After enduring five layoffs from jobs in the corporate world, Terry MacRae decided that traditional forms of employment weren’t working for her.”Nothing felt secure, and I just got sick of it,” she said. Today, MacRae is a virtual assistant, working from home and enjoying the peace of mind that comes with being her own boss.With the national unemployment average hovering at 9.6 percent as of August 2010, and Colorado’s rate hardly better at 8.2 percent, many people are looking to alternative forms of employment. Instead of the typical 9-to-5 job, people are building a business from their home.Home-based businesses are normally separated into four categories: strictly online businesses, online and face to face (direct marketing) sales, multi-level marketing and ground-level startups. Some businesses fall into more categories than one. Strictly online businessesOnline businesses operate almost exclusively via the Internet. MacRae’s virtual assistant business is one type. She doesn’t do face to face marketing or selling. Her company is based on clients, usually small business owners, who hire her to do the jobs of typical employees. “Many small business owners don’t want to have employees, so they contract people to do the work for them,” MacRae said. “My clients and I talk all the time, with this you get a real partnership.”Six years ago, she heard of the Assist U organization that trains and supports virtual assistants. The investment was roughly $3,000 for the training, but MacRae is now a trainer as well. With anywhere from 300 to 500 virtual assistants working together to pair up prospective clients with the appropriate assistant, MacRae chooses which client she wants to work with. If she doesn’t think she can meet their needs, she helps match them up with someone who will.Other types of online businesses include auction Web sites, survey-taking Web sites and online marketing companies. Startup costs can be minimal; the hours are flexible; and, as a home-based opportunity, there is no need for a storefront, which significantly cuts down on the overhead costs. A computer, access to the Internet and hard work are what it takes. One major disadvantage is the number of scams in the online world, such as companies offering home-based opportunities for a certain amount of money, but in the end they take the money and personal information and run. Any Internet-based business should be thoroughly researched through a business-grading Web site like the Better Business Bureau, prior to paying any startup costs or providing any personal information.Online and direct marketing businessesUnder this business model, the sales or marketing representative might also be participating in face-to-face marketing. MacRae is also a manufacturer’s representative for Miche bags. She can either sell the product directly to the customer, or send the customer to a company-sponsored Web site. Companies like Miche often use parties or product-centered events to entice consumers. MacRae said the Miche company has built a business out of tried-and-true methods, so there isn’t much guesswork when it comes to how she markets the product. It’s an advantage when the parent company maintains the Web site.Multi-level marketing businessThis type of business is similar to an online and direct marketing business, as it requires the same methods of marketing. The business has already been built, and the rep earns an income through an established model set up by the parent company. With an MLM, the rep earns money recruiting other sales reps. Reps make commissions from the sales of the reps they recruit, and the reps they recruited do the same – and down the line. MLMs have had to defend their reputation. They’ve been compared to a pyramid scheme (compensation for recruitment rather than product sales), which is illegal in the United States. That aside, MLMs are the most popular form of a home-based business and can offer a large earning potential through the combination of sales and recruiting.For Joan Barak, a Mary Kay consultant based in Falcon, this type of business was the perfect alternative for her. Barak had an in-home interior design business, but when she moved to Falcon from Oregon in 2007, she wasn’t able to continue her business. She found Mary Kay a year and a half ago and realized that this company was exactly what she needed. Barak has always worked from home and loved the idea that all the marketing and initial startup work had been done for her. “Having the Internet is very helpful. It allows me to go to a Web site that Mary Kay has put together, so that I can access information as well as do my ordering online,” she said. “I wouldn’t have it any other way. Also, Mary Kay has done all the marketing work for me. The only thing I need to do is get my name out there and get to know people.”Startup costs are often fairly minimal, and the parent company provides ongoing support through Web site maintenance and ongoing training. Ground-level startup businessesGround-level startup businesses are the home-based version of a traditional storefront business. The owner initiates and builds the company. Andrea Johnson, owner of Falcon’s Balloon-Me, started her event-decorating business from square one. She paid roughly $5,000 for the necessary equipment and is currently developing ways to promote and market her business. Because she works on site at the events, she said it’s not feasible to have a storefront. “It’s a huge financial discount compared to a storefront, and I can create the decorations in my own space,” Johnson said. “And I can control the environment.” She is also saving money on child care, since she is a stay-at-home mom.Smith Mechanical Inc. is a similar startup company in Falcon. Owner Shannon Smith decided to build his business from home, more specifically from his mobile repair unit (his truck). He was laid off from a company in Denver, and going this route he didn’t need a storefront. He, too, does all of his work – heating, cooling and refrigeration – on site. Smith also wanted to keep overhead costs low. “Lots of people are probably forced to start out of their home to get some cash flow and interest,” Smith said.Domenic and Heather Zambrano started their business, The Original Basket Boutique, from home, but they bought a franchise. They paid for a name and concept, and marketing plans and logos came with the business. They built gift baskets in their basement and networked in the community. They were drawn to the idea of a home business when Heather Zambrano was laid off while pregnant with her third child.”We had a heart to heart about whether this was in the best interest of our family,” she said. Zambrano had a choice, too. She had a job offer in Denver but decided to go with the home business. With flexibility, she can stay at home with her kids and spend time with the family. “With the franchise, we were able to hit the ground running,” Domenic Zambrano said. “We don’t have to re-create anything, but we still have the freedom to run it our way.”
