IN THE THREE YEARS THAT FARLA BINDER has run her home-based entertaining coaching and consulting business, she’s tapped into the professional negotiating skills she learned during the 25 years that she operated Creations By Farla, a Los Angeles-based corporate-party-planning company. Her philosophy? She believes in her product and her ability to deliver value; for those reasons, she stands by her fee. If clients ask her to lower her fee, Binder gets creative so she doesn’t look like she’s caving in to those demands. For example, Binder will offer less consulting time for less money, or she’ll offer a menu of services. That way clients can feel more in control of the fee.
“I don’t compromise on my prices,” says Binder. “However, by giving them a menu, I am giving them choices. But I don’t allow clients to negotiate on the menu’s fees.”
Stand Your Ground
Binder remembers the first time she demanded a fixed fee for a party centerpiece. Though she feared the client would balk at her fee, Binder stood by the price. “I remember taking a deep breath and saying `just do it,’” she recalls. The client paid the fee without haggling.
“Don’t compromise on price,” Binder says. “When you start negotiating on your fee once, then you’re teaching your client to always negotiate with you.”
You can have the same fortitude that Binder brings to the negotiating table. First, develop your strength of character during negotiations, says Mimi Donaldson, a Beverly Hills-based negotiating expert and author of Negotiating for Dummies ($20, IDG Books). Home-based business owners who formerly worked at companies where business development specialists handled all the negotiations with clients now have to learn to negotiate for themselves if they hope to win deals and sustain their business, she says.
“If you want to be a master negotiator, you’re going to have to cross the lines into foreign territory and be flexible and adaptable,” Donaldson says. “If you have a hard time doing this, get over it or leave the game.”
The best way to win at client negotiations is to be fully prepared going in, Donaldson says. Take time to study the client’s Web site to learn about the company’s products, industry, and personnel, she says. Ask industry contacts if they know anything about the company or its key players. “Go in armed to the teeth with that information before you start negotiating,” she says.
To make sure you get the fee that you’re after and know you deserve, know exactly what you’d like to earn, adds Bob Laser, senior managing partner for The Negotiating Alliance (www.negotiatingskills.com), an Atlanta- and San Francisco-based negotiating consultancy. After taking time to tend to marketing and other non-billable back-office functions, the maximum number of billable days per year that an independent professional has left to give to a client is usually 100 days (as opposed to 200 for company employees who don’t have to multi-task), he says. That translates to 800 billable client hours each year. If you decide that you want to make $60,000 a year, your hourly rate will be $20, says Laser. “Knowing you need to maintain that fee per hour will help you to establish a firm foundation for negotiating your price,” he says.
Most of all, toot your own horn, Donaldson says. While you may be bidding against others to land a project, your talents and expertise can set you apart from competing companies. “The person who wins the project is the person who is best at selling themselves,” she adds.
Get What You Deserve
Follow these five tips at the negotiating table:
Exude self-confidence Believe that you’re a professional who brings value to your clients
Keep two figures in mind Establish your ideal asking price and the lowest fee you’ll accept so you can stand your ground if a client tries to low-bail your number during negotiations
Know the market rates You’ll establish yourself as a professional, you won’t price yourself out of a project, and you won’t ask a ridiculously low fee
Offer a menu of services Avoid haggling over fees and protect your price integrity without discounting
Evaluate potential Some jobs might open doors to more work and new contacts
A HOME-BASED BUSINESS OWNER, YOU HAVE A RISK-taking attitude that can culminate in great profits. Alas, this pioneering spirit can also tempt unwary home officers into the jaws of a wide variety of scams, schemes, and nefarious business deals spawned by modern-day Fagans. But if you’re forewarned, and exercise some caution and common sense, most of them can be avoided.
“The work-at-home, make-big-money, buy-large-cars, I-will-tell-you-how-to-make-it-rich-overnight multi-level-marketing offers are largely schemes, if not scams,” says Lindsey Krause, who worked in the corporate marketing department of a multilevel marketing company (MLM) for more than a year before she discovered its unsavory business tactics and quit. (Krause asked us not to reveal her real name for fear of reprisals.) She says hundreds of people left the company each month, disillusioned and broke, while a core group collected outrageous sums of money.
