Wednesday, March 21, 2007


Before the beginning of industrial revolution, offices are in form of small offices which run small businesses and handle little paperwork with 1 up to 10 workers being employed. As the industrial revolution began, large number of workers needed to mass produce goods and run a big factory. However, offices are still needed to handle the paperwork in order to run the businesses. At that time, office size is big and employs many “white collar” workers in order to keep up the business. As there is an advent of personal computers and communication, office workers decentralize and reduce the size of offices with lower overhead and hence, greater productivity. Nowadays, many offices are in form of SOHO which, as just what it implies, a small or home based business that typically has fewer than 25 employees. In addition, SOHO with less than 10 employees is called microbusiness.

A. What is SOHO?

SOHO stands for Small Office Home Office. This term has been used to a great extent by companies who market products targeting the great numbers of small businesses which have a tiny or medium sized office. Many people in several professions such as lawyer, IT consultant, real estate agents or surveyors in small and medium sized towns operate from such home offices.

B. Why SOHO?

Why do people choose to do business in SOHO? The answers are as simple as the question and it is more likely as the result of many factors in economy. The answers are:

  1. People can do business from their own house
  2. Less (or maybe none) tax to be paid
  3. Need less capital/ low start-up costs (sometimes it doesn’t require any overheads or any specialized training)
  4. Less workers but higher productivity
  5. Flexible schedule
  6. Less expenses for items like work clothes, lunches, petrol/gas, etc
  7. More capable computers and office equipment
  8. Buyers are well informed

However, SOHO does have disadvantages, such as:

  1. There is no health insurance like if you work on a company
  2. The amount of your income won’t be at a fixed amount of money, in contrast with if you work on a company and get same amount (or maybe more) of salary every month.

Moreover, it might be difficult for those who are used to work in a common office to adapt with SOHO environment because they might miss the excitement and interaction of the workplace. It might also be difficult for those who are mothers; they might struggle with finding time to do their work if their children are demanding. Therefore, making decision to work from home requires careful thought and planning. You need to review all aspects of your life to determine if it would be beneficial for you and your family. In addition, you might also need to save up some money before start building a SOHO because SOHO business might take some time to become profitable since all business have slow times, and more so in the start-up phase. Otherwise, you will struggle with business and personal bills.

C. What do we need to run a SOHO?

In running a SOHO, it is necessary to really set our mind on the business we choose and have a will to learn, take few calculated risks, plan our next move and stick with it in order to succeed. There will be a great stress, but there are also great rewards and joy in doing the business. One of the rewards is that we are able to control our own destiny and having immediate feedback for our decisions. It will also be very rewarding when we have succeeded in the business, knowing that we are the one who created this SOHO company from the very beginning.

There are some points that are essentials for SOHO venture; they are space, time, money, market, plan, and passion.

Ø Space

A nice office is not always necessary. Different work dictates different space needs and it depend on our typical work day and work style. We might also need to consider several factors like whether we will have clients visiting regularly, storage needs, and what space is available. However, the most important thing is we have to have some place to store our paperwork and to do our work, after that, it’s all up to us and our budget.

Ø Time

Essentially, we might have to give up some of our spare time to work on our business. It is better to work just a little bit every day than never getting started, or always saying that there is no time for it.

Ø Money

Never let lack of funds causes us to give up on our business. Starting slowly while keeping the cash flowing with a job will more likely leap us into success when the time comes. In addition, some quick cash might be needed to start producing or operating our business. Here are some ways to achieve it:

1. Offer a discount or incentive to customers who pay up front

2. Leasing our equipment

3. Corporate with another related venture

4. Ask suppliers for credit

5. Stick with our core product and stop producing additional items

Ø Market

SOHO owners must know who their customers are, what their customers want, and where their customers are. It is also important to do a research on the market targeted (e.g. doing research to find out how much money the customers can afford to buy our product).

Ø Plan

Plan is essential to save time if SOHO practitioners thinking it trough before they start doing their SOHO business. It will also help them to run the business with careful thought and calculated steps.

Ø Passion

Passion will make the business goes fun and worthwhile. Therefore, it is important for SOHO practitioners to carefully choose the business which they are going to run.

D. Is SOHO legal?

Permission or licenses might be needed in order to start build a home-based business. You might need to check your state, county and city governments and ask them what is required to operate a business in your area. It is important to find this out because the governments might have penalties if you open your business without proper documents that might cost you more than the original fees. Some points that might be considered by the government about your business:

  1. The affect of the business on the neighborhood
  2. Will it increase the traffic noticeably on your residential street?
  3. Will there be a substantial in crease in noise?
  4. Your neighbors’ feeling about having this business alongside their homes
  5. Will you need any vendor’s license?
  6. How much taxes should be deducted?

You should note that regulations are sometimes changed, so be sure to check the regulation regularly in order to keep your business run legally.

E. Role of network in SOHO

By using network, your SOHO could reduce cost by sharing peripherals and a single internet connection all at the same time; hence your SOHO productivity would increase and work could be done fast and efficiently. Your SOHO could also use wider network, for example internet, in running your business (e.g. promote your company by using a website, applying on-line customer service, online transaction, etc)

How do you connect the network?

  • Dial Up Technology

This flexible technology has been around for a long time. This is the main solution for a mobile endpoint and it will be more cost-effective if intermittent connectivity is needed. In contrast, dialup may become more costly if permanent connection is needed or if connectivity is needed most of the time. Furthermore, dialup connections are not typically as fast as and less secure than a dedicated network connection.

  • xDSL

This service could provide an “always online” connection faster than 56 Kbps with just a monthly charge but no per-minute charge.

  • Cable

This is the basic technology used to connect the network.

  • VLAN

Basically, this is a collection of nodes that are grouped together in a single broadcast domain that is based on something other than physical location. It is secure because it separates systems that have sensitive data from the rest of the network. Moreover, network administrator also could create VLAN that can reduce number of router hops and increase the apparent bandwidth for network users. Furthermore, network administrator could also control who sees what network traffic by using a table called access lists.

  • Wireless Network Technology

What role does wireless technology has in running a SOHO? Wireless technology holds a very important role in SOHO, especially if your business starts to be more complicated and you start to be a “mobile” business person. Wireless Technology, such as Bluetooth, hotspot or satellite link would be very helpful in connecting you to your SOHO network. In order to support the network, wireless technology would be the best solution to connect you onto the network because it is faster, more efficient, more flexible, and more convenient than using wired connection.

Is it safe?

Wireless technology in SOHO environment uses no central authentication servers, however, it uses special home mode Wi-Fi Protected Access which asks network users for passwords before they could login to the network. Therefore, using wireless technology in SOHO is still safe and secure.

No comments: