A cottage business is something you can do from your from home. It involves small scale production of goods from your home which can be locally sold and even exported. If well coordinated and supported by all stakeholders cottage businesses can employ and lift millions out of poverty. It’s the fastest way to industrialize a society at scale. China has largely developed because of cottage businesses which have grown into large businesses exporting goods around the world.
Anyone can participate in the cottage business at different levels of scale. You can have the likes of Coca Cola dominating the juice market but you can also make fresh juices at home which you sell in the neighborhood.
The following process can be followed by anyone who wishes to start a cottage business from home. We have applied this process in growing our small cottage business from a tiny kitchen in Kisaasi to over 20 districts in the country:-
- Ideation. The first step is figuring out which product to make. There are thousands of potential products to choose from. The easiest thing to do is to look around your house and figure out the things you use on a daily basis from the time you wake up to the moment you go to sleep. These are potentially the products you can make. When you wake up you brush your teeth with tooth paste and a toothbrush. You shower using soap and a scrubbing brush. You use toilet paper and use a toilet cleaner gel. You brush your hair. You may apply lotion, deodorant, perfume and other body care products. You brush your shoes using a brush and shoe polish. You dress up in clothes of all sorts. You then have break fast of all sorts including tea, milk, bread, cakes, katogo, etc. You go to work in a car or taxi. You use a computer, paper, pens, etc. at work. You have lunch. You meet friends for all sorts of drinks after work. You return home, have dinner and watch TV. Then you go to sleep in a bed with a mattress and bed sheets. As you can see there are hundreds of products to choose from. You can repeat this exercise for people of different social classes and backgrounds and you will notice that the possibilities are endless. The idea is to copy and where possible improve upon the current products you use everyday.
- Learning. After figuring out what you want to make the next step is to figure out how to make it. The easiest way to find someone who is already making this product and ask them to teach you. You may have to pay some money for this. You can also teach yourself from the internet. Simply google how to make that particular product and you will get thousands of websites with the knowledge you seek.
- Experimentation. It’s now time to experiment and make a prototype. You will need to mobilize a few resources to kick start your venture. Invest in the basic equipment required to make a minimum viable product. This is the simplest version of a product which meets the target customers functional requirements. For example if you’re making liquid soap the soap should smell good, have good consistency, be easy on the hands, foam well, look good, and actually clean oily utensils. This is a period of experimentation and it might take you a while to get it right. But no worries this is all part of the learning curve.
- Testing. Once you have a prototype you then give away a few samples to different people and ask them to give you feedback. You then use the feedback to refine your product offering.
- Market research. Part of the feedback you collect is about your customers tastes and preferences. You also research about the competition and why customers prefer those products. You find out about distribution and pricing. All this information helps you to refine your product offering and positioning in the market.
- Branding. You need to give your product an identity and a name. Just like you wouldn’t call your child any random name carefully consider what to call your product, how it will look, what colors it will be clothed in. If possible pay someone who is good at design to come up with a brand identity for your product. This is a worthwhile investment especially if your product eventually takes off. After you design your brand you need to register it to protect yourself from copy cats.
- Packaging. You have to clothe your product in something like a box, wrap, bottle, etc. The packaging protects your product and it’s what the customer sees and feels part. Packaging is so critical and should not be ignored. The packaging also carries the brand name and other critical information. You have to think of the right material, shape, color, size, etc. Again if you can pay someone to design for you the packaging the better. It’s like hiring a fashion designer to tailor your wedding gown or suit. You wouldn’t go to a random person. Branding and packaging can be a big competitive advantage for a small cottage business.
- Distribution. Next we need to determine how to move the product from our home to the customers. You can start with family and friends and use a boda boda to deliver the products. As you expand you need to get your products into retails outlets. You can start with the local shops and supermarkets around your home. As the business grows you may need to hire a vehicle to move the products if they are heavy. As you cross district borders you may need to invest in a vehicle or truck and a sales team. The thing is start small and see how the product performs and then make the necessary investments.
- Marketing & Sales. As you distribute your product you need to convince people to try out your product. This is where marketing comes in. The product you made had a specific benefit or problem it was meant to solve. It was also unique and stood out from the crowd. It was also made for a specific customer in mind. Marketing is about finding the right customer, reminding them of their need or problem and demonstrating how your product is the right fit. You then convince them to try your product. If your product fulfills the promise you made they will buy again and refer their friends. There are many marketing channels you can use including word of mouth, product activations, point of sale displays, TV and radio adverts, social media adverts, influencer marketing, etc. The right channel to use is where your target customer spends most of their time.
- Financing. Unfortunately you need money to make more money. The question is where is the money? The thing is, the money is there. What is lacking is well packaged business proposals and ventures. Most of the small ventures are disorganized, informal, and lack structures. So if you want to scale and attract funding from friends, family, banks, venture capitalists, grants, incubators, etc. you have to be really organised and formally structured. You have to incorporate a company, set up a bank account, keep proper books of accounts, pay taxes, maintain proper records, etc. If you do this consistently for at least 2 to 3 years you will be able to walk into a bank and get a loan to expand your business.
- Product certification. To gain market acceptance and prevent heavy fines you will need to certify your products with UNBS. This process may take you some time and money but it is critical to protect your business.
- Scaling up. At some point the cottage business may outgrow your home. You will then need to find a bigger space, acquire some machinery, and hire some more people. You will also need to develop more products to reach a wider audience. You may have to partner with other like minded people as you scale. This is perhaps the hardest part of the journey so far and you are going to face many challenges. Good people will resign, machines will break down, your markets may disappear, you will run out of money, you will burn out and be stressed, etc. But take comfort. Nothing worthwhile comes easy. These are simply growing pains which are part and parcel of the creation process.
- Sustaining the business. As the business matures you will need to build systems, manage your cash flows, and build a team to grow the business. You will have to invest in a good management team which can sustain the business. The business will have to keep innovating with new products to stay ahead of the competition and wow new customers. Long term partnerships with financiers, distributors and suppliers will have to be implemented.
Starting a cottage business from home takes a lot of courage and faith. It’s like planting a seed. The seed attracts all the nutrients it requires and grows into a large tree. Same thing with your cottage business. Starting your cottage business may change the trajectory of your family and break the curse of poverty in your family tree. Hopefully your little cottage business will stand the test of time and employ your children and grand children in the decades to come.