The bait comes in many forms–savings on office supplies, incredible sales, membership in exclusive trade organizations. And despite the dire warnings of attorneys general and consumer groups, people still fall prey to shady work-at-home business opportunities.
“When people were looking for a little extra cash or an at-home opportunity because of family or physical limits, they were preyed on relentlessly,” maintains Krause. “Single moms were their easiest targets.”
There are two main reasons why home-based business owners are particularly susceptible to scams, according to James Walsh, author of You Can’t Cheat an Honest Man: How Ponzi Schemes and Pyramid Frauds Work and Why They Are More Common Than Ever ($20; Silver Lake Publishing). One is logistical and the other is psychological.
Logistically, home-based businesses offer fewer layers of resistance between an outside promoter and the decision-maker. “Often, the decision-maker is the same person who picks up the phone,” Walsh says. “Even if you are just starting a one-person shop and feel as broke as can be, you’re still an ideal mark for a scammer because you’re easy to reach.”
The psychological reason is that some home-based business owners feel a kind of institutional insecurity, as if they need to pay attention to every business proposal that comes their way in order to compete. “If anything, the opposite is closer to the truth,” Walsh says. “A home-based business should be even pickier about the proposals they entertain.”
ARMED WITH INFORMATION
The first thing you must do to protect yourself from scammers is gather information. Too often, consumers work with companies on the assumption that they are legitimate. “More than scams and cons, it is a lack of awareness that causes fraud,” says David Horowitz, host of the weekly radio show Fight Back, a consumer advocacy program (www.fightback.com).
Horowitz says that before you do business with a company, you need to check them out completely. Call their 800 and local telephone numbers to make sure they work. If the company has a Web site, check it out to get more information about how they operate. You can also search Web-based and Usenet message boards for complaints about the company. Even if the company doesn’t have its own Web site, customers often post warnings about disreputable firms on other sites. Some good places to start include www.fightback.com, www.scambusters.com, and www.thepubliceye.com.
The next thing you should do is become acquainted with some of the more common scams. There are countless schemes afoot out there, but here are a few general types of which home workers should be particularly wary.
WHAT’S WRONG WITH THIS PICTURE?
The most lucrative (at least for the perpetrators) and potentially dangerous scam is the multilevel marketing scheme. These pyramid schemes will come to the home-based business dressed up as marketing opportunities or guaranteed networking systems.
“Sometimes they will suggest that you market their product–pre-paid phone cards, soap, coins–while getting your business off the ground,” Walsh says. “Other times, they will suggest that their system can generate sales and clients for your business.” In both cases, they’re out to get “start-up fees” or “management licenses” from you, as well as everyone you can recruit into the scheme.
Krause was involved in a vitamin venture that also sold weight-loss and beauty cream products. She says the company made a good deal of its money by selling high-priced products of inferior quality. “Most of the products are extremely overpriced compared to purchasing them on the Internet or in a superstore,” Krause says.
While the sign-up fees for most programs are minimal, MLMs often encourage new members to purchase large amounts of product. When you join, you are often required to have a three- or even six-month supply shipped–and charged to your credit card–each month.
In addition to paying for the products, these schemes usually require you to incur a great deal of overhead expense. Unlike an employee in a corporate setting, you have to pay for everything, including sales brochures, meeting spaces, photocopying, gas, phone service, conferences, training, and more. Before long, Krause says, your expenses can get wildly out of control. “That’s why you see the word `independent’ all the time,” says Krause. “It doesn’t mean freedom from work: it means you pay for everything on your own.”
If you are thinking about joining a MLM or franchise, you need to be extremely careful. To avoid falling victim to scams, you need to dig up lots of information about the business, its principals, and your risk.
Walsh says there are some fundamental things you must know before committing any money to a marketing channel or “business opportunity.”
QUESTIONS TO ASK
First, make sure you understand how the business makes money. What is the product or service being exchanged for value? Are you guaranteed to receive a quality product, or do you have to work with what you have?
You also need to know the people with whom you are working. Do you know all or most of your business partners, or are there producers, license-holders, or others that you haven’t met? At the very least, you need to know whether your new partners have had legal trouble in the past.
