About Starting Your Own Word Processing Business
I get a lot of requests via E-mail and the message board from people advertising their home-based businesses or asking if we hire home workers.
I also receive many questions regarding specific areas of interest related to starting a typing and word processing business. In addition, there are questions ranging from marketing our services to the equipment and software applications used to perform these services.
I have decided to put together some of the most popular Frequently Asked Questions (FAQs) and my response to those questions. Please realize that these are either my own opinions, based on my own experiences, or from information I have gathered from a variety of other sources. I am not an expert, by any means, and cannot guarantee that these suggestions and ideas will work for you. Also, please bear in mind that the legal aspects differ from state to state and it is important that you check with your local city, county and state for licensing and regulations regarding your specific business. With regard to any form of telephone communications, please check with your local telephone company regarding placement of yellow page ads, as well as FCC regulations regarding sales and marketing via phone sales, faxes, etc. For more information regarding FCC regulations and the Telephone Consumer Protection Act (TCPA), please read the
Consumer News, What You Can Do About Unsolicited Telephone Marketing Calls and Faxes.
I would say that the the most frequently asked question of all is "I would like to be able to work at home, where do I start?"
There are so many things to think about when starting your own business. I'll touch on some of them briefly and then update the FAQ from time to time. Areas where I know I want to elaborate on later are designated with ".........." after each section.
Q: Do I need an occupational license?
A: You need to check with your city, county and state to find out the requirements for obtaining an occupational license. Some cities/counties don't allow home-based businesses; however, since more and more people are working out of their homes, the cities/counties are revising their rules and regulations to accommodate them. I think they realize people are going to do it with or without them, so they may as well gain more control over it and make some money out of it at the same time.
Q: Do I need to register my business with the state?
A: You need to check with your State (Division of Corporations and/or Fictitious Name Filing) and find out if you are required to register your business with the state.
Filing a fictitious name is usually done through the Department of State. The requirements for filing a fictitious name vary from state to state. In the State of Florida you must file a fictitious name registration if your company name is anything other than your full name, first and last. For example, I would not have to register a fictitious name for "Susan Gilland's Secretarial Services". However, I would have to register a fictitious name for "Susan's Typing Services" or "Gilland's Typing Services". Some states only require the last name. Also, in Florida you have to put a Fictitious Name notice in the local newspaper for one day. The newspaper has standard forms that need to be filled out. So, if it is required, call them and they will send the forms to you.
If you are filing a fictitious name, you must check with your state to see if the name is available. You can either call them and request the forms be sent to you, or you might find them on their web site. You might want to try doing a search on your state, as well as the Division of Corporations.
You certainly don't want to go to the time and expense of creating your marketing materials, stationery and business cards until you are sure the name is available.
Q: What kind of start-up expenses will I have?
A: In order to figure out your start-up expenses, you need to determine what you will need in order to provide your services, such as office furniture, business telephone line, equipment, software and supplies.
It may take you a year or so before your business is actually making a profit. Make sure you have enough funds to cover your expenses for awhile, or other work to supplement your income.
Q: What kind of business equipment will I need?
A: You need to decide on what type of services you will be providing. Will you be doing transcription, word processing, database management, desktop publishing, accounting, etc. Determine what equipment, software and office supplies you will need to perform these services.
To give you an idea, the following is a list of equipment we use: 2 Pentium computers, laser and color inkjet printer, scanner, transcribing equipment, two phone lines (business and residential), shelving, several file cabinets, office supplies (calculator, stapler, pencil sharpener, tape, hole punch, paper cutter, paper supplies, etc.). We have a pretty extensive collection of software, which includes several popular office suites (Corel, Lotus, MS OFfice), desktop publishing (PageMaker, MS Publisher), graphics (various paint programs, greeting card, banners, etc.), photo imaging (Adobe Photo Deluxe, Photoshop), accounting (MS Money, QuickBooks, Quicken), web editors (FrontPage, HotDog), various GIF & 3-D programs. The programs we use most are MS Word, WordPerfect and QuickBooks.
Of all the desktop publishing programs I have tried, WordPerfect handles most of what I do with a lot more ease and flexibility. I use it for word processing, flyers, brochures, newsletters, business cards, data entry and mail merge. Personally, I don't like MS Word, but I defer to it when my customers prefer that I save the work in MS Word format. WordPerfect is much more versatile and logical, but I've also been using it for over 15 years, so maybe I'm biased :) We also use the scanner and photo-imaging software quite a bit. Our computers are networked so that we can share information, as well as the cable modem. I also use the fax/modem a lot, as well as the voice mail system that came with it.
If you have to limit your expense to just one good office suite, I would recommend MS Office because that is probably the most popular suite that people are using. It can handle just about any job requiring word processing, database and spreadsheets.
Q: What kind of sales and marketing materials will I need?
A: You will need business cards, brochures, flyers, letters of introduction, as well as mailing materials and postage. .....
You will also need to create service agreements, proposals, invoices, letterhead, etc.......
