She’s Mom Incorporated: Debra Cohen, Home Referral Network

Debra Cohen

Debra Cohen, one of the moms featured in Mom, Incorporated, initially wanted to contribute a few hundred dollars a month to her household income so she could afford to stay at home full-time with her infant daughter. Today, she not only owns Home Remedies of NY, Inc., but she’s created a nationwide network of independent referral companies using her business model. We asked her to tell us more about her company.

MomIncorporated: Provide a quick synopsis of the steps you took to get the business going.
Debra:
First, I informally interviewed a few contractors and homeowners in my area to see if they’d be interested in using this type of service.  Once I felt confident about my idea, I brainstormed a business name. Once I came up with the name “Home Remedies,” I knew there was no turning back. Naming my business somehow gave it an identity of its own.

I interviewed lawyers, accountants, insurance agents and contractors to get their input on liability issues and the best way to structure my company. I also asked them if they’d be willing to be a part of my Board of Advisors so that I could turn to them with questions as I launched my business.

With a $5,000 loan from my husband’s retirement savings plan, I created my legal structure, bought a computer and set up my home office in my basement (adjacent to my daughter’s playroom).

To build my initial contractor base, I networked with real estate and home-improvement-related professionals in my community to find reliable contractors. I screened each one of them based on the feedback I’d received from my Board of Advisors and my own research.

To create my marketing materials, I hired a retired senior citizen (who used to work as a graphic artist) to help design my logo. A colleague from my job in corporate America helped me write and design my direct-mail campaign. I did some research to find a mailing list that would target my prospective customers and, within three months, I was in business.

MomIncorporated: What were the biggest challenges you faced, and how did you overcome them? 
Debra: My biggest challenges were that 1) my husband and I had just moved and were new to the community and 2) I love to decorate and renovate, but I didn’t have any technical home-improvement experience at all.

In hindsight, these were actually my biggest assets:

  1. Not knowing anyone forced me to get out and network.
  2. I realized that my area of expertise wasn’t in the technical aspects of home improvement. My contractors are the experts in their field and really don’t like third-party interference when it comes to their trade. My expertise is in sales and marketing, which is where most contractors fall short.

MomIncorporated: You’ve been in business 15 years. What has changed – and what remains the same?
Debra: Ironically, the core of my business has remained the same. This is still a people business, built on relationships with both my contractors and my homeowners.

Also, over the course of 15 years, I’ve worked through quite a few changes in the economy, and this business has remained recession-proof.  People will always invest in their homes but, in a down economy, they take on more moderate projects and are a lot more careful where they spend their renovating dollars.

Also, homeowners who once thought they would upgrade to a larger home are staying put and renovating instead.

Mom Incorporated: Which is now your primary business – the referral business, or the business opportunity for others starting their own business?
Debra: I would say it’s a 60/40 split. I spend approximately 60 percent of my time consulting with new HRN owners.

MomIncorporated: What’s the difference between running the business on your own – and helping others start and run their own businesses?
Debra: Both are gratifying because I get to help people in two different ways, but I do have a passion for business and really enjoy the consulting side.  Also, each HRN owner brings a unique personality to his or her business, and I find that I learn new things from them as well.

MomIncorporated: What questions are the most frequent from those who buy your startup packages?

  • What happens if a contractor does a bad job? If a homeowner isn’t happy with a job, then the HRN owner’s role is to facilitate communication between the contractor and the homeowner so that the job is completed to the homeowner’s satisfaction.
  • Is it hard to get contractors on board? Since there are no upfront fees, contractors are pretty open to working with my HRN.
  • What size commissions should I charge? Commissions can range from 6 percent to 20 percent, depending on the size of the job.  In some cases, I take a flat finder’s fee.
  • How large of a market should I plan to cover? This is really a local business.  Contractors don’t want to travel too far outside their immediate area for a job.  The quality of the market is more important than the size, and it’s better to start local so you can keep tabs on your contractors and their jobs’ status.
  • What are the operating expenses in the first year? This is a very big word-of-mouth business, and operating expenses are minimal.  Basic month-to-month expenses include a phone, computer, mailing list and postage.  On average, I spend about $250 to $300 per month.

MomIncorporated: What are you top tips for a mom who wants to start a home-based business?

  1. Chose a business that allows you to do something you love on a day-to-day basis, and you’ll have a much greater chance of success.
  2. Working from home can be challenging, especially if you have small children.  To work efficiently and maintain a balance, try and break your day into blocks of time devoted exclusively to your business, your family and (most important) yourself.
  3. Owning and operating your own business requires you to wear a lot of different hats (in addition to being a mom), and it’s impossible to be an expert at everything.  Outsource the tasks that don’t fall within your area of expertise, and focus on the money-making aspects of your business.
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