Home Based Businesses

On Monday, The Wall Street Journal ran an interesting article on home-based businesses (http://online.wsj.com/article/SB126246733831713647.html?mod=dist_smartbrief). The piece was really a how-to get started, what you need to think about in terms of setting up your home and how to be successful (draw boundaries between your home life and business life).

A couple of figures caught my attention, including:
- 52% of small businesses are home based businesses
- 93% of home based businesses do not have an employee

I pull these out, because it shows the size of the market as well as the dynamics. If you are going to target the home-based business market as part of our SMB outreach, you will need to understand that there are some unique needs and issues. First, because the business is based within the home there is an intense blurring between the individual's business and personal life. Sometimes this person acts and shops much more like a consumer than a small business meaning your channel should reflect this audience. Home businesses are much more likely to buy goods and services at retail stores such as WalMart, Staples, Office Depot, Office Max, etc and direct from a manufacturers web site. If you are currently selling your products to the SMB audience through an indirect channel, this will be an inefficient and ineffective way to reach the home business.

It is also important to have the right expectations when targeting this audience. The attraction of selling to small businesses is that there are several employees that have needs for software, PCs, etc while a home business is unlikely to have any employees.

When targeting home businesses make sure you speak their language. If your marketing materials are talking about growth and expansion, you likely will miss the mark. Not all businesses want to grow and often a home-based business is much more likely to be a life-style choice. This means that the individual wanted to work for themselves and is happy making a salary of X, but does not have greater aspirations. Or the home business could be a spouse who is trying to earn just a little extra income for the family. In either case, please make sure that your marketing efforts reflect the audience needes.

I would like to share one other tip and that is audience segmentation. Especially with home-based businesses this can be a crucial first step. I would encourage you to research the audience to discover which segment of people are most likely to benefit from your product and who will likely purchase your solution. You may find that you have a good target in home-based businesses that are woman-owned, product-centric and have a need for inventory management. This information can help you market buy industry, audience and even into a special zip code.

What do you think?