Third, where did this opportunity come from? Scammers don’t just wait for marks to come to them; they seek them out. Trust opportunities that you find and research yourself, and be wary of those that find you.
“Ask to meet principals and read prospectuses–including complete ownership information–before committing any money to a business opportunity,” advises Walsh. “Make sure you understand who’s involved and where they are located.”
OFFICE SUPPLY SCAMS
The second-most-common type of con is the effort to sell office supplies or equipment to a home-based business at a “discount.” The offer can come via e-mail or by phone, and it usually begins with the salesperson asking what kind of PC, printer, and fax machine you have. “Once they get you to tell them about your equipment, you are finished,” says Horowitz.
Once they know what you need, the scam artist will quote you prices that are far below those offered by the legitimate competition.
“People who have their offices at home are usually pretty frugal about what they buy,” Horowitz says. “But when prices are so low, some of these people–in their infinite wisdom–will buy six of everything.” In some cases, the products simply never arrive. In others, the goods arrive, but are of inferior quality and cannot be returned. “The reason they deliver is so they won’t be pursued by the federal authorities,” says Horowitz.
Other office supply schemes require a home-based business to pay a membership fee or participation fee in order to get amazingly low prices. “The business pays the fee, and the scammer disappears,” says Walsh.
In another variation, a shipment of office supplies that the home-based entrepreneur never ordered arrives–along with a bill. When the business owner calls to dispute the charge, they are threatened with an adverse credit report if they do not pay.
CASES IN POINT
The Federal Trade Commission (FTC) settled two high-profile cases of office supply fraud in late 2000.
According to the FTC, David, Moreno, doing business as Continental Business Systems (also known as United Products), based in Huntington Park, Calif., used deceptive tactics to get businesses to pay for the supplies he sent to them. He falsely represented that he was the businesses’ regular toner supplier and that they had ordered the toner he had shipped, and for which he had billed them. Under the terms of the settlement, Moreno must refrain from future telemarketing sales and turn over all of the company’s assets to the state.
In a similar case, the FTC found that International Business Network Inc., based in Tarzana, Calif., would call businesses on some phony pretext to obtain information about their victims’ photocopiers and the names of personnel responsible for ordering supplies for the copiers. They used this information to convey the impression that they regularly supplied toner for the victim’s copier. Once the victim paid one bill, additional shipments and bills were sent, reflecting outrageous prices.
The FTC settlement in this case banned the company principals, Danny Yahalom and Oren Ben Elkanah, from telemarketing sales and required them to pay $85,000 to the business owners they had ripped off.
WATCH THAT WARRANTY
Another similar scam revolves around sales of big-ticket items such as computers and copy machines. Horowitz says users should be particularly wary of computers that were assembled or rebuilt outside the United States. Even if the components are delivered as advertised, the warranty may be invalid and leave you hanging if you run into trouble. “Manufacturer warranties on these systems will not be honored because they were assembled in Europe,” says Horowitz.
In fact, the source of your warranty may be as important as who made the product. Federal law guarantees you the right to read the warranty before you buy a personal computer, according to Horowitz. “You want to make sure to get a factory warranty,” he says. “Dealer and third-party warranties are troublesome because they don’t always perform their own repairs.”
The Federal Trade Commission offers a number of tips for small businesses that want to avoid becoming victims of office supply scams. Clearly, you are not responsible for products that you did not order. In fact, the law allows you to treat them as a gift! When shipments arrive, you should inspect them immediately to ensure you receive the quantity and quality of items that you ordered. You should also check your bill for charges for items you did not order.
MASTER OF YOUR DOMAIN
One relatively new scam involves the selling of bogus domain names. Although many top-level domain names (TLDs) are taken, the Internet Corporation for Assigned Names and Numbers (ICANN) is in the process of authorizing new TLDs, such as .biz, .info, .pro, and others.
According to the FTC, consumers are receiving fax and e-mail solicitations to secure new top-level domain names–for a fee–as soon as they become available to the public. The promise may guarantee a new top-level extension or some kind of preferential treatment in the registration process; either way, the claims are bogus.
