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Five home-based businesses to run now.

What's hot, why and how you can launch one for yourself.

There's no place like home - when it comes to starting a business. Especially now, with the unemployment rate soaring and corporate downsizing relentlessly displacing thousands of workers every month. To the laid-off toiler, the anxious second careerist and the enterprising self-starter with a dream, the home office is viewed as an attractive alternative to the traditional nine-to-five option, or lack thereof.

If you've been thinking the time is right to set up shop at home, you're not alone. Half of all businesses launched last year - about 1.5 million - were home based, and black antrepreneurs are well represented among those making their mark on the home front. Today, more than 850,000 African-Americans are working either part-or full-time from their homes, according to LINK Resources Corp., a Now York City-based research and consulting firm. Meanwhile, women - always looking for ways to satisfy both career and family needs - are starting these new businesses at twice the rate of men.

Why the dramatic rise in home work? Home businesses offer entrepreneurs the chance to embark on low-risk ventures (initial investments typically range from a few hundred to less than $5,000) that can become quite lucrative, while still allowing for the kind of flexibility that most companies can't offer. The average at-home business owner will earn $50,760 this year, according to LINK.

The five home-based businesses highlighted below are among the best bets in coming years. Selected on the basis of their low start-up costs, high marketability and income potential, all of them can be launched with no staff save one: you. In addition, they are positioned in industries expected to experience significant growth over the next decade: repair services, computer consulting, specialized services, support services and interior design. Here are some folks who are carving out successful niches for themselves in these areas.

Home-Sewn Success

When Cynthia Malone is not traveling the skies as a Delta Airlines flight attendant, she runs a custom dressmaking business out of her in Kenner, La., home. Her part-time enterprise with the upscale name of House of Malone features handmade career and evening wear. Since her home borders on New Orleans, she often designs extravagant gowns for Mardi Gras.

Malone, 41, has been sewing since she was 12 years old. She received her professional training as an assistant costume designer for the Karnes Theater in Missouri, and for Worlds of Fun, a theme park in Kansas City, but she chose to pursue a career flying the friendly skies.

Finally, in 1988, Malone turned her talents into a trade. She transformed her dining room into a sewing studio, using $2,500 in savings to purchase fabric, patterns, needles and a special cabinet with more than a dozen tiny drawers for thread, bobbins and needles. She got her first job for House of Malone by displaying design samples at a local fabric store, Sew Smart, which, in turn, passed her name and number on to interested clients.

Malone drew no salary the first year, choosing instead to invest in new sewing machines, industrial steam irons, line hemmers, a commercial cutting table and an industrial press. Malone's one-woman enterprise quickly became a family affair. Her husband, Michael, a Shell Oil Co. retiree who operates a carpet-care business out of their home, keeps House of Malone's books. Their four children also "have a hand in the business," Cynthia says. "They help me sew on snaps or buttons, whatever they can do."

Operating part-time, House of Malone grossed an estimated $4,000 last year - not bad given that annual earnings for custom clothiers typically range from $3,000 to $35,000, according to Kathleen Spike, founder of the Professional Association of Custom Clothiers (PACC). Spike, who works out of her Portland, Ore., home, says custom clothiers prices are usually based on hourly rates, which typically range from $20 to $25. Designers who streamline their product rather than produce one-of-a-kind garments can earn as much as $70,000 a year.

Malone, founder of the Louisiana chapter of PACC, plans to gradually reduce her flying schedule from its current 15 days a month, ultimately operating her home business full-time. She now works with an average of ten clients on a regular basis. That level of demand is enough to necessitate her carrying a portable sewing machine with her when she travels, so she can sew on the road - and even in the sky.

Riding An Impulse Into The Computer Biz

Randolph Carnegie was never trained in computer science. He was working as a staff assistant for Conoco Oil in Texas in 1981 when the PC appeared on the scene, and his interest was immediately piqued by the new technology. "I started working with the PCs quite a bit on my own time as a hobby," he recalls, adding, "I found out I had a natural aptitude for them."

Five years later, Carnegie had developed enough knowhow to launch a home-based computer consulting firm. From a loft overlooking the living room of his Houston townhouse, T.A.G. (Totally Awesome Graphics) Productions, was born. Carnegie started the company with about $5,000 worth of computer equipment he had accumulated over the years, and spent just a few hundred dollars on stationery and business cards. He also had a $30,000 nest egg to cushion his entry into the land of the unsteady paycheck. Asked how much time he spent mulling over his business plan, Carnegie says sheepishly, "The business was 50% research and 50% impulse."

