At one point of another, most of us would have wanted to start of a home based business. We dream of leaving the working life, the blue Mondays and start a business where we can operate from home. We read up all the books there are about successful home based business, spent endless hours during searches for home based business….. and yet, we never make the move. One year is stretched to five, then the next thing we know, it had been 2 decades.
If after doing research, we do not take any action, what’s the point?
Today, I want to share with you on 2 home based business operated by people that I personally known. They have been doing it for years and nope, no Harvard degree, and not even college degree. No reading up books and no procastinating- they want it, they go for it!
How they succeed after so many years? Simple: SERVICE + COST
Case Study 1: Laundry and dry cleaning business
I know of a family who operate a laundry and dry cleaning business from their home. Initially, they operated from a back portion of a stationery shop- they just rented a small spot at the stationery shop to operate their business. Then, their business did well and the shop owner got greedy and kept increasing the rent.
It’s just a small miserable spot that faces the shoplot backlanes (nobody goes there except illegally parked cars and maybe the garbage truck) and they want to charge about RM4000 for it! So absurb. The best part is that, the shopowner is his wife’s sister- and yet, when the shopowner saw that the family was doing well with the business, she kept increasing the rent- talk about family bonds.
Still, it’s a wonder how he can ever make a living from the business since the place is so hidden and obscure that you will never find it unless you go right at the back of the stationery shop.
So, finally, the owner, decided to operate from his home. The owner is a very friendly, humble, helpful, down to earth guy from Ipoh. He paid a transport company to shift all the large washing machines and equipments to his house. He also did renovation- because the house was very small, so he had to make some adjustments- and also to put up some clear roof awning- so that the sunlight can get through the dry the clothes but the rain will not. He did not need to read books to figure it out- he used plain common sense.
While the renovation went on- took about a month or so, he set up his home and did the shifting and also notify all his existing customers of the change in venue. And his home is not an easy place to find if you are not familiar with the neigbourhood. But yet, his loyal customers followed him- and attempted to track him down to his home. If you go there, you will see cars passing by and sometimes overshot the place before finally figuring out where is it.
He is a very good and honest businessman and he does not charge a lot for his laundry service- I know because our huge door curtains is washed by him. Because he had known my family many years, he only charged us a nominal price. He even waived the charges when my mom made 2 skirts and needed him to iron press the pleats. After that simple act, my mom will always include his family in her distribution list whenever she made mooncakes, cookies, etc.
It is not only with us, I have seen how he treat his other customers as well. When he had time, he loves to tend to his small mini garden- and once, a customer loved a plant so much, he gave it to the customer. So, he had streams of regular customers- to my knowledge, he never spend any money on advertising. It is just word of mouth.
This is because if he was to spend money of advertising, there will be so much customers that he will not be able to cope. As it is now, they sometimes work till past midnight when there are a lot of orders.
Still, I must admit that economic downtime had hit many people – and some may resort to washing their own clothes rather than sending to laundry to save money. This is envitably suffered by most business. But since he is operating from home, the cost is very much lower- no rentals, no time and money wasted on daily commute. For him, there is probably only a slight reduction in the number of customers- nevertheless, if you pass the house, you will always see lots of either clothes, cushion covers, bed sheets, etc hanging to the brim from the transparent roof awning.
And yes, what makes customers happy is that they can drop off their laundry at any time- you will find customers stopping on a time that is convenient to them- sometimes Friday nights and weekends. Most laundry shops would have been closed.
Of course, he does not have that kind of ambition to grow his business into an empire or something. He just wanted to make an honest living- and now, his son is taking over his business and helping him out. It is a good way for the family to stay together- and the entire family are good natured folks.
Still, my writing will not be complete if I don’t mention the downside: no retirement benefits, no medical coverage, your home will always be your office (so it’s hard to separate the two), and you will need to work even though you are sick or not well. But that’s the common reality with any business. As such, business owners will have to buy insurance and invest part of their earnings in long term yielding funds (unit trust, mutual funds, bonds). So that they need not work for the rest of their lives.
Case Study 2- Home based hair salon
This business is started by a housewife to supplement her income. She had no formal education in cutting, perming or styling hair, but she had the passion and interest about the topic. So she read a lot and observed people. When her kids go to school and her husband goes to work, she started to offer the service of cutting hair, then moved on to perming, colouring and setting hair.
As time goes on, her skills become better and better. She also establish a loyal client base- who normally call her and book via the phone. Again, she does not have all the eloborate stuff like name cards or websites- she just operate from a small space (between the hall and dining room). All she did was placed a mirror against the wall, a chair, some cloth, a hair steamer, some combs and clips nearby. Of course, she also bought some hair dyes and perming lotions.
Now, as you know, hairstyle is very important for a woman. If the perming looks awful and the hair cut look horrible, you will not get repeated customers. Not only did this lady charge very cheap- RM4 for haircut and less than RM20 for a perm, the finished look does not look ameteurish. That’s why, her appointment is normally full- especially during year end & Chinese New Year when there are lots of social functions such as weddings to attend.
She loved working from home and again, like the example above, is not the ambitious kind who wants to expand it to an empire. It is a good way to supplement her income. So she agrees to the number of customers that she is comfortable in handling, because after all, her first priority is her family.
Still, the home based business provides a lot of additional income to the family- so much so that she could send both her kids to study overseas and travel all around about once or twice a year. She’s been to Europe, US’s disneyland and many parts of China. The business also kept her moving about- so she is relatively fit & healthy for her age. And she never had to leave home.
She has been in the business for more than 20 years now. If you think that how much one can earn from charging RM4 for haircut, you must also realise that she is very smart when it comes to scheduling her clients. You see, when you go for a perm or colouring, you have to wait for about half hour to one hour after applying the chemicals before you can wash the hair. So while the client is waiting, another client will arrive for haircut. So you do the math. Bear in mind without workers and rental costs, she takes the net amount.
Another attribute of her that kept customers going back- she is very friendly, honest and chatty customer. She also had the knack of remembering past information of her customers. For instance, I went to have my hair cut recently- and she was able to recall that I used to have curly hair (yes, I permed it a long time ago) and that my hair is still very thick like last time. She could also recall lots of past years information about my mom, who is one of her loyal customers.
Even though I seldom go to have my hair cut from her because she does not provide scalp treatment and rebonding- which are the 2 main reasons I visit hair salons for. I normally have my hair cut when I am going for scalp treatment and straigtening my hair- that’s probably less than 5 times a year. But I have seen her work with my mom’s hair and felt that she provides better quality than most of the salons out there. There are a few salons that I’ve been to, including one in Megamall that offers designer haircuts- gosh, there were such a disaster. After the cut, I had to use tonnes of gel and use a hair dryer each morning before I go to work- else, it will be disaster hair days! And I am the kind who never like to spend time on the hair- I really regreted cutting my hair there. So, in the end, found a humble salon, whose the owner is very upright about styles that suits my face and I know will never get me to cut a certain style that I will regret.
Finding the needs of the market and meeting that need
Many people carry the mindset that ‘the more I pay for a service, the better it will be’. If you really analyse the price you pay for the services, it may not be that great after all. And if you look hard enough, you will find great substitutes- more people are realising that now.
Especially given that economic times are so bad- people have to resort to cheaper alternatives. Many households are systematically learning to do away with expenses that they do not need. So if you are able to create a product and service whereby you can offer quality at lower cost, you will get yourself good customers. The key is to dig deep into your interest- and figure out within it how to create product and service that people will be willing to pay for.