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Ask Jane Applegate
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January 17, 2000: 12:41 p.m. ET
Marketing a home-based business concept; opening a clothing business
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NEW YORK (CNNfn) - Here are answers to your questions for CNNfn small-business columnist Jane Applegate:
Dear Jane: A friend has developed a home-based business concept in Australia that I'm trying to market in the U.S. Basically, people are taught how to refill cartridges for printers and fax machines. His system easily refills cartridges at less than half the cost of buying new ones. How can I assure people this is not a scam?
You will have a tougher time marketing your concept because so many home-based business people, unfortunately, have been ripped off by disreputable scam artists. But, taking this fact into consideration, you should be able to market this new idea to home-based entrepreneurs if it is as good as you say it is.
Since word of mouth is still the most powerful form of business-to-business marketing, I would suggest finding a few sales reps and offering to set them up in business at a very low cost. Provide them with current mailing lists, membership in the local chamber of commerce and other marketing support so they can reach a lot of potential clients quickly.
The only way you will begin to build a buzz is to let them see for themselves how lucrative the opportunity can be. Make sure all your reps can buy the ink wherever they want to and are able to return any unused supplies without a penalty. Making it easy for people to get out of the business is critical if you want to build a good reputation and credibility.
I would hope that you, too, are planning to run the business from your own home, so people will see how easy it is. Start small and test the waters before you invest too much time and money in the project.
Dear Jane: My husband and I will be coming into a sum of money and we want to open a clothing business. My friend sews very well. I'm working now and will need to do so until we start our new business. I also have two children. I know very little about running a business.
Before you get started, I would strongly recommend working for a business similar to the one you want to open. If possible, make a transition from your current job to the new industry as soon as you can. You really need to get some experience before you invest your own money.
You probably should save the "new" money to live on while you are learning as much as you can about the clothing business. If you live in a big city, sign up for classes at a college that specializes in merchandising, fashion design and manufacturing.
The fashion business is extremely competitive, expensive and rough. If you are lucky enough to land an order from a big department store, it will require every piece to be shipped with special bar-coded "hang tags." If the tags aren't perfect or you put too many items in one box, the store will withhold a percentage of your payment in a system called "chargebacks."
I would suggest getting some free personal or online counseling from a SCORE counselor who has experience in the clothing industry. You can locate a SCORE office or sign up for counseling at: www.SCORE.org.
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