How to Expand a Home Business

Hiring employees allows you to focus on home business growth strategies.

People start home businesses to escape the corporate world or replace jobs when they are downsized. But many home entrepreneurs know little about expanding their businesses when they get to that stage. Some are forced to leave their home offices because of zoning laws. Local zoning laws typically restrict the customer traffic and inventory storage of home businesses, according to the Small Business Administration. You also might need more space. Whatever the case, you need to plan your growth strategy and start building your business for the future.

Things You'll Need

• Office or storefront
• Office equipment and supplies
• Business licensing agreement
• Franchise agreement

Instructions

1. Talk to other former home business owners who have expanded their businesses. Ask them what initial steps they took to get set up. Speak to people who have similar businesses, because their expansion methods will be more like your own.

2. Write an addendum to your original business plan, highlighting all the necessary steps you will take to expand your business. Budget the amount of additional advertising required and which media you will use, including Internet, print ads, radio and direct mail promotions. Account for any increases in labor and rent.

3. Look for an office or storefront for your business. Ask about tax breaks in the areas in which you look, because you want to keep your tax expenses relatively low. Look for offices where you can share rent with other business owners. Select a location that is central for most of your customers, especially if you generate lots of local business.

4. Hire one or two employees to handle busy work, including filing, mailing, data entry and answering phones. Hire sales reps if your business requires personal selling. Pay them on a commission basis, which will directly position their efforts toward increased revenue. Place an ad in the local newspaper. Call local employment agencies about job seekers with the necessary skills.

5. Align yourself with a similar type of business, according to "Entrepreneur" magazine. Choose a company that complements but does not directly compete with your business. Choose a complementary business to partner with so you can refer clients and customers to one another.

6. License your products or services to other dealers if you sell a unique product. Start by looking for companies that offer similar products. Hire an attorney who specializes in intellectual property law before setting up any meetings, according to "Entrepreneur." Work with the attorney in determining the down payment and royalty fee and drawing up the licensing agreement.

7. Expand your home business by franchising. Start by joining the International Franchise Association, according to "Entrepreneur." Learn how franchising works. Think about where you want to franchise -- either locally or regionally, for example. Hire an experienced franchise attorney to help you draft the franchise agreement, which will determine the amount you get paid from each franchisee.

References

• Small Business Administration: Zoning Laws for Home-Based Businesses
• "Entrepreneur"; How to Franchise Your Business; Mark Siebert; May 2010
• Bloomberg Businessweek; Home-Based Businesses Increasing; John Tozzi; January 2010
• "Entrepreneur"; 10 Ways to Grow Your Business; Karen E. Spaeder; May 2004

Resources

• The Franchise Maker: Step Into Franchising with the Franchise Maker
• International Franchise Association: Resource for Franchisers