Q: Why do I need a service agreement, and what should it say?
A: A service agreement is a good thing to have so that there are no misunderstandings about the services, pricing and/or billing methods.
Up until just recently, I was really bad about having my clients sign a service agreement. It seemed rather intimidating, especially for small jobs. However, no matter what size project it is, you certainly don't want to have to worry about getting paid for the work you've done. The service agreement spells out all of the terms and conditions related to services, pricing and billing so that there are no misunderstandings. It is beneficial to both you and your client to have a service agreement.
Anyway, after receiving several requests for job estimates I decided to revise my invoice letterhead to conform to my QuickBooks job proposals. Once it is accepted, Quickbooks uses it to create the invoice. Then it dawned on me to incorporate my service agreement into the proposal. I already had a line for acceptance of the proposal but it didn't include all the terms and conditions in my separate service agreement, which is a full page. I changed the name of my Service Agreement to Terms and Conditions and then printed it on the back of my proposal letterhead. This way, when I print proposals it has the Terms and Conditions on the back and an Acceptance of Proposal on the front with a date and signature line. It sure makes it easier when the customer is presented with the agreement and proposal all in one document. If they request a fax, I'll fax them both sides.
I also printed out some blank proposal forms for those who call on short notice or don't request a proposal in advance. When we go over the work that has to be done I just write it onto a proposal form with the same T's and C's on the back and have them sign it.
To see a sample of our proposal and service agreement (terms and conditions),
Click here
Q: What should I charge for my services?
A: I think most people will agree that pricing is one of the toughest parts of this business because there are so many variables. There are certain skills required to do certain jobs, some more complex than others, combined with the time and expense involved with each project. You need to consider the cost of equipment, software programs, and supplies required to do the job. Then you have to consider the source of the material and level of difficulty working with it. Source material may be handwritten, typed or taped dictation. You might want to rate the levels of difficulty for legibility, and price accordingly.
There's no easy answer. Some people use complicated formulas, some charge more for jobs that require more complex skills and/or expensive software. Some just decide how much they want to make per hour and base their prices on how much time it takes to do each project. In time, when you've been able to establish certain patterns, you'll be able to better estimate your jobs.
It may be easier to quote an hourly rate until you can get a sampling of the work. Unfortunately, I find that most people want to know what they're getting and expect you to quote by the page, line, record, etc.
Rates for services also vary depending on your location and are dictated by what the market will bear. You need to do your homework and find out what similar businesses charge for their services. The simplest way to determine pricing is to figure out what you need to make to cover your business expenses and salary. Determine how many hours you will need to work in order to generate enough income. Allow time for marketing and general office administration. You may require ten hours a week for bookkeeping and marketing, so add that time into your hourly rate. In other words, if you want to make $20 an hour and you work 20 hours a week on actual projects and another 10 hours a week on marketing and office administration, then you want to charge $30 an hour for your services. Again, you have to consider what the going rate is in your area. You can't expect to charge $30 an hour when everyone else is charging $20. I just want to stress that you should allow for non-chargeable time related to running your business.
You also might want to consider different pricing methods for certain projects. For example, if you do transcription and you know you type seven pages an hour then you might want to charge $3.85 per page or .12 a line, etc. If you do database management you might want to charge .25 per record, so much for initial setup, so much for mail merge and printing letters, etc. Consider your costs and hourly rate to come up with different methods of pricing.
You must be careful when comparing your rates to similar businesses in your area. Charging less than the competition isn't necessarily the smartest way to do business. Nothing is going to stop the new kid on the block from doing the same thing to you. You'll only be hurting yourself in the long run, and you may lessen the value of the services you and other similar businesses provide. I've found that by lowering my rates I've gotten more jobs, but I end up working harder for the same money and it's not worth it. Your rates may seem too high for some people, but if you've put a fair market value on your services you'll find that there are people who are willing to pay for quality work, and those are the only kind of people you should want to do business with, anyway.
I've posted a pretty long message regarding pricing. Most of it is already mentioned above, but you might want to read it, anyway. Click here
Q: How do I market/advertise my business?
A: First of all, I would suggest that you put as much time and effort into marketing your business as you possibly can. There are many ways to do this. Some ways are more effective (and expensive) than others, so it depends on your marketing budget.
I think the three least expensive ways to market your services are: 1) friends and family, 2) word of mouth, and 3) networking. ......
Probably the most effective, but more expensive, is through the Yellow Pages. Take out the largest display ad you can possibly afford; even a 1/2" ad is better than a single line listing.
Obtain names and addresses of local businesses and send out your marketing materials. Include a letter of introduction, brochure, flyer, price list, business card, etc.
Distribute flyers to local businesses. If you intend to do resumes and/or school papers for students I would suggest putting flyers up at your local schools/colleges.
You might consider calling some personnel agencies where you might be able to get referrals or pick up some temp assignments if you're willing to work outside of your home. ......
That's it for now. I will update and add to the FAQ's from time to time. If you have any ideas or suggestions, please post on the WWWBoard or send me e-mail.
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