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Downsizing, Internet fuel trend of home businesses

By Davis Bushnell, Globe Correspondent, 11/6/2005

JOSH REYNOLDS FOR THE BOSTON GLOBE Scented soap and gelatin air fresheners made by home-based entrepreneur Marianne Morelli.

Jere Ward of Boston and Marianne Morelli of Malden typify the rising number of home-based business owners: Ward, 20, is beginning her career crafting pocketbooks at her dining room table, while Morelli, 51, is rebounding from a layoff by creating soaps and moisturizers in her kitchen.

Corporate downsizing, long commutes, the Internet, and the lower cost of working from home are among the factors spurring the creation of these enterprises, according to career counselors and employment specialists, who expect the trend to grow.

The number of home-based business owners nationwide varies greatly, depending on the source. The Census Bureau, for example, estimates that there are some 4.5 million people working from home, compared to 3.2 million in 1990. Rudy Lewis, the president of Maryland-based National Association of Home Based Businesses Inc., on the other hand, said that anecdotal evidence suggests there are about 23 million home-based ventures, versus 1 to 3 million in the mid-1980s.

''Computers and the Internet have changed the environment dramatically, prompting all kinds of businesses in the home,'' ranging from the creative to the corporate, said Paul Edwards, who with his wife Sarah is the author of ''Working From Home.''

Indeed, accounting, consulting, and other professional businesses continue to be ''the backbone'' of the home business sector, Lewis said.

While home-based business is on the upswing, the telecommuting phenomenon is apparently leveling off, the Bureau of Labor Statistics reported recently. Only 15 percent of the US working population is doing business from their homes at least one day a week, the bureau said.

''Telecommuting is like a foreign posting, with many people returning at some point to the workplace full time,'' said Ray Boggs, a vice president and home office specialist with IDC, a technology market research firm in Framingham. In contrast, at-home business owners ''remain at their posts for longer periods of time, or 10 years or more,'' he added.

Depending on the type of home business and the effort put into it, owners nationally earn as little as $5,000 a year to more than $100,000 annually, Boggs said. Wherever they are located, home businesses that succeed are those ''that have found a solid niche,'' said Lewis.

Also, an owner must have, or develop, an ability to sell their products or service, said Jack McKiernan, executive director of the Boston College-based Small Business Development Center. ''But it's also a fact that a lot of people don't like to sell,'' he said.

Ward and Morelli are just becoming immersed in marketing their products while Keith Berman, the college counselor, and Clark Fitzgerald, who makes shrines for funeral home clients, are well along in promoting their ventures. All stressed the importance of liking what you do, being persistent in forging ahead despite setbacks, and taking advantage of small business counseling programs.

A single mother who worked in retail, Ward began making denim purses in January and then, a few months later, sought free advice from the Boston chapter of the Service Corps of Retired Executives, a division of the Small Business Administration.

''My family has always been artsy-craftsy, so I followed in that tradition,'' Ward said, adding that her business developed serendipitously. ''One day, I cut up a pair of blue jeans and saw what I could do with the pieces.'' That led to the design of about eight styles of pocketbooks, all aimed at the teen market, priced at $12.50 each, she said. Ward said she is now exploring marketing her bags to boutiques.

While she was in banking for 10 years, Morelli always thought about becoming a craftsperson. She was laid off in December as a customer service representative by Bank of America.

''I didn't have any fears of going into business for myself,'' Morelli said, explaining that several relatives are entrepreneurs. She said it also helped knowing that she could count on her husband Paul's income to some extent.

Last April, Morelli incorporated her business, Thistledown Bath & Body, after participating in an unemployment seminar and taking a 10-week entrepreneurial program offered by the Jewish Vocational Service of Boston. The first product was a fizzy, aromatic bath bomb. She then developed a line of moisturizers, body sprays and lotions, bath salts, and a lip balm, all of which she prepares herself. The lip balm is priced at $2, the other products, $8 each.

Initial sales, Morelli said, were at weekend artisans' fairs. Now, she is hoping that her new website (thistledownbath.com) will generate the lion's share of sales.

''This is not just a job; I love what I'm doing,'' Morelli said.

Counselors at the Small Business Development Center at Boston College have provided the support for Berman, 27, who has been running his college counseling business since last June from his Cambridge home. He was a teacher in New York City and worked for a Department of Education contractor in Washington, D.C.

Because his savings were limited, starting a home business was his only option for becoming an entrepreneur, Berman said, adding that lower costs were the deciding factor. He said he has a number of clients, with whom he meets in their homes. He is also pursuing a doctoral degree in education at Harvard.

Fitzgerald, 50, of Bridgewater, said his business, Homeshrine LLC, which was started in October 2004, is now ''taking off.'' Three products — a flat mirror frame, a corner shrine that has a shelf for a votive candle, and votive candles — are offered to funeral homes. So far, he said, 10 have become customers. Products are priced from $89 to $160.

A new website (www.homeshrine.com) is also furthering the marketing effort, said Fitzgerald. His wife, Andrea, 49, is his business partner.

Although sales are growing, Fitzgerald said he, like any new entrepreneur, has to rely somewhat on savings and banking lines of credit. Also, if he had to, he said, he could look for part-time work. ''But I've always wanted to control my destiny,'' he said, ''and that's what I'm on my way to doing.''

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