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DEPARTMENTS: Home Front
By Charmaine Crouse Yoest
Charmaine Yoest: Moms lead a home/work revolution
Wendelyn Martz has lived on both sides of the mommy
wars. An urban planner in Upper Marlboro, Maryland, she had always intended to pursue her
career. She took a leave of three months after the birth of her son; five weeks after her
daughter was born, she raced back to work to finish a high-profile project.
Slowly she began to burn out. Her husband was
working long hours, so all the duties at home landed upon her shoulders. Something had to
give. "I thought, 'This is not right. I'm cheating someone and I'm probably cheating
everyone,' " she says. "I needed to be home." Finally she resigned.
Nevertheless, she loved her work and wanted to
continue her professional interests. "I need work outside of my family," she
says. "My whole world cannot be successfully reduced to just taking care of my
children. I'm trying to find that middle ground."
A few years ago, Martz and a partner started a
home-based business designing and marketing greeting cards. Sales took off, her husband
began providing his marketing expertise, and today her Pathway Art can be found in every
corner of the country, from the Borders Books chain to the John F. Kennedy Center for the
Performing Arts, in Washington, D.C. Her son, age six, even helps assemble orders and
offers editorial comment on new designs.
Martz's story is becoming increasingly familiar. A
growing number of career women are leaving established companies to start their own. Aided
by the tools of the Information Revolution--computers, modems, and fax machine--many women
with young children are becoming entrepreneurs by establishing home-based businesses.
According to the National Foundation for Women
Business Owners, U.S. women own 3.5 million home-based businesses. Additionally, they
provide full-time or part-time employment for an estimated 14 million people. Martz and
her peers are joining an impressive group: Mrs. Field's Cookies, Esté Lauder Cosmetics,
Lane Bryant, Stairmaster, even Steinway pianos, all started as home-based businesses. Kim
Hackett, the executive director of the Women's Home Business Network, says that
information and computer-based businesses such as desktop publishing, graphic design,
free-lance writing, and consulting are among the most successful such businesses. But
women are finding that their skills as lawyers, accountants, real-estate agents, and
public-relations professionals also translate well to businesses based at home.
What's driving this wave of women entrepreneurs? For
the first time in our history, the majority of babies less than a year old have mothers in
the paid work force. In fact, the fastest-growing segment of mothers in the work force are
precisely the ones with the greatest child-care responsibilities--those with children
under six years of age. Since 1960, these mothers have tripled their work force
participation.
The efforts of women to juggle babies and briefcases
exact a stiff price: A recent issue of Parents magazine concluded that, among
mothers, "emotional conflict is epidemic." In a startling reader survey of
18,000 women, the magazine discovered that only 4 percent of respondents would choose
full-time employment if they could do "whatever they wished."
What do women really want? Most want flexibility: 61
percent of the women said they would choose part-time work if they could. Similarly, a
1995 poll of 3,000 women done by Roper Starch found that 43 percent of employed women with
children would prefer to stay home. Another poll found that 87 percent of women want to
spend more time caring for their children.
Meanwhile, the discussion of women and workplace
issues in the women's movement and in the public-policy realm remains focused on the
"glass ceiling." Women call for flexibility in employment and more time with
their children while the public debate centers on day care. Even the Republican-dominated
National Governors' Association favors more federal spending on day care.
But the real working woman appears to be voting with
her feet. According to Fortune magazine, "The generation of women that blazed
new trails into the corporate suites is, evidently, blazing its own trails out." In
1995, Fortune surveyed three hundred executive women and found that 87 percent said
they had made or were considering making a major change in their lives.
Home-grown entrepreneurship offers many women a way
to honor their commitment to family while pursuing professional challenges. This
entrepreneurial spirit has allowed some women to regain control of their lives; home-based
work supplies the flexibility missing in the formal workplace. Technology and the economic
dynamism of the 21st century will make home businesses a more attractive option for
millions of American women.
The Taxman Cometh
Public policy threatens to stifle the vigor and
creativity of the small home-based entrepreneur. "Consider the tax code," says
Dianne Floyd Sutton, of the National Association for the Self-Employed. "It stands
like King Canute, commanding the waves of modernization to recede."
The IRS
greets the home-based worker with downright hostility and discrimination. Start with the
home-office deduction. At the first national conference on home-based business, in 1994,
an IRS representative commented in a workshop that "everyone who took a home-office
deduction in 1993 is red-flagged for an audit." Here's the problem: To deduct the
expenses of a home office, tax expert J.K. Lasser explains, you "must be able to
prove that you use the home area exclusively and on a regular basis" for one of two
reasons--either as a place of business to meet with customers in the normal course of your
business, or as your "principal place of business."
The IRS interpretation of this law has been
exceptionally stringent. Lasser points out that one woman who ran a roadside stand selling
home-prepared items a mile from her home was not allowed to deduct her home-office
expenses, because the IRS ruled that the stand was her principal place of business. In a
similar case, a challenge to that interpretation reached the U.S. Supreme Court. In 1993,
the Court ruled that a deduction is not allowable when the home office is used only for
administrative purposes and not for seeing customers.
This ruling hits women especially hard. In a hearing
before the Small Business Committee of the U.S. House of Representatives, Beverley
Williams, the president of the American Association of
Home-Based Businesses, testified that not allowing deductions for business owners who
conduct business outside their home offices raises a safety issue. "Many women choose
. . . to not receive their clients who are strangers into their homes," Williams
said. "They should not be asked to compromise their safety or perception of safety
for the sake of business deductions that other small businesses enjoy."
Other legal minutiae can bog down home-grown
businesses:
- The "exclusive use" clause raises a hurdle for people caring for dependents,
such as mothers with young children. An IRS auditor who found a diaper-changing table in a
home office, for example, might disallow the deduction.