At press time, however, ICANN had not yet authorized the new extensions, and the FTC says it is misleading for any service or entrepreneur to offer pre-registration or accept fees for domain names that may never exist. It is also likely that ICANN will establish rules and regulation regarding the distribution of new TLDs when–and if–they become available.
The FTC advises consumers to protect themselves by avoiding any pre-registration service that asks for fees up-front or guarantees particular top-level domain names or preferential treatment in the assignment of new, top-level domain names. It also recommends that consumers look carefully at any offers that come in unsolicited. To check the current status of new TLDs, check out the ICANN Web site at www.icann.org.
It is also a good idea to protect yourself against the registration of domain names that may infringe on your trademarks or copyrights. Horowitz says he had this problem after he established fightback.com. “I found somebody had registered fightback.org and wanted to sell it for $999,” says Horowitz. “We went out and registered 20-something domain names so someone doesn’t rip off my trademarks.” Horowitz also recommends using a well-established registration service, such as Network Solutions (www.networksolutions.com).
WHEN PRECAUTIONS FAIL
Even if you’ve taken all conceivable precautions, there’s always the chance a particularly wily scammer will catch you napping. If you become a victim, there is nothing to be ashamed of–and reporting the incident quickly could help spare others.
The best thing to do if you think you’ve been taken by a scam is contact your state Attorney General’s office. “These are the law-enforcement agencies that usually keep the best tabs on con men and Ponzi swindlers,” says Walsh. The U.S. Justice Department also has an office that focuses on Ponzi schemes and business swindles.
But although the state attorneys general work hard to battle scams, don’t expect them to get your money back for you. Many law enforcement officials at the local level consider scams “victimless crimes,” and, therefore, low priorities. “In the D.A.’s office in Los Angeles County, you need to sustain at least a $100K loss before the office will take action,” says Horowitz. “Sometimes, if you pool resources with other victims, you can reach that level, but it can be hard.”
A cautionary note: Although many blame the Internet for the number of scams out there, most scams work just as well by phone as they do online, and use the same methods. In effect, however, the Internet allows scammers to reach a larger number of potential marks while incurring less expense. “Ponzi scammers have always used direct mail to find marks … the Internet is, among other things, a very efficient form of direct mail,” says Walsh. “The underlying mechanics of the schemes haven’t changed, and probably won’t.”
Horowitz agrees and adds that the best defense against scams is the same as always: common sense. Issuing a well-worn but nonetheless valid warning, he says, “If it looks like a scam, sounds like a scam, smells like a scam–it’s a scam.”
WORKING AT HOME IS THE PERFECT situation for Chris Williamson. Once a vice president of human resources for a $400 million company, she decided she needed to be at home with her three children more than she needed to be at the office. So, she started her own business, Creative Human Resource Solutions Ltd., which she runs from her 4-bedroom colonial home in Perrysburg, Ohio.
She set up her office next to the master bedroom, in what used to be the catch-all room over the garage. Its large window gives her a magnificent view over the trees toward the historical site of Fort Meigs, a War of 1812 battleground next to the Maumee River. But the one battle Chris confronted was one she didn’t expect: She couldn’t find suitable home office furnishings.
“I looked for months for office furniture,” says Williamson. “I could find armoires, but there was no drawer space. Or I could find metal filing cabinets to put a top on to make a desk, but it just didn’t feel like real furniture. And an executive desk didn’t really fit in the space the right way.”
One store dealer tried to convince her to buy children’s bedroom furniture, but the drawers weren’t the right size for files. “I’d go to furniture stores, and I’d tell them I needed filing cabinets, which I don’t think is an outrageous request,” Williamson remembers. “It was hard to find anything that wasn’t contemporary–a style I like–but it’s not in keeping with the rest of my decor.”
Finally, Williamson found an armoire she liked in a furniture store and logged on to the Hooker Furniture Web site (540-632-2133, www.hookerfurniture.com), where she discovered the entire collection of Faith Popcorn’s “La Cocoon” office furniture line that the futurist and author designed for the company. “I was so thrilled to find it because it was exactly right for the space,” says Williamson of the antique cherry credenza, hutch, lateral file, bookcase, and workstation desk she purchased through a dealer located on the company’s site.
