Definition of Part-Time Self-Employment

1. Definition of Part-Time Self-Employment Part-time self-employment working for yourself for less than 35 hours a week < 35 hrs/wk Full-time self-employment 35 or more hours per week > 35 hrs/wk 5-1 Part-time self employment is how more entrepreneurs start. PT allows entrepreneurs the stability of working a �normal� job while giving them the freedom to explore something new without a lot of risk. PT allows the entrepreneur to test his idea, service, or product. At some point, as the entrepreneurial business grows, the entrepreneur will have to make a choice between his business and working for someone else.Part-time self employment is how more entrepreneurs start. PT allows entrepreneurs the stability of working a �normal� job while giving them the freedom to explore something new without a lot of risk. PT allows the entrepreneur to test his idea, service, or product. At some point, as the entrepreneurial business grows, the entrepreneur will have to make a choice between his business and working for someone else.

2. Why Part-time Businesses Are Important Part-time self-employment is a major portion of all current entrepreneurial companies in the United States More than half of the 27.2 million businesses are part-time businesses. 6 million sellers online Volatility frequency of business starts and stops 5-2 Of all small businesses PT are about half. Remember, this includes lawn mowing, baby sitting, and other seasonal activities. These part time companies are more likely to be more volatile because their owners are not depending solely on them for income. The full-time job is providing the needed income, or it is part time and just adding a little extra money when needed. Over 6 million people sell on online sites such as eBay or Yahoo auctions. This is normally done part time as a hobby or a supplement to their normal lifestyle.Of all small businesses PT are about half. Remember, this includes lawn mowing, baby sitting, and other seasonal activities. These part time companies are more likely to be more volatile because their owners are not depending solely on them for income. The full-time job is providing the needed income, or it is part time and just adding a little extra money when needed. Over 6 million people sell on online sites such as eBay or Yahoo auctions. This is normally done part time as a hobby or a supplement to their normal lifestyle.

3. When to Consider Part-TimeEntrepreneurship 5-3 PT entrepreneurship is a great way to gain experience in your industry or in running a business before you are willing to �give up your day job�. If you lack resources to start a retail company or full time business it is sometimes appropriate to start on a smaller scale and work your way up to a full scale company. For example, selling antiques online in your spare time does not require the capital resources that opening up an antiques store would. Sometimes you are faced with a narrow window of opportunity. It might be due to seasonality or pending expiration of an offer. Thus you may have to grasp the offer and run with it part time because you simply don�t have the time to set up the framework, make a business plan, etc� PT entrepreneurship is a great way to gain experience in your industry or in running a business before you are willing to �give up your day job�. If you lack resources to start a retail company or full time business it is sometimes appropriate to start on a smaller scale and work your way up to a full scale company. For example, selling antiques online in your spare time does not require the capital resources that opening up an antiques store would. Sometimes you are faced with a narrow window of opportunity. It might be due to seasonality or pending expiration of an offer. Thus you may have to grasp the offer and run with it part time because you simply don�t have the time to set up the framework, make a business plan, etc�

4. Key Considerations for Success inPart-Time Entrepreneurship Cost to start-up The amount of money it takes to start a new business. Time to start-up How long it takes to start a new business. Permanence The impression of long-term continuity a business gives others. 5-4

5. Home-Based Services Services delivered only at customer sites Cleaning services, lawn care, chimney sweep Services provided through the internet Programming, entering data, processing bills Services that can be done very quietly Writing, editing and proofreading documents 5-5

6. Home-Based Manufacturing Sewing Knitting sweaters, making afghans Sewing teddy bears, cuddly toys Making food items Preserves, pies, candy Manufacturing oddities Bird houses, decorative windmills, pet rocks Painting pictures 5-6

7. Home-Based Retailing Internet Businesses Sell goods thru the internet, deliver via UPS Your own website, E-bay, E-commerce, etc. Home Parties and Door-to-Door Sales You go to customer� keep records at home Avon, Mary Kay, Tupperware, Amway Retail Stands Carts and Kiosks in shopping malls Set up temporary stands at flea markets and shows 5-7

