Discount software store

Mass merchants might be best advised to forget about the SOHO (small office home office) market and concentrate solely on the HO part.

Today's home-based workers are swelling in number and creating new businesses at a record rate. According to Paul Reynolds of Babson Colleges entrepreneurial studies program. about 7.5 million Americans are actively participating in start-up companies, mostly based from home.

Most retailers are missing out an at least a significant portion of this robust market segment by merchandising products that are too advanced and too expensive for these users.

"Home business owners are probably better off sticking to their core competency, not trying to master skills, like accounting, that are better left to professionals," noted Dearborn Multimedia senior vp Anita Constant. What home workers need are products that are compact, inexpensive and highly focused, she added.

When mass merchants first moved into the computing market, business products made up an overwhelming percentage of their offerings. But over the years, games, edutainment and educational software have virtually driven business software off the shelf, and business-oriented peripherals have lost ground to consumer products. For instance, most mass merchants now stock only low-priced, low-capacity printers, perfect for occasional use at home.

But SOHO, at least the HO end of it, is coming back, driven by a host of lower-cost, function-specific products that appeal to non-corporate users.

Of course, standbys like Intuit's Quicken and Microsoft Office have held shelf presence throughout, but they are now being supplemented by a new wave of software aimed specifically at the home-based entrepreneur.

For instance, Dearborn Multi-media, an offshoot of the Chicago-based book publisher, has released a series of Moneymaker titles, which include "Starting Your Home-Based Business," the Business Planning Guide," "the Star-Up Guide," "How to Form Your Own Corporation Without a Lawyer for Under $75," and several other financial and strategic packages. The software retails for about for $19.99.

The advantage of these highly specific and low-priced applications is that with 12, million Americans becoming self-employed each year (although many of them quickly return to the ranks of corporate America), these titles appeal to many consumers who lack the technical skills to master advanced business management packages, which often run in the several hundred dollar-range.

"There are 24.3 million home-based businesses in the U.S. today," Constant said, " and we're providing the early steps for the 12 million wannabes who test the waters every year. And don't forget that there are many more who are holding a full-time job, but dreaming of working for themselves. These people are very interested in taking a look at what fulfilling that dream will require."

For more advanced home workers, the need for productivity aids grows exponentially as their businesses grow. As a rule, however, the space set aside at home rarely grows with the business.

Consequently, a market has grown for compact peripherals that deliver the essential functions of a full-size business. The average home worker doesn't have the space, money or workload requirements to justify a personal secretary or advanced fax machine. But an under-$200 device called Espresso, from Beyond Communications, can fulfill many of those functions-answering phone calls, forwarding important ones to any of three telephone numbers, forwarding faxes, broadcasting a menu of fax items to callers automatically and much more. And Espresso is about the size of a trade paperback.

Similarly, Iomega's Zip Drive allows home users to upgrade their hard drives, then carry virtually their entire business with them on the road. The $199 Zip Drive is fully portable, and each $20 disc can hold 100 megabytes of data. Additionally, the drive allows home business owners to back up vital files easily and inexpensively.

According to Dearborn Publishing's Constant, that's what the vast majority of home business owners are looking for-simple, inexpensive solutions for common problems.

"The more options you give someone, the more confusing it gets," she said. "At some point, a business gets so large that it needs those options. But for the majority, a simple solution to a given problem is the key."

Dearborn was prompted to get into the interactive business by the wave of downsizing that ambushed America's middle management over the past five years. The company works with SCORE, the Small Business Association and the Small Business Development Council, to produce written and interactive materials for the scores of entrepreneurs hoping to start businesses.

"The real inspiration for 'The Business Planning Guide', was the banking industry, which was finding that most small business loan applicants didn't even know what a business plan was," Constant said.

Clearly, retailers are learning to appeal to this downsized home user. Best Buy, for instance, has found that a core offering of office supplies appeals strongly to its relatively young and affluent customer base.

"We surveyed our customers and found that a lot of them were working at home. They didn't necessarily want to go to an office club just to pick up some binders and pens," vp Kevin Gordon said. The program, which began a year ago as a few endcaps and a convenience area near check-out, has blossomed into a four-canyon power assortment located at the front of the store leading into computers and business machines. The department, which chairman Dick Schulze called one of the most profitable in the store, has been rolled out to most of Best Buy's larger stores, with smaller selections in older units.