With its “gentle French style,” as Williamson calls it, the furniture blends in beautifully with the rest of her traditional decor. “Before I found La Cocoon, my options included piecing together odds and ends to try to get what I needed for my home office,” she says. “I’m sure I would have ended up spending more money had I gone that route.”
No longer her junk room, the 16-foot-by-16-foot office suits her perfectly. “Before, I always had a large office with a large desk and a credenza and a conference table, so that’s the way I’m used to working,” she says. Now, with all the pieces of La Cocoon in place, she has plenty of space to spread out when she’s working–and plenty of places to stash things and close up shop when she’s done for the day.
Although her family respects her work space, they like to hang out there, too. “Sometimes, we’ll migrate to the office in the evening,” says Williamson. “My family will be in there when I’m working.” The room’s television, two welcoming and oversized chairs, and ottomans make them feel right at home even in the office.
The arrangement suits the family well, says Williamson, who for the past year has been working on such projects as employee-opinion and performance-feedback surveys and writing employee handbooks. “Ideally, my picture of this home business is to be an HR professional for small- to medium-sized companies who need someone for an executive search, or to help evaluate their benefit plans, or design policies, or whatever HR strategy issues they may need,” she says.
For now, though, Williamson is concentrating on taking on work that she can do during quieter times of the day, such as when her daughters Paige, 10, and Hannah, 6, are in school, and Meredith, 2, is napping. Because her current projects don’t require her to be accessible during the day, she can also work at night, after the kids are in bed, or on the weekend, when her husband can take them out of the house–and everything stays organized thanks to her perfect home office furniture.
ARE YOUR OFFICE-BOUND COWORKERS green with envy–or resentment–because you telework? Working at home may be your temporary reprieve from office politics, but it’s not always “business as usual” when you return to the main office. If your colleagues’ resentment festers, it can be the downfall of your telework program, but there are ways to help your office mates accept your work schedule.
The Bitter End
For Pam Waterman, a senior technical marketing writer for Bolt Beranek & Newman Inc., a computer software and hardware company located in Cambridge, Mass., she became aware of resentment over her teleworker status after the birth of her first child. Waterman and a fellow coworker–also a new mom and an engineer who worked in a different department–worked out an arrangement with their respective supervisors to work from home the same two days every week. On those days, they split childcare and work time. But soon after implementing the change, Waterman and her fellow teleworker felt the same chilly reception from their coworkers: Despite the 40- to 50-hour weeks each devoted to the company, they weren’t taken seriously. “We got the subtle sense that we were really only considered to be part-timers,” says Waterman. “We were made to feel like we were not pulling our weight.”
Bit by bit, Waterman felt squeezed out of the communications loop. First, conference meetings that she’d normally attend were scheduled on days she worked at home. “Then, a client would call or raise an issue, or a change would be made to the production schedule, and I’d find out accidentally after the fact,” says Waterman. After three months of slights, she threw in the towel and went back to the office full-time.
In all likelihood, that’s exactly what Waterman’s manager wanted, says Debra Dinnocenzo, author of 101 Tips for Telecommuters ($16, Berrett-Koehler Publishers). Because there was no formal written agreement, it’s possible her manager believed Waterman’s request to work at home was just temporary. The manager might have had one set of expectations and Waterman another, but there was no way of knowing without the clarity of a written agreement, says Dinnocenzo.
To keep peace on the staff, Dinnocenzo says it’s imperative to have a written agreement to spell out expectations on both sides. Before the employee teleworks, it’s important to hold a formal staff meeting led by the manager, with the teleworker’s key partners within the organization, to explain the arrangement. If the details of a teleworker’s agreement aren’t shared with the company, the schedule can foster hostility, says Dinnocenzo. “If you’re denied a formal written teleworker agreement, then communicate with coworkers one-on-one and explain your reasoning for telecommuting,” she adds. “Be clear with coworkers about what days you plan to work from home, how you can be reached, and what work you plan to do from your home office.”