8. Home-based Businesses There were about 14.4 million home-based businesses in the United States in 2007, which represented 52 percent of all firms. Home-based businesses meet at least two of the three criteria for start-up. It is inexpensive, since you are already living somewhere You can get your business going where you live in a moment. But, how can we create a sense of permanence and legitimacy? 5-8

9. Building Legitimacy & Trust People-based legitimacy indicators there are people in the firm who customers know and respect Product-based legitimacy indicators Indicators that you won�t be disappointed by the product or service Organization-based legitimacy indicators Signs that this is an established, reliable firm How will you earn customer confidence & trust? 5-9

10. Name Your Firm and Get Required Legal Permits Is your preferred name available in your state/county? What about domain name? For Michigan LARA� http://www.dleg.state.mi.us/bcs_corp/sr_corp.asp Are there any permits or licenses needed to operate your business? Federal? http://www.sba.gov/content/search-business-licenses-and-permits State? http://www.michigan.gov/statelicensesearch Local? 5-10

11. Home-based Business Constraints Zoning laws Government specifications for acceptable use of land and buildings in particular areas. Covenants The limitations imposed on your property by your neighborhood group or deed. Variances Permission from a government organization to act differently that the laws state. 5-11

12. Issues Important to Running a Home-based Business Choose a work location in your home that is away from noise, distractions, and family. Be realistic about the amount of space you�ll need for your equipment. You�ll need an office door to keep business separate from family and the rest of life. Try your location out for a day or two to check out noise, traffic patterns, lighting needs, and distractions. 5-12

13. Issues Important to Running a Home-based Business Don�t overload on hours of work, or on snacks from the refrigerator down the hall. Setup your work day to minimize distractions from household or family chores Consider hiring help to handle household or family chores to free up your time. Set the ground rules early and stick with them. �No, I can�t mow the grass or babysit.� 5-13

14. Equipment for a Home-based Business Comfortable, usable desk and chair and adequate lighting Telephone High-capacity Internet service Business e-mail account High-speed desktop computer Fax machine Copier Appropriate software 5-14

15. 14 Questions to Ask About Your Home-Based Business Can you tolerate clients walking through your home to get to your office? Will you need a separate entrance to your office for clients? Do you need a desk top computer, or will a notebook/laptop be ok? Will you be adding more equipment in the near future? Are you producing/assembling a product, or doing mostly deskwork? How do you feel about working in the basement without natural light? Do you need space to sort, store, or ship materials? Do you need space to hold meetings? Will you need more space soon? Can you configure your workspace for either left or right-handed work? How much and what kind of noise can you tolerate while working? Can you keep your work life completely separate from the rest of your life? Can you keep your family out of/away from your office space? Is your work something in which your family can participate? Does your town/city have special zoning requirements for home businesses? 5-15

16. The Value of Internet Web Sites The Internet�s power comes from being a very cost-effective and efficient way to contact potential customers. Most small businesses should have a Web site regardless of whether or not they use it for actually transacting sales. Potential customers will use it to learn about your company�s products/services, and to decide whether they want to actually contact you. 5-16

17. 2 Kinds of Internet Web Sites E-commerce web site (for transactions) Using the Internet to conduct business. B2C � business to consumer transactions B2B � business to business transactions Informational web site (for info only) An Internet site which introduces and displays a business and its products/services. 5-17

18. E-Commerce as Percent of Total Value: 2002�2007 5-18

19. Internet Informational Web Sites Blog A Web page in which entries are posted in reverse chronological order (i.e., the most recent at the top of the page) RSS feed (a �burst�) An Internet messaging service that pushes (sends) whatever Web material you specify to all subscribers to that feed. 5-19

20. Internet Informational Web Sites Multichannel marketing The use of several different channels to reach your customers, for example, a Web site, direct mail, and traditional retailing. Reciprocal links A listed, live connection to a different Web site, which in turn displays a similar link to the first Web site. 5-20

21. Internet Informational Web Sites Search engine optimization A general approach to Web site design intended to result in the site being displayed toward the beginning of a search engine�s (e.g., Google, Yahoo!, etc.) listing for that term. Sponsored link A form of paid advertising that gets your company�s Web site at the top of a search list. 5-21

