Employees thinking of starting their own business from their kitchen or bedroom but have misgivings about the wisdom of their plan may get the push they need from two fronts: proponents of home businesses and the latest market research. Both indicate a long-term uptrend that will continue to accelerate in the coming years. In short: home-based business are here to stay, and grow.
“Over the next 20 to 30 years, you could see the percentage of people who are self-employed and home-based double, potentially,” says small-business blogger Steve King. He bases his prediction on new developments that favor the home business segment, mainly having to deal with technological advances, low operating costs, and the outsourcing of business functions by large companies to overseas providers.
There is also the changing perception about home-based entrepreneurs. Once dismissed as amateur hobbyists and part-time crafters — given “a kind of second-class citizenship in the small business world,” according to business journalist Carol Tice — “homepreneurs” are now being recognized as legitimate business practitioners.
This is due largely to trends that are making home enterprises acceptable, says King. “[You’ve] got the technology, the legitimacy, and the fundamental fact that it’s cheaper.”
Home Businesses as Economy Drivers
Two reports released last year reinforce the view that home businesses are serious and viable sources of alternative income for workers, with a crucial role to play in economic growth.
“Homepreneurs: A Vital Economic Force” was published Emergent Research, a home-based research and consulting firm in Lafayette, California, that is run by King and his wife, Carolyn Ockels.
Among the report’s findings: Homepreneurs in the United States comprise a seldom recognized economic force that numbers about 6.6 million businesses. They account for some 34% of all small businesses that provide more than half of the owner’s household income. About 35% of these homepreneurs have annual revenues of more than $125,000, and 8%, more than $500,000.
“Home Business Report” was released by Enterprise Nation, a Web site for home businesses in the United Kingdom. Emma Jones, founder of Enterprise Nation, notes in the report that 2015 “has been a good year for home business” in the U.K. The number of people starting and growing a business from home rose to 2.8 million, an increase of 300,000 businesses over the past 12 months. These home-located entrepreneurs contribute a total of £284 billion to the annual UK economy, says the report.
U.S. Home Business Report Highlights
Here are more findings from “Homepreneurs: A Vital Economic Force.”
- Some 75% of homepreneurs report working full time in their home business.
- Homepreneur businesses employ over 13 million people, with an average of two employees (including the owner) per business.
- These businesses are typically well-established and long-lasting. Almost half of the homepreneurs surveyed had been in business for more than 15 years. Only 20% had been in business for less than five years.
- Homepreneur businesses are as competitive and successful as businesses located outside the home.
According to a news release from the U.S. Census Bureau, the top home businesses are engaged in the professional, scientific, technical, construction, retail trade, and other services (e.g., personal, and repair and maintenance services).
U.K. Home Business Report Highlights
The “Home Business Report,” on the other hand, shares these facts:
- The recession contributes to the increase in home businesses in the U.K.
- Most popular factors for starting a business from home are lower start-up costs, better work-life balance, and being close to the family.
- Home businesses are growing by outsourcing and subcontracting, as opposed to taking on staff.
- Technology remains a key enabler to starting and growing a business from home.
- Home businesses are early adopters of social networking sites to keep in touch with other businesses.
- The number of people holding down a day job and building a business at nights and weekends is increasing.
- The most significant growth areas are business services such as business consultancy, legal services, accountancy, architecture and design, training, and outsourced services, and consumer services such as arts and crafts, domestic repairs and services, beauty and wellness, tutoring, and caring.
Starting a Home Enterprise Today
Often shrugged off as sideline endeavors adding little to the family coffers or general economy, home businesses are slowly being accorded the respect that other kinds of small businesses enjoy. Latest statistics show that they are a growing industry that augments, if not completely provides, the income of households as well as contributes to economic prosperity.
For workers who wonder when might be the best time to join the home business market, now seems an opportune time to do so. The combination of technological advances, low operating costs, and increasing acceptance of this sector tilts the odds in favor of the aspiring home entrepreneur.