- Home-based businesses are caught between local zoning laws and IRS rules. Zoning laws
sometimes preclude home-based business owners from meeting clients in their offices,
thereby jeopardizing their deductions. But business owners who rent offices outside their
home have no difficulty deducting these office expenses, even if they, too, always meet
clients elsewhere. What justifies the disparity?
- IRS rules are murky in defining when a home-based business can claim "independent
contractor" status. Senator Don Nickles
of Oklahoma laments, "This distinction is determined by an arbitrary 20-part Internal
Revenue Service common-law test. This inconsistent method has been the bane of small
business owners who often face bankrupting penalties and taxation despite good-faith
efforts to properly classify employees for tax purposes."
Over the last seven years, the IRS has reclassified 439,000 independent
contractors as employees and collected more than $750 million in fines. Nickles and
Senator Christopher Bond of Missouri
have introduced the Independent
Contractor Simplification Act of 1996 to reform tax rules in favor of home businesses.
Representative Jon Christensen,
a Republican from Nebraska, has introduced a similar bill in the House,
collecting more than 200 cosponsors.
- Health-insurance costs are only partially deductible for home businesses. Author Paul
Edwards, an expert in home-based businesses, points out that corporations may deduct 100
percent of health-care costs for their employees. Moreover, the health-care benefits are
not counted as taxable income for the employees. But home-based firms can deduct only 30
percent of their health-care costs. President Clinton recently signed a bill increasing
this deduction by 5 percent a year--but the increase will top out at 50 percent,
maintaining the bias against home-based businesses.
Resources
The National Foundation for Women Business Owners
(NFWBO). A clearinghouse for information on women-owned businesses; publishes a
newsletter on women's business issues, conducts seminars, issues research reports, and
facilitates networking. Contact Sharon G. Hadary, the executive director, or Julie R.
Weeks, the director of research, at 1100 Wayne Avenue, Suite 830, Silver Spring, Md.
20910-5603. Tel.: 301-495-4975, fax: 301-495-4979, e-mail: 73564.3214@compuserve.com.
American Woman's Economic Development Corp.
(AWED). A membership organization that provides training programs, networking
seminars, business counseling, and technical assistance for women in business. Write to 71
Vanderbilt Avenue, Suite 320, New York, N.Y. 10169. Tel.: 1-800-222-AWED.
American Association of Home-Based Businesses.
A membership organization supporting home-based businesses across the nation. Offers
discounted long-distance service, legal services, and travel, and serves as a
public-policy advocate in Washington. Contact Beverley Williams, the president and
founder, at P.O. Box 10023, Rockville, Md. 20849-0023. Tel.: 1-800-447-9710, fax:
301-963-7042, Internet: http://www.aahbb.org
National Association for the Self-Employed. A
membership organization with great information, an excellent newsletter, and aggressive
advocacy on Capitol Hill. Contact Jim Morrison at 1023 15th Street N.W., Suite 1200,
Washington, D.C. 20005. Tel.: 202-466-2100.
Working From Home: Everything You Need to Know
About Living and Working Under the Same Roof, by Paul and Sarah Edwards
(Tarcher/Putnam). This book has everything from the intricacies of zoning regulations to
avoiding the siren song of the refrigerator. The authors also manage an interactive,
on-line forum called "Working From Home" on CompuServe (under the
"Professional" icon); America Online also has a forum (under the "Clubs and
Interests" icon).
Charmaine Crouse Yoest is a contributing editor of Policy Review: The Journal of
American Citizenship and the co-author of Mother in the Middle: Searching for Peace in
the Mommy Wars (HarperCollins/Zondervan).
Making a Home Business Work
1. Keep regular hours. First, your own productivity will benefit from maintaining
structure in your life. Second, it helps if your customers, clients, and colleagues know
when they can regularly reach you. (And third: some people will need to limit their work.)
2. Hire a baby sitter. Main benefit to being home: being with your kids. Big obstacle
to productivity: being with your kids. It can be done without a baby sitter and, after
all, the point is to see them more than you would working away from home. But most people
should plan to use some kind of baby-sitting. A home-based career offers lots of creative
opportunities: Some moms have arranged baby-sitting co-ops in their communities. Many
churches have pre-school or "mom's mornings out" programs.
3. Be professional. There's nothing like trading the perks of an office and an expense
account for baby spit-up and dirty dishes to undermine a professional attitude. And our
society sends not-so-subtle messages that moms and home are not cutting edge. Don't buy
it. A professional image is critical and begins with inner confidence. Authors Paul and
Sarah Edwards say that "being taken seriously" is the one of biggest challenges
for home-based workers. The antidote is careful professionalism.
4. Network, network, network. Other challenges for the home-based worker are marketing,
becoming out-of-touch, and personal isolation. These are disparate problems; the answer to
all three is the same: use networking to help identify your home-based business or job . .
. and then don't stop. Keep in touch with former colleagues. Drop notes. Do lunch. One
mother who downshifted her career began giving dinner parties to maintain contacts; she's
still in the loop and in demand.
5. Measure twice, cut once. One size does not fit all when it comes to work/family
arrangements. Home-based businesses are not for everyone: it's wise to "count the
cost" before beginning. Run with your talents, and recognize your limit ations; if
you are a people person who needs structure, a home-based situation might not be for you.
And, although professions such as desktop publishing are suited to home-based operations,
others are not.
It is tempting to whitewash the sacrifices involved in switching gears in your career,
but there are no easy answers to the work/family dilemma. Facing that reality squarely
raises your chances of success by allowing you to focus on the rich rewards of working at
home, rather than on the opportunities left behind.
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