Resentment about a teleworker’s schedule is not entirely unfounded, says David Fleming, who was chosen to direct California’s Telecommuting Pilot Program from 1992 to 1995 and organized the California Task Force on Interactive Telecommunications in Government. “In my workshops for soon-to-be teleworkers, I urge them to be sensitive to what could result in their colleagues having to put out all the fires in the office,” explains Fleming. “I encourage teleworkers to take on less attractive duties when they are in the office to give colleagues relief.”
Al Jacobus, a former telecommunications engineer for the State of California’s telecommunications division in Sacramento, worked at home two days a week during the pilot program. As soon as he started telecommuting, his colleagues began making snide comments about his schedule.
Instead of taking offense to his coworkers’ resentment, Jacobus started a monthly telecommuting forum where everyone could come and vent problems about the flexible schedules. “We’d meet once a month for one hour,” recalls Jacobus. “We’d pick a topic, send a flyer out to 250 people in the division, and we had a great response.” During meetings, anyone interested in telework could ask questions, and those affected by the program could report their complaints.
Ways to keep colleague envy out of your telework arrangement:
* Put your manager’s expectations in writing.
* Have your manager hold a staff meeting to formalize and explain your telework status to coworkers.
* Have a one-to-one meeting with coworkers explaining why you’re teleworking.
* Lend an extra hand to coworkers when you’re in the office.
People with visual, hearing, or other physical impairments are usually familiar with the assistive technology that helps them live, learn, and communicate with others. But not every home-based entrepreneur is aware that these technologies can help them communicate with the largest possible audience.
There are more than 30 million people with disabilities who can be affected by the design of computer software, according to Mike Paciello, founder and CTO of WebABLE, a Nashua, N.H.-based consulting firm that focuses on assistive technologies. In 1998, the President’s Committee on Employment of People with Disabilities reported that consumers with physical disabilities control more than $175 billion in discretionary income. “For SOHOs, that seems to be incentive enough to use these technologies,” says Paciello.
At the most fundamental level, your Web site can be specially coded to accommodate people with disabilities. Directions for doing this have been collected by the World Wide Web Consortium (W3C). The organization’s Web Accessibility Initiative can be found at www.w3.org/WAI. “The guidelines cover everything from how to create accessible Web sites, designing accessible authoring tools, education, outreach, usability, validation, and best practices,” Paciello says. A few tips:
Images & animations. Describe the function of each visual element and avoid unnecessary animations that complicate the site.
Image maps. Use text to interpret hotspots, allowing visually impaired visitors to navigate without assistance.
Multimedia. Provide captioning and transcripts of audio clips and vivid descriptions of video clips.
Hypertext links. Use text that makes sense when read out of context. For example, avoid “click here” in the middle of sentences when referring to links.
Page organization. Use headings, lists, and consistent layout and style wherever possible.
Graphs, charts, and tables. Summarize any visual element or use the Long-desc attribute to interpret visual details.
Scripts, applets, & plug-ins. Provide alternative content in case active features are inaccessible or unsupported. This helps all visitors enjoy the multimedia features on your site.
Frames. Use noframes and meaningful titles so visually impaired visitors can follow the organization of the site.
Check your work. Validate your site. Use the tools, checklists, and guidelines at W3C (www.w3.org/TR/WCAG).
New products hold even more promise for communicating with this audience. For example, with a $399 RIM 950 handheld and Blackberry software (519-888-7465, www.rim.net) hearing impaired users can receive wireless text messages wherever they go. Paciello advises that taking advantage of text messaging allows even small businesses to reach out to the hearing impaired. “I believe we’ll see advances in similar services that can be reproduced at the Web level that will greatly enhance communication processes between the deaf and hearing persons,” he says.
In addition, text-to-speech software and Braille keyboards keep visually impaired users connected. The 2.9-pound BrailleNote (starting at $3,400, HumanWare, 800-722-3393, www.humanware. com) is a portable console for the blind. The device comes with a keyboard, high-quality microphone, and speaker, and uses a Windows CE-based suite of applications including a word processing program, e-mail package, a PIM, and a phone directory with a relational database that can interface with mainstream computing products. “It’s a PDA for people that are blind,” says Judy Seiler, director of marketing at HumanWare. Just as the sky is the limit for users of these technologies, so is the market available for the products and services your business provides.