22. Search Engine RankingsApril 2009 5-22

23. E-Commerce and eBay Web Sites eBay reports over 4 million sellers in the United States alone 7 out of 8 sellers work on eBay only part time For part-time entrepreneurs the online approach is highly attractive advantages of a large market 24/7 availability of your products a quick start-up which is potentially inexpensive 5-23

24. E-Commerce and eBay Web Sites Payment Most online transactions use a credit card or an online payment system like PayPal. Chargebacks This is a fee the service levels on you for any of a variety of problems related to the sale Reverse auction An auction where the low bid wins (gets the business) Reserve price A minimum acceptable selling price in an auction 5-24

25. HOME RETAILING Parties and Door-to-Door Sales made at customer homes Avon, Mary Kay, Tupperware Network marketing An approach to selling in which the salesperson recruits customers to become distributors of the product or service to others. Amway Avoid the appearance of a pyramid scheme 5-25 The Tupperware party has grown up. There are many women who are now engaging in home retail as a way to add to the family income but keep the flexibility needed to be home for the kids and run them to soccer practice. Gone is the stodgy old Tupperware party. In it�s place is Pamper Chef kitchenware complete with cooked samples and points towards free goods if you also sign up to host your own party. Lingerie is also a popular home party sweeping through homes and college campuses alike. To be successful requires a good host who knows how to sell and who is just pushy enough to get the sale without offending. Many times customers will get hooked on the brand at the party and continue to by through a catalog. The Tupperware party has grown up. There are many women who are now engaging in home retail as a way to add to the family income but keep the flexibility needed to be home for the kids and run them to soccer practice. Gone is the stodgy old Tupperware party. In it�s place is Pamper Chef kitchenware complete with cooked samples and points towards free goods if you also sign up to host your own party. Lingerie is also a popular home party sweeping through homes and college campuses alike. To be successful requires a good host who knows how to sell and who is just pushy enough to get the sale without offending. Many times customers will get hooked on the brand at the party and continue to by through a catalog.

26. Home Retailing Success Factors Hosts with good contacts Good matches of products to the community Ability to close the sale on-the-spot 5-26 The Tupperware party has grown up. There are many women who are now engaging in home retail as a way to add to the family income but keep the flexibility needed to be home for the kids and run them to soccer practice. Gone is the stodgy old Tupperware party. In it�s place is Pamper Chef kitchenware complete with cooked samples and points towards free goods if you also sign up to host your own party. Lingerie is also a popular home party sweeping through homes and college campuses alike. To be successful requires a good host who knows how to sell and who is just pushy enough to get the sale without offending. Many times customers will get hooked on the brand at the party and continue to by through a catalog. The Tupperware party has grown up. There are many women who are now engaging in home retail as a way to add to the family income but keep the flexibility needed to be home for the kids and run them to soccer practice. Gone is the stodgy old Tupperware party. In it�s place is Pamper Chef kitchenware complete with cooked samples and points towards free goods if you also sign up to host your own party. Lingerie is also a popular home party sweeping through homes and college campuses alike. To be successful requires a good host who knows how to sell and who is just pushy enough to get the sale without offending. Many times customers will get hooked on the brand at the party and continue to by through a catalog.

27. Parties & Door-to-Door Retailing Advantages ease of setup low cost of start-up ability to work away from home and employer Disadvantages working on the road lack of a base to organize and work variable income finding ways for customers to reach you 5-27 The Tupperware party has grown up. There are many women who are now engaging in home retail as a way to add to the family income but keep the flexibility needed to be home for the kids and run them to soccer practice. Gone is the stodgy old Tupperware party. In it�s place is Pamper Chef kitchenware complete with cooked samples and points towards free goods if you also sign up to host your own party. Lingerie is also a popular home party sweeping through homes and college campuses alike. To be successful requires a good host who knows how to sell and who is just pushy enough to get the sale without offending. Many times customers will get hooked on the brand at the party and continue to by through a catalog. The Tupperware party has grown up. There are many women who are now engaging in home retail as a way to add to the family income but keep the flexibility needed to be home for the kids and run them to soccer practice. Gone is the stodgy old Tupperware party. In it�s place is Pamper Chef kitchenware complete with cooked samples and points towards free goods if you also sign up to host your own party. Lingerie is also a popular home party sweeping through homes and college campuses alike. To be successful requires a good host who knows how to sell and who is just pushy enough to get the sale without offending. Many times customers will get hooked on the brand at the party and continue to by through a catalog.

