America is probably the sole nation whose unemployment rate is historically matched by its entrepreneurial numbers. Over the last 18 months, as unemployment has spiked to 6.1 percent, New Jersey, like most states, has responded with a corresponding surge of new startups. Americans do not sit recessionally by and let others determine their economic fate.
As admirable as this sounds, entrepreneurs are not blind to the times. To survive, new enterprises must cautiously start small, with the resources at hand. To add a little guidance in these launchings, the Small Business Development Center, at the College of New Jersey offers “How to Start a Home-Based Business,” on Wednesday, November 5 at 7 p.m. at TCNJ’s Ewing campus. Cost $45. Call 609-771-2947 or visit email@example.com.
As a serial entrepreneur and longtime new business mentor, few are as qualified to advise startups as course instructor Martin Mosho. Born in Brooklyn, Mosho attended Brooklyn College, earning a bachelor’s in business administration. Upon graduation he launched into publication ad sales, working first for the New York Times, later the New York Post, then finally 15 years as sales director of U.S. News and World Report.
At that point, Mosho decided to take the entrepreneurial plunge. “I was a total innocent, and did so many things wrong,” he laughs. Choosing a field of which he knew scarcely anything, he started a dry cleaning store. The initial investment even back in the late 1970s was about $100,000 and he risked everything. As it turned out, Mosho’s business acumen carried the day and the store was very successful. Later Mosho founded the third largest personnel placement business in New Jersey.
Today Mosho tries to lead new entrepreneurs past his own mistakes and provide them with some insight. For the last eight years he has taught and individually mentored at TCNJ’s Small Business Development Center. His new book “Jump Start Your Own Business,” which he has used in his courses, will soon be available for public sale.
“Look through the entrepreneurs’ magazines. They are filled with ads asking readers to invest in business-launching programs that are for the most part phony,” says Mosho. “The real truth is, today you can launch your own business for very little money, totally on your own.”
It is a plan that Mosho’s students have been following very profitably for years now. His is a paper-only, home-based model allowing owners to sell with no inventory and minimal upfront fiscal risk.
What to peddle. Anything can be sold, but you may not be necessarily the right person to sell everything. Before deciding that an item is hot, and will fly off the shelves, make sure that you like the product and are very familiar with it. Clients will not buy what they do not understand, nor will investors back a vaguely presented product. And nothing helps sell trust like years of experience in the trade.
Check your resources already on hand. Can you and your car deliver passengers to the airport or goods business-to-business?
Then check out the competition. Instead of finding the number of businesses that sell a given item, Mosho suggests finding your niche where you yourself have had trouble. Years ago Mosho had a terrible time finding a garbage can with wheels. It was a good idea that nobody seemed to be carrying. His solution was to search out the manufacturer and present himself as a potential distributor.
Step up to rep. Once the budding entrepreneur has selected a product, or even a general category, it is time to haunt the trade shows. “If you present yourself to an exhibiting manufacturer as a sales or manufacturer’s representative, they will usually take you at your word,” says Mosho. Offering a straight business card to that effect will definitely indicate a serious intent.
The entrepreneur’s next words after the introduction can get a little tricky, Mosho admits. Basically, you are proposing to the manufacturer that you would like to sell their products directly online for the manufacturer. “Most manufacturers will say yes, because your selling on their behalf really isn’t costing them anything,” note Mosho.
The major exception may be a company with a lot of retail locations that doesn’t want to compete with its own stores. In such a case it helps to let the manufacturer know of the sales gap the entrepreneur’s own area.
Site planning. Once the manufacturer agrees the ideal arrangement is drop shipping. Without leaving home, the entrepreneur advertises the manufacturer’s goods on Craig’s List, eBay, or some similar sales listing — or he develops his own website. As orders come in our home business owner pockets his profit, sends the manufacturer its fee, and has them ship the product directly to the customer.
Mosho himself launched such a business selling, of all things, funeral urns. He had plotted the rising cost of funerals and popularity of cremation, and assessed it as a really live market, easy to advertise. “It turned out to be the perfect one-man business. No inventory, no risk. I never saw the product — the manufacturer did all the shipping. And we were both thrilled to have so many sales,” he says.
For those with a bit more energy and home space, most of the major online sales markets offer wholesale opportunities. Mosho once bought a pallet of Gap maternity jeans on eBay. By buying a postage meter and shipping materials, he had the post office pick up his packages with the regular mail delivery, and never had to leave the house.
While the drop-ship and small lot wholesale models have become quite common with the ease of online communication, Mosho cautions that it involves more thought and attention than it appears.
Where to spend. Don’t try this at home without a marketing budget, Mosho advises. If you have your own website, it is a wise investment to pay for keyword listings that will place your company higher on the search list.
Even if you are selling only on Craig’s List and eBay, customers must know you are out there. Mosho suggests hiring a professional writer to develop your product message and a someone who can place it in the right media. E-mail listings, both those free and those nominally purchased, typically offer a quick payback.
As times grow leaner, it will not be merely the stay-at-home moms and disabled folks who want to glean cash from a home-based business. Increasingly, people will be seeking to maintain a secure business with minimal startup investment and maximum sweat equity. Finding your own niche on the net may be the way to do just that. And to thumb your nose at the recession.