His impulse panned out. By 1989, T.A.G. was earning Carnegie more than $100,000 a year - the high end in a business where typical fees run about $45 an hour. However, since relocating to Chicago in 1990, he has been unable to match this six-figure income. He attributes the drop to time spent developing a new client base and lifestyle changes that have accompanied having a baby in the house,

However, the 41-year-old entrepreneur has a plan to spark sales by restructuring the services he offers. Instead of tailoring each project to one client, he is trying to develop one product that will serve multiple clients. To increase his client base, Carnegie has worked on developing relationships with other computer consultants whose areas of expertise complement his own. "It's better to split the pie than not to have any of it," he reasons.

Carnegie's client list includes such major players as Allstate Insurance Co. and the National Black MBA Association. However, his bread-and-butter clients are small companies for whom he develops databases and customized computer software.

Aside from starting over in Chicago, Carnegie says the hardest part of his business was adjusting to the loss of a regular paycheck, especially during slow periods. "From the start, I was determined to stay with this business for the long run," he says. "You have to be committed. Otherwise, after the first bad month, you'd give up."

An Entrepreneur's Entrepreneur

Dolores Ratcliffe advises her clients not to start their businesses the way she did. She had only $5,000 in savings, not enough to cover her first year's expenses; she did not finish her research before she opened her door; and she chose a name that wasn't even remotely related to the entrepreneurial training and market research service she offers: Corita Communications Inc. (Corita is Ratcliffe's middle name.)

While Ratcliffe's clients may want to avoid her start-up mistakes, they would surely love to duplicate her success. Los Angeles-based Corita Communications is 14 years old and thriving. It boasts close to 50 clients, including small businesses and major corporations such as UCLA, Southern California Gas & Electric and Pacific Bell. Although she is vague about her 1992 revenues, describing them only as "competitive," Ratcliffe says she broke the six-figure mark after just five years in business.

A 50-ish self-tagged "Renaissance woman," Ratcliffe spent her early career as a school administrator in charge of training teachers throughout her district and helping them plan their curriculums. After 10 years, she parlayed that experience into training start-up entrepreneurs to plan their businesses. A feisty go-getter, Ratcliffe immediately embarked on an aggressive networking campaign to identify new clients. She joined and took leadership positions in business organizations, women's groups and the local chamber of commerce. In 1984, she even started her own group, the Association of Black Women Entrepreneurs, now a national organization with 600 members. The group is designed to provide professional support and encourage referrals. "The idea is to keep the money circulating within the group," says Ratcliffe. "Our first year out, we increased our individual businesses by 20%."

Ratcliffe notes that her own business did not turn a profit for the first year and a half. "It takes time to get your advisors in place, develop your client base and to figure out what you are doing," she explains. Today, Ratcliffe is a whiz at helping others to do those very things. Recently, she helped a fledgling restaurateur find the best location for her eatery, size up the competition and figure out an appropriate menu and price range for the area.

"The most important steps for any new business are identifying a niche, investigating your competition and knowing whether your business is ripe for development in the future," she explains. Given the number of new businesses cropping up each day, Ratcliffe's future looks bright.

A Handywoman's Tool Time

Simone Darrington began her construction career as a child in her grandmother's Louisiana backyard. The budding carpenter built a stop stool, erected a swing set and showed an incredible knack around the house for fixing things too complicated for many adults. She had precociously found her calling.

But Darrington was in for a rude awakening. After graduating from a vocational school that trained her in telecommunications repair, she spent five years trying unsuccessfully to enter the male-dominated carpentry and electrical unions. Finally, she opened her own business, Renovate It!, out of her Culver City, Calif., home. Darrington expects to earn $35,000 this year, her first full year out on her own.

"It had been a catch-22 situation," the 32-year-old handywoman recalls. "I'd go to a job site and would be told I needed to be a member of the union. At the union, they'd say I needed to have a job already." Last spring, after five years with the United Brotherhood of Carpenters and Joiners of America, a job referral group, and a stint with a plumbing company, Darrington began looking for work she could do at home while raising her son. After spending $300 to place advertisements in local newspapers, she set up shop in her garage. Over the years, she had already invested close to $8,000 in the tools of her trade, so she was more than equipped to start.

Darrington does it all: painting, hanging doors, installing electrical outlets and appliances such as garbage disposals in commercial and residential buildings. "People can't afford to buy new homes as they had in the past, so they're more interested than ever in fixing what they have," she says. She keeps abreast of new tools and products through constant research. Joining groups such as the Association of Black Women Entrepreneurs has helped her get referrals and learn about important work-related government regulations.

To boost her profits, Darrington is attending school for an electrical contractor's license. Once licensed, she can command double her current rates, she says. But Darrington is as determined to open the fields of carpentry and plumbing to women as she is to increase her own revenues. "I want young women to know they can choose a non-traditional career path and do well," she declares.

