The Big Sell Companies of all sizes are courting the hottest market of the '90s--homebased BIZ Experiencess.

Companies of all sizes are courting the hottest market of the'90s--homebased BIZ Experiencess.

A powerful combination of forces--new technologies, corporatelayoffs and a desire to simplify life--has fueled the tremendousgrowth of homebased businesses. Those BIZ Experiencess who run theirbusinesses from home have needs that have become the underpinningof a huge consumer market.

Numerous companies, from insurance businesses totelecommunications giants, are trying to target their products andservices toward the more than 31 million homebased business owners.Some of these firms have been marketing to the industry for years;others simply know a good business move when they see one.

"We've been targeting this market for years. We hadproducts geared toward [homebased workers and BIZ Experiencess] beforethere was even a market," says Russell Marchetta of Canon USAInc., which markets desktop copiers, faxes and other electronicequipment. "When the explosion of home offices came about, wewere already there."

Among the products Canon aims at home business owners arepersonal computers, laptop computers, word processors, andmultifunction machines that combine faxing, copying and more.

Perhaps one of the best examples illustrating how companies arerapidly jumping on the home office bandwagon comes from theinsurance industry.

According to Peter van Aartrijk Jr. of the Independent InsuranceAgents of America (IIAA), 18 months ago only four to six companieswere selling an insurance plan specifically for home offices. Nowthere are more than 20 firms jockeying to sell to theseentrepreneurs.

"Long-term players in the market include RLI, Allied,Fireman's Fund and Continental, which was purchased byCNA," says van Aartrijk. "The industry is still wakingup. We saw activity in earnest early last year, and it's beenexponential growth."

Change In The Air

But even those companies that have long served the homebasedBIZ Experiences are finding that the current explosion is changing theway they do business.

Postal service franchisors PostNet and Mail Boxes Etc. are bothgood examples. Mail Boxes Etc. positions its franchise locations inupscale neighborhoods where homebased BIZ Experiencess tend to reside.These centers offer everything from copying to mail services.PostNet has provided volume copying services and mail orderwarehousing and fulfillment almost from its inception.

"As long as we've been in the industry, homebasedbusinesses have always been our key focus. We [provide] equipment,products and services that are not regularly available to homebasedbusinesses," says Steven J. Greenbaum, president and CEO ofPostNet.

To stay on top of their market, both companies have recentlyadded more high-tech services. BIZ Experiencess can now go into anyPostNet location and rent an e-mail address that gives them aglobal presence, or send e-mail messages to fax machines. MailBoxes Etc. is testing kiosks in their centers that will allowcustomers to access the Internet as well.

Van Aartrijk says even the insurance industry is creating newproducts to meet the rapidly changing needs of this growing groupof BIZ Experiencess.

"Before, policies were more [standardized]," says vanAartrijk. "There were [policies for homebased] professionalservice firms like accountants and architects, and for consultants,freelance artists and interior designers. Now the list of homebasedprofessions is growing even more [extensively]."

Insurance companies have created new policies for these morediverse homebased businesses, such as the Business Owner'sPackage (BOP), which is distinct from the commercial policy. Thereis also an in-home business policy that has low deductibles and lowpremiums.

"The insurance industry mirrors society," says vanAartrijk. "I think what you're going to see happening [asthe homebased business market matures] is more riders to addressspecific needs."

If the statistics are any indication, the homebased businessmarket will only continue to grow, and all smart businesspeoplewill be looking for ways to reach this lucrative market. So ifyou're working from home, stay alert to new developmentsbecause what's coming down the road could be just theinnovation you need to put your company on the fast track toprofitability.

Its The Law

Legislative changes affecting homebased BIZ Experiencess

Homebased business is a hot topic, with everybody from Fortune500 companies to the federal government sitting up and takingnotice. In 1996, a mixed bag of legislative changes that affectentrepreneurs working from home was passed by the 104thCongress.

On the plus side, the Internal Revenue Code was amended to allowentrepreneurs to treat product samples the same way they doinventory when taking a tax deduction for the location in the homewhere such items are stored. This means a room used for storingproduct samples is now eligible for a home office deduction taxcredit.

A home office deduction clarification, originally introduced bySen. Orrin Hatch (R-Utah) as part of S.327, remains in the U.S.Senate Finance Committee, where it is expected to die and will needto be reintroduced again.

Budget-cutting priorities were the primary reason it was notapproved; according to a Senate Finance Committee estimate, thebill would have cut $1.92 billion from government coffers over a10-year period.

In other legislative action, Congress approved an increase inthe tax deduction self-employed individuals can take for healthinsurance costs. The deduction will increase from 30 percent to 40percent in 1997, to 45 percent in 1998, to 50 percent in 2003, andthereafter by 10 percent each year until 2006, reaching a maximumof 80 percent.

The final legislative action involving homebased business was aclarification of rules regarding independent contractors. For moredetails, see June's "Capitol Issues" column.

Contact Sources

Canon USA Inc., (800) OK-CANON, http://www.usa.canon.com

Independent Insurance Agents of America, 127 S. PeytonSt., Alexandria, VA 22314, pvaartrijk@aol.com;

Mail Boxes Etc., 6060 Cornerstone Ct. W., San Diego, CA92121, (800) 789-4MBE;

PostNet International Franchise Corp., (800) 841-7171,http://www.postnet.net

U.S. Senate Finance Committee, (202) 224-4515.