Editorial

Soaring Gas Prices Make Home-Based Businesses Very Attractive

With U.S. gas prices at well over three and a half dollars a gallon and a projection that they may reach over $4 by summer, the concern over that expensive daily commute is growing.

Here is an interesting solution -- become your own boss and run a business from home.

Walking 20 steps from your bedroom to home office in your pajamas can be a big improvement over negotiating 20 miles of potholes and gridlock in your gas-guzzling mini van. Concerned about not having a great idea for your own businesses? Perhaps a little anxious that you do not have the time and/or money it would take to make that business profitable? There is an alternative.

Home-based Franchise businesses are on the rise as many people appreciate the ease of starting a new venture from their home. These Franchise Opportunities come with an enormous amount of training and support from the franchise company. Home-based Franchises are generally services businesses, meaning you don’t need a storefront or other physical location to serve customers because you go to them.

According to Entrepreneur magazine, the top 10 home-based franchises for 2008 include six cleaning companies, two tool companies, a dance-based exercise studio, and a small business internet provider. These top 10 rankings are based on a number of factors such as a company’s financial strength and stability, growth rate and size of the system, number of years in business, startup costs, litigation and percentage of terminations.

There are hundreds of businesses available in the home-based category, from automotive to health care to financial services. Some of these can be home-based for the life of the business and in other cases, the business is run from home initially and, once your business matures to the point of needing outside employees, you can transition to a traditional office space.

Besides the advantage of missing that grueling twice-daily rush-hour commute, home-based franchises are usually less expensive to buy and own than other franchised businesses. For example, the average investment to own a Jan-Pro franchise, a company that provides commercial cleaning and is #3 on the Top 10 Home-based list, is under $50k. Compare this to the cost of buying and building out a mall-based Food franchise where your initial investment could run from $150k to $500k and higher.

While some home-based franchises, like Jan-Pro, require you to be the owner-operator, other companies may offer the opportunity of semi-absentee ownership, meaning you focus on growing the business and let your employees provide the service. One of these is Aussie Pet Mobile, a company that brings the dog wash (in a van) to the customer’s door. About half of their over 400 franchisees fall into this category, which allows them to own more than one territory and about 85% of Aussie’s franchisees do.

The cost advantages of a home-based business can be considerable. Take CertaPro Painters, a franchise that provides indoor and outdoor residential and commercial painting. According to Peter Barkman, Vice President of Franchise Development for CertaPro, many franchisees can and do operate from a home office. The company provides professional marketing tools and support by employing a call center that pre-qualifies the customers and sends the request on to the local franchisee, who meets with the customer and provides an estimate on the spot. When the job is sold, the franchisee can either have the painting done by employees or he can contract the work out to a subcontractor. Not only are the operating expenses for this business minimal but the profit margins can be very high.

Owning a home-based business is not for everyone. While working from home can save you time and expense, it does present different challenges. When the appeal of working in your pajamas fades, you may find that the isolation of a home office does not make you happy or productive. The most successful franchisees often mitigate the effect of isolation by joining a group of other home-based business owners with whom to share ideas and network. Being a self-starter is a must in order to work a full day when so many distractions – daily chores like working in the yard or walking the dog – are there to interrupt you. The majority of successful home-based franchise owners will tell you that the secret to their success is putting in a full day of work – and more.

The forecast for gas prices is that they will continue to rise through the summer and that means we will all need to find ways to save money where possible. If you are considering business ownership, you may want to check out the numerous home-based franchise businesses available. Their lower cost of entry does not mean lower profit potential. In fact, the right home-based opportunity could mean a higher income along with lower operating expenses and a healthy, happier you!

Lori Kiser-Block is President of FranChoice, a national network of franchise consultants that provide free guidance and advice to qualified individuals in the United States searching for franchise opportunities that match their personal interests and financial qualifications.