Typical Small-Business Ventures Part-3

Almost half of small businesses in the U.S. are home-based businesses-firms operated from the residence of the business owner. Between 1960 and 1980, fewer people worked at home, largely because the number of farmers, doctors, and lawyers in solo practices was declining. But since then, the number of people working at home has more than doubled. A major factor in this growth is the increased availability of personal computers and access to the Internet and other communication devices such as fax machines and cell phones. As computers technology evolves at a rapid pace and more workers prefer the flexibility of working from alternative locations, the Census Bureau predicts that the number of home-based businesses will grow even faster during the early decades of the 21^st century.

Operating home-based businesses can help owners keep their costs low. Without having to leave or maintain separate office or warehouse space, a home-based business owner can pour precious funds into the business itself. But financing a small business can be challenging. Some home-based business owners have even discovered the benefits of selling their goods through eBay, the online auction site. Andrew and Tracy Hortatsos, owners of ShadeSaver.com, sell 50 percent of their retail sunglasses through eBay. “It was probably the single most important thing we stumbled upon as far as allowing our business to grow significantly,” says Andrew Hortatsos. The cost of operating from home through eBay is far less than the cost of leasing, staffing, and maintaining a retail store at a high-traffic shopping mall, not to mention the far greater number of consumers eBay reaches. $ Other benefits of home-based business include greater flexibility and freedom from the time and expense of commuting. Drawbacks include isolation and less visibility to customers-except, of course, if your customers visit you online. In that case, they don’t care where your office is located.

Many small-business start-ups are more competitive because of the Internet. An estimated three of every five small businesses have an online presence today. But the Internet does not automatically guarantee success, as illustrated by the thousands of dot.com failures during the early years of e-commerce. Setting up a Web site can be relatively inexpensive and gives a business the potential to reach a huge marketplace. Tiny Salem Five Cents Saving Bank, a Massachusetts firm with only nine branches, has a significant presence on the Internet. It established that presence by acting quickly in the min-1990s, when Internet Banking was still an innovation. Consumers like the new service and low fees, and before long, Salem Five had attracted thousands of new customers. When bigger banks began adding Internet service, Salem Five changed its online name from salefive.com to directbanking.com and honed its focus to New England, where the bank already had a good reputation to build on. It continues to innovate and has opened branches with automated-teller machines and Internet kiosks offering videoconferencing with bank representatives. High technology coupled with concern for customer service keeps Salem Five in business even as the biggest banks spend millions of dollars on advertising. 

American business history is filled with inspirational stories of great inventors who launched companies in barns, garages, warehouses, and attics. For young visionaries like Apple Computer founder Stephen Jobs and Steven Wozniak, the logical option for transforming their technical idea into a commercial reality was to begin work in a family garage.