28. RETAIL STANDS One of the most ancient forms of business Carts/tables (portable/temporary) Kiosks (permanent) Success Factors location inventory selection 5-28 Stands are seen in a variety of places: Mall kiosks Flea markets Trade shows Street corners of New York To be successful they need plenty of walk-by traffic and a product aimed at the general population who is walking by. Currently many malls have kiosks in the major walkways for cell phones and accessories, cheap jewelry or watches, sunglasses, and even mini-massages. Stands are seen in a variety of places: Mall kiosks Flea markets Trade shows Street corners of New York To be successful they need plenty of walk-by traffic and a product aimed at the general population who is walking by. Currently many malls have kiosks in the major walkways for cell phones and accessories, cheap jewelry or watches, sunglasses, and even mini-massages.

29. RETAIL STANDS Advantages little investment variety of locations quickly established easily ended Disadvantages variable income legal requirements 5-29

30. Other Ideas for the Part-Time Business Virtual Offices Conducting business without a formal business organization Mobile Office Conducting business from your car/cell Incubators An office space in a special SBA-friendly space� properly zoned, low rent, with services 5-30

31. Success Factors for Part-time Business Boundary Management separating and balancing business and home Time management Use a to-do list Prioritize Keep it in its own space (home based) 5-31 Part time businesses by definition should require less than 35 hours per week. But since many PT entrepreneurs already have full time jobs, this means it is easy to spend too much time working. Time management and prioritization will help you keep on track and allow you to be very efficient. If your business is home based it raises two concerns: It is too easy to always pop into your office and ignore the rest of your life and family It is easy to get distracted from work by running downstairs to do a load of laundry or walk out and check the mail.Part time businesses by definition should require less than 35 hours per week. But since many PT entrepreneurs already have full time jobs, this means it is easy to spend too much time working. Time management and prioritization will help you keep on track and allow you to be very efficient. If your business is home based it raises two concerns: It is too easy to always pop into your office and ignore the rest of your life and family It is easy to get distracted from work by running downstairs to do a load of laundry or walk out and check the mail.

32. Making Do When You Are Starting Out Bootstrapping using low-cost or free techniques to minimize your cost of doing business Undercapitalization not having enough money available to the business to cover shortfalls in sales or profits 5-32

33. Ethics and Part-time Small Business Moonlighting working on your own part-time after your regular job Conflict of interest Cannibalizing sales Poisoning the well Aggrandizing making your business or yourself seem more accomplished than it is 5-33 If a part-time entrepreneur is also gainfully employed� Is there a conflict of interest? For a landscaper do does jobs on the side the answer would be yes. For a teacher who also sells antiques on ebay the answer would be no because it is not in any way harming the company who employs her. Aggrandizing is harmful not only because you are telling little white lies, but people may depend on you because of your claims and you may not, in reality, be able to meet their needs.If a part-time entrepreneur is also gainfully employed� Is there a conflict of interest? For a landscaper do does jobs on the side the answer would be yes. For a teacher who also sells antiques on ebay the answer would be no because it is not in any way harming the company who employs her. Aggrandizing is harmful not only because you are telling little white lies, but people may depend on you because of your claims and you may not, in reality, be able to meet their needs.

34. Moving from Part-time to Full-time Key question is usually financial Wait until there is a solid income Make use of any transition services offered by the former employer Recognize that initially, you will spend all your time running and marketing the business 5-34 The question of quitting your job to become a full time entrepreneur is often a difficult and financial one. Can you make enough as an entrepreneur to continue to support your current lifestyle? If your soon-to-be former employer offers any help in resume building, classes, or any other transition services go ahead and make use of them. More knowledge is always a good thing and you never know what you may learn that may help you as an employer in the future. The question of quitting your job to become a full time entrepreneur is often a difficult and financial one. Can you make enough as an entrepreneur to continue to support your current lifestyle? If your soon-to-be former employer offers any help in resume building, classes, or any other transition services go ahead and make use of them. More knowledge is always a good thing and you never know what you may learn that may help you as an employer in the future.