Massive economic, business and societal changes have drastically altered Canadians' work style with 2 to 2.5-million Canadians now operating businesses full or part-time from their homes.
“Those numbers will only continue to increase, because job security doesn’t exist in the 1990s,” says Douglas Gray, a Vancouver, B.C. lawyer and author of Home Inc.: The Canadian Home-Based Business Guide and The Complete Canadian Small Business Guide. “Employees at every level
An advertising supplement to the April 11, 1994 issue of Maclean's magazine
Written and researched
from entry-level workers through middle management to senior executives have been affected.”
Blue-chip and Fortune 500 companies and even government agencies are lean and mean in the 1990s. Everyone is downsizing and trying to find ways of doing more with fewer employees. The job search is tougher than it has ever been and once you have the job, there’s no guarantee you will keep it. As a result, Canadians are setting up their own businesses, so that they decide their own futures. ►
Business at Home
PROFILE CAERAN, Brantford, Ont.
Aside from the economic and business realities that have affected home work, Canadians are re-evaluating their lives and their priorities. A number of us are deciding that the three-hour daily commute and the 10-hour work day no longer make sense. We want to spend more time with our families and friends as well as fit more leisure activities into our frantic schedules.
Do home-based workers fit a particular profile? No, in fact, they don’t. Men and women of all ages operate a stunning variety of businesses from home. Of course, there are the more traditional home-based businesses, based on crafts, trades and services, but there are consultants and manufacturing operations that produce goods in the home or off-site.
As Canadians rebel against what they believe is excessive taxation, the financial advantages of homebased business become particularly appealing. A portion of your rent or mortgage, utilities, insurance, car payments, fuel, phone and other expenses become deductible, effectively reducing the net income on which you pay income tax.
“It’s not what you make, but what you keep that’s important,” says Gray. “Generally, it’s possible to legitimately deduct up to $10,000 or more of home-related expenses, depending on your circumstances. In many cases, the bulk of those expenses would be incurred whether or not you had a small business. To ensure you are maximizing your allowable deductions, speak to a professional accountant.”
As a business incubator, the home is a low-cost method of testing the business concept. Gray estimates one of three home-based businesses metamorphoses out of the home. It’s also a good way of discovering
The laundry detergent used to wash his clothes made Christian De Cloet's skin so itchy, he was constantly shedding his clothing.
When mother Sharon learned that non-irritating, environmentally responsible products weren't being made, she decided to produce them herself.
"Particularly, when they were younger, I wanted to be the one who attended to their needs, not a babysitter," says De Cloet, whose kids know that if they need "Mom", she's there. "As they get older, it's good for them to see their parents at work. It helps them understand what's putting food on the table and develops a work ethic."
Because it was cheaper than a bank loan, De Cloet refinanced the family home for $45,000 to fund CAERAN's manufacturing and packaging, which has since been paid off. In March 1989, CAERAN's (Caring and Environmentally Responsible and Nurturing) competitively priced home cleaning, hair, body and facial care products hit the market. She and an environmentally aware chemist used 100-plus alternative ingredients, that do the job normally done by phosphates, nitrates and ammonia. For example, banana oil replaces bleach in CAERAN's clothing stain remover.
Now offering 32 products, manufactured by three southern Ontario producers, CAERAN's direct sales force sold $382,000 to customers across Canada last year. De Cloet now has one full-time office worker and a parttime shipper/receiver as well as a part-time bookkeeper. To earn extra spending money, Christian, now 14, and Nicholas, 11, regularly work for CAERAN, wrapping soaps, labelling products and filling orders.
"It teaches them the value of money," says De Cloet.
"If they want extra things, they'll earn them."
All order taking and filling and marketing is done from her home office with the garage acting as a warehouse. Faxed orders are filled the same day.
To manage the finances, orders and control the cost of crucial marketing and promotional materials, De Cloet relies on two desktop personal computers and a laser printer. She produces catalogues, order forms and newsletters. For a more polished look, the annual customer newsletter is printed professionally, while the sales forces' newsletter is produced in-house.
Meeting customers face-to-face builds trust and credibility, so CAERAN and De Cloet regularly appear at consumer shows. "We want them to see our bottom line is loaded with ethics and a ton of environmental responsibility," says De Cloet. "We show them CAERAN is more than just a bottle of soap."
De Cloet makes the most of home-based work's inherent flexibility, beginning her work day at 5 a.m. At 7 a.m., she makes the boys a huge breakfast, then proceeds to use every spare minute. She can throw the supper in the oven, the clothes in the washing machine, then fill CAERAN order.
Although committed to CAERAN and home work, this recently divorced entrepreneur cautions others, "Spouses can be startled by the time and financial commitment a business demands and if you're successful, jealousy could be an issue."
whether self-employment or entrepreneurship suits you.
“Working from home makes it easier to close shop if you don’t like it or it doesn’t work out," says Gray.
Flexibility is one of home-based businesses’ great bonuses. If it suits you best, you can play all day and work all night, provided your commitments to clients allow it. If you have clients across Canada and worldwide, working from home makes it easier to connect despite the different time zones.
Working at home presents certain unique challenges. Afraid they will succumb to their homes, many distractions, potential home-based business operators may wonder whether they have the necessary self-discipline and motivation. But, if they’re autonomous in their current position, meeting deadlines and goals on their own, it’s likely they’ll continue to do so as home workers.
As employees are inspired by the weekly pay cheque, the thought of payment by clients motivates home-based operators. Putting a roof over their heads and food on the table motivates many entrepreneurs.
Like any business, a home-based business must be thoroughly researched and well-planned. It must be financially viable and able to support the lifestyle you have chosen for you and your family. Ask yourself if the business will meet your financial, professional and personal goals.
Virtually any business can be home-based provided it doesn’t run afoul of municipal by-laws concerning noise, pollution, congestion, residential zoning and the neighbors.
“Before you assume you can’t do something, find out,” says Gray. “Always seek alternative solutions -there’s another way of dealing with almost anything.”
Your future home-based business will probably involve skills and abilities you already use professionally or personally. Realistically assess your own strengths and weaknesses, then deal with them sensibly. If you really must handle the task personally and possess an aptitude for it, invest in the necessary training and education. But, in some instances, you will use your time most effectively by hiring someone to do it for you.
“Be as open to hiring expertise as you are when you need a tooth pulled or your car fixed," says Gray. "The astute entrepreneur knows when to hire someone who will do a better job, more quickly and efficiently.”
There are a variety of concerns regarding homebased business, but there are generally simple solutions. For example, to counter isolation, join associations, network with colleagues and visit clients to maintain contact with the outside world.
"Every supposed disadvantage to home-based business can be dealt with effectively,” says Gray. “You can make it work for you.”
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