Starting a Referral Network

Interview with Debra Cohen, Founder of Home Remedies of NY

Some of the best businesses come from creating a service you need yourself. Debra Cohen created a home referral network after having trouble finding a contractor to work on her home. Today, Home Remedies is in over 400 markets.

Debra Cohen founded Home Remedies of NY in her home in 1997.

Tell me about your current business. What are you doing exactly?

Home Remedies of NY is a Homeowner Referral Network (HRN) for local homeowners seeking reliable home improvement contractors. To start, I pre-screened a network of more than 50 contractors ranging from painters, plumbers and carpenters to general contractors, architects and decorative painters. Contractors in the network agreed to pay a pre-negotiated commission on any work I secured for them which meant that the referral service would be free to homeowners.

My HRN business is like a personal concierge service for the home and fills two important niches in the home improvement marketplace: 1) it serves as a reliable source for homeowners looking for reputable contractors, and 2) it's an outsourced sales and marketing force for pre-screened contractors.

What were you doing before Home Remedies?

Before I launched Home Remedies I was the Vice President of a Spanish language aviation magazine based in NYC. It was a very glamorous career. I traveled worldwide. This is the first business I ever launched on my own.

What advice would you give to somebody else who wanted to start a similar business?

Evaluate what your strengths are and what you're willing to invest financially and personally. My Homeowner Referral Network (HRN) business capitalizes on what I love--networking, helping people, home improvements--and it allows me a flexible schedule so that I can be at home to raise my children.

How did you come up with your business idea?

My husband and I had just purchased our first house and we were struggling to find reliable home improvement contractors. When we finally found a responsible contractor, I felt compelled to share his name with other homeowners, neighbors and friends. I decided that if we were having this problem, then other homeowners must also face the same challenge and decided to try and create a service that would fill this need. After months of research and planning, I took a $5,000 loan against my husband's retirement savings plan and launched Home Remedies from my basement with a refurbished fax machine, computer and phone.

Did you operate your business from your home? What were the challenges and benefits to this strategy?

Yes and I still do. It allows me the flexibility of raising my family and working at the same time however sometimes work and family worlds collide. The key to operating your business from home is to define your work hours and create blocks of time for your day so that you're not pulled in too many directions at once. There are a lot more distractions at home than in a traditional office, so it requires discipline to stay focused.

Have you outsourced any portion of your business? Has that worked for your business?

Yes. In the beginning I tried to handle everything on my own but as my business grew, I realized that outsourcing certain responsibilities would allow me more time to focus on the most important aspects of my business. I have since hired a virtual assistant, a webmaster, a graphic artist and an accountant. The key is to outsource the jobs that aren't your areas of expertise and focus on what you're good at.

What have you done that has been very effective in helping to grow the business?

After my first year in business I had more job inquiries than I could handle. Rather than trying to expand my business too quickly, I decided to duplicate my business model and created a Business In A Box so that other entrepreneurs could launch HRN's like mine in their communities. I started out by setting up a few HRN's in neighboring markets and referring work to them. When that worked out, I decided to market my HRN business nationally.

There are now more than 400 operating in markets nationwide.

Wow! It sounds like you've built a very successful business. Thank you for taking the time to share your business experiences with our readers.

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