diagram showing alternative choices along with their risks and consequences. By producing such a graphical representation you can, apparently, increase your chances – very dramatically – of making a right decision.
Decision Trees are, in my opinion, more a tool or discipline than some magic formula. Nevertheless, I have used them myself and I have found them extremely valuable. If you’d like to learn more about them, I can recommend four different websites covering the subject. These are: