Sunday, February 14, 1999
Fewer people taking home-based plunge
BY JOHN ECKBERG
The Cincinnati Enquirer
About a year ago, Angel Nugent had no doubt it was time to go into business for herself.
Her father had just died, and she had moved in with her mother in Madisonville. Together, they spent days looking at the past and wondering about the future.
I had quit my job and finally told her, "Mom, I can't keep sitting here and doing this day after day,' Ms. Nugent said.
Her mother realized it was true as well, and suggested her daughter create and build a business doing for others what Ms. Nugent knew best: how to run an office.
The resulting company, J&A Office Support Services, was created within months. As it enters 1999, Ms. Nugent projects the firm will have $150,000 in annual revenues for this first year.
J&A Office Support Services does just what the name says. Ms. Nugent and her mother write contracts, memorandums and procedures and soon intend to expand into event management.
J&A is one of a shrinking number of home-based businesses in the United States.
The strong economy has impinged small-business growth, according to a study by the National Federation of Independent Business, which represents 600,000 small businesses in the United States.
The federation found in a survey of business failures and start-ups in 1997 that 5 million Americans formed 3.6 million businesses in 1997 about 300,000 fewer businesses than were created the year before. An estimated 800,000 fewer businesses were created in 1996, compared with 1995.
There was a parallel decline in Cincinnati, according to the Dun & Bradstreet Corp.: from 860 starts in 1985 to 587 starts in 1995.
When she decided to open a business, Ms. Nugent first researched to determine what kind of business she wanted to start.
We found that there were very few small companies that were doing outsourced work: paperwork, word processing and data-management, she said.
Because she had a background in office management she quit a word-processing job at a personnel services company to live with her mother, Juanita, the J in J&A she knew she had to stick with what she knew.
Her biggest expense was furnishing her house with a computer and other office materials, a start-up cost of $11,000. For Ms. Nugent, finding new work for her firm will be the challenge for 1999. She has a regular regime of cold calls to make and religiously follows her schedule.
This time, however, trends are on her side. Dun & Bradstreet found in its 1997 annual survey of 1,500 small businesses that the concerns were increasingly turning to temporary help to handle the small-business workload. About 40 percent of wholesalers surveyed used temporary help in 1997, up from 19 percent only a year before.
One break and a client for the new firm came in December when Ms. Nugent sent a brochure to Truckers R Us, a 1998 Clermont County start-up, and followed up with a telephone call. She was hired on the spot and now manages routine paperwork for the company from her Madisonville house.
I don't know what I would do without her, said Tina Hutchison, 24, owner of Truckers R Us, an employment agency that finds truck drivers for companies. She is a big, big help. I can get out of the office and don't have to sit down and do all this paperwork. She does it for me. She types contracts, memos, brochures anything I ask her to do. She's like having a traveling secretary.
Educating clients is another challenge, she said.
People don't understand the concept. They don't have to pay benefits. They don't have to pay an hourly wage, she said. I estimate what a job will cost a company, and that cost ranges from job to job.
She reserves two days a week for cold calls and keeps to that schedule.
On Wednesdays and Thursdays, I have first-time calls to make. It's a follow-up to mailers, she said.
Will her company be around in another decade? A year? After all, only one in 10 businesses survives 20 years, the federation found.
Ms. Nugent has no doubts.
I like to think revenues for the second year will be $500,000, she said, and I think it will be there. It's all a matter of getting people to understand what this is all about.
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