Programs for Home-Based Businesses

The economic recession of the early 1980's was especially hard on Northeast Ohio, resulting in unemployment rates well over 20%. With the prospect of immediate employment dim, many of the unemployed considered using their skills to start a business from their home.

While the U.S. Small Business Administration expects the number of home-based businesses to double by 1990, it estimates that less than 50% of those businesses will last 2 years, and only 30% will last 5 years. The major reason for the high failure rate isn't poor production or service, but a lack of business skills.

It was to improve the success rate of home businesses that an extensive program was begun in Northeast Ohio in 1982. The goal of the program wasn't to encourage the establishment of homebased businesses, but to provide a realistic look at the commitments and skills required to go into business. It was hoped that those who decided to open a business would be better prepared for the challenge. Likewise, those people who couldn't make the necessary commitment would realize that fact before they made an investment of time and money.

Starting a Business at Home

At the suggestion of an ad hoc advisory committee of local businessowners, a series of 3 evening programs titled, "Starting a Business at Home," was offered in autumn of 1982. The series dealt entirely with business techniques and wasn't product- or skill-oriented. Topics included taxes, recordkeeping, advertising, permits, and the effects of a home business on family lifestyle.

The program was so successful that it was adopted as a district-wide program in 1983, and the format expanded to 4 evenings. A panel of home businessowners was added to the program, as was information about pricing of goods and services. Also added in 1983 were programs for participants who had subsequently started a business and needed additional help. Topics offered included tax updates and establishing a business office in the home.

To provide information to individuals unable to participate in the workshops, agents in Northeast Ohio wrote a series of 10 fact sheets dealing with many of the topics. The fact sheets are now in their second printing, and nearly 6,000 sets have been distributed throughout Ohio and surrounding states. The Cincinnati office of the S.B.A. has used the fact sheets in their educational programs, as have several community colleges. The fact sheets were distributed at the ECOP-sponsored National Home Business Conference in St. Louis, and a national vending machine firm is using them to train new franchise owners. A set of 6 additional fact sheets were completed by the end of 1985.

Evaluation

Since 1982, the "Starting a Business at Home" series has been offered 10 times in locations throughout Northeast Ohio, with a total of 918 individuals participating. An evaluation mailed to participants several months after the series indicated that of those thinking about starting a business, 74% had decided whether to start their business by the end of the series. Of those who already owned a home-based business, 91% reported that the series helped them improve their business.

Of equal importance is the value of the follow-up classes for participants who started a business. Over 365 individuals have participated in 7 oneevening programs. Evaluations have been extremely positive, with 1 businessowner reporting a savings of over $500 in taxes as a result of information learned at the program.

Even though the unemployment picture in Northeast Ohio has improved, interest in home-based businesses continues to grow. A statewide newsletter, "Home Business News," is planned for 1986, along with selected videotapes. Also planned is a follow-up survey to determine if participants' businesses survive longer than the average two-year lifespan.