Typically, hourly rates for repair and installation work range from $15 to $100, depending on the skills required. "You can make a good living in repairs," says home business guru Paul Edwards, co-author of The Best Home Businesses for the '90s. "But if you don't like to make house calls, this is probably not the field for you."

Designing Woman

Rhonda Roman started an interior design business from her home in 1978, but when her cash flow slowed three years later, she was quick to pull out her safety net. For the next eight years, Roman worked as a special instructor for the Detroit Board of Education, while continuing to run her fledgling design business, this time on the side. She was determined to keep her home business afloat.

Finally, in 1989, Roman decided that there was enough demand for her services to devote herself completely to her home venture once again. By then, Rhonda A. Roman Interiors had established quite a reputation around Motown. She had put her stylish stamp on several renovated city buildings, including the Detroit Civic Convention Center.

Hertiming couldn't have been better: Her 1990 and 1991 revenues were in the $180,000 to $200,000 range, she notes, adding that they have continued to rise.

Despite her success, "many people still perceive interior design as a 'cute' business," says Roman, who holds a bachelor's degree in interior design from Eastern Michigan University. "And when I say I work out of my home, people often don't take my work as seriously."

It doesn't take long to realize that Roman takes the profession very seriously. So seriously, in fact, that she is active in the Coalition for Interior Designer Registration, a group which is pushing for state certification of interior designers.

Roman launched her business, which she runs out of the third floor of her home, with about $300. This money covered stationery, invoices, obtaining a tax identification number and investing in several manufacturers catalogs, which enabled her to purchase materials at a discount. Last year, she also bought a computer in order to facilitate billing.

Publicity, often a problem for young designers, has not been an issue for Roman, much of whose work is continually visible to the public. After she worked on the expansion of Detroit's Cobo Hall Convention Center in 1986, she was asked to design several government offices. Similarly, her work on several model townhouses has resulted in an increasing number of referrals for more residential projects.

Roman's most recent designs include lobbies and activity rooms for senior citizens buildings, as well as playrooms for child-care facilities. She works with an average of ten clients at a time, the majority of whom are African-American.

The expansion of Rhonda A. Roman Interiors is just on the horizon. The entrepreneur plans to bring aboard an assistant within the year. For Roman, who is married and hopes to start a family soon, working at home provides her with the flexibility she craves in the creative field of her choice.

For her, like so many other home-business owners, it is an attractive alternative to the nine-to-five regimen with its time clocks and commutes. Her workdays may spill over into long nights - but when they end, she's already happily at home.


You have an entrepreneurial spirit and a terrific idea for a home-based business. What do you have to do other than buy business cards and stationery? A lot.

Launching a business from home will enable you to bypass the costs associated with more conventional office space. However, it will not allow you to skip past the basic building blocks of a sound business. While there are no guarantees for success, Cynthia Brower, regional director of the Baltimore-based National Association of Home-Based Businesses, emphasizes that research and planning are a must.

As in starting any enterprise, a thorough business plan is essential, particularly if you seek outside financing. Your plan should include a detailed summary of your product or service, the type and cost of equipment you will need and a projection of profits and losses for the first five years. It should also show your grasp of the competition iii your market and how you will match up, as well as your target consumer and marketing strategies.

The following is a checklist for home-based business owners:

* INC., CO., CORP.? Learn the tax consequences and legal liabilities of being an independent contractor, sole proprietor or corporation and register the name of your business as the appropriate type. An accountant, lawyer or your local SBA division can help with this.

* PERMIT: Be sure to obtain and file all necessary licenses, permits or certifications.

* ZONING REGULATIONS: If you live in a condominium, cooperative or other privately regulated residence, there may be restrictions regarding conducting a business there. Investigate.

* INSURANCE: If clients will be visiting you on a regular basis, you may need liability insurance. Check with your home insurer.

* RECORDKEEPING: Keep careful records of your income and expenditures from the very beginning. They're crucial for tax purposes as well as for your own ongoing analysis of your performance. Detailed additional information is available through your local SBA office, trade organizations such as Brower's and such books as Starting & Operating A Home-Based Business, by David R. Eyler (John Wiley & Sons Inc., New York, 1990, $14.95) and The Best Home Businesses for the '90's by Paul and Sarah Edwards (J.P. Tarcher, Los Angeles, 1991, $19.95).
COPYRIGHT 1993 Earl G. Graves Publishing Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:B.E. Report on Small Business; includes tips on starting a home-based business
Author:Riss, Suzanne
Publication:Black Enterprise
Date:Nov 1, 1993
Previous Article:Banking on the man from Hope: small black-owned businesses are looking to the Clinton Administration to help open access to much-needed capital.
Next Article:Making money making toys: how black inventors are bringing innovative ideas to the toy market.

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