Just because you're paranoid doesn't mean they aren't out to get you. And just because a business trend has been hyped to death doesn't mean it isn't happening, maybe even faster than you imagine. Consider the much-heralded renaissance of home businesses.

Government numbers first. The U.S. Bureau of Labor Statistics counts about 10 million self-employed -- a number that hasn't changed much since 1990. In 1991 the agency did a special survey and found that about 5.5 million of those people worked at home. That estimate may be on the low side. Last year a survey by IDC/Link, a private research firm in New York City, found that nearly 13 million Americans were self-employed and working at home -- not counting those who did so on a part-time basis while holding a "regular" job.

What's most interesting about home businesses is their variety. Sure, there are plenty of consultants and computer programmers working at home. But crank up the economic microscope a little, and you find a wide range of occupations and industries represented. Here, for example, is what a multistate study of 900 home businesses and home workers, conducted by a team of university-based researchers, uncovered:

  • Of people working at home, roughly three-quarters ran their own business. Three years after the initial contact, most of those respondents were still running a home business, either the original one or a new one.
  • More than half the study's respondents were in marketing and sales (24%), contracting (15%), and mechanical work or transportation (13%). Professional and technical people accounted for only 12%.
  • Each category exhibited stunning diversity. The salespeople sold junk metals, dog food, wind-surfing gear, cutlery, T-shirts, sauna equipment, and a hundred other products and services. The mechanical businesses included a pipe-organ technician, an oil-well pumper, an installer of vacuum systems, a stagehand, an engine rebuilder, and a specialist in aquarium maintenance.

In spite of the home-enterprise frenzy, there are roadblocks. Consider, for example, bothersome zoning regulations, which have discouraged and even obstructed an uncounted number of would-be home entrepreneurs. The more home businesses there are, the more pressure arises to modify restrictive regulations. Possible sign of the future: the upscale subdivision Van Rancho, in suburban Chicago, is zoned residential in front and commercial in back. According to Governing magazine's Russ Freyman, activists all over the country are working to liberalize their own localities, in hopes of making them more like Van Rancho. Sounds like a phenomenon that, hyped or not, isn't likely to disappear very soon.

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The Murky World of Home-Based Business
Here are the government's counts of all self-employed workers, including home-based businesspeople, farmers, and others:

1992 10,017,000
1993 10,335,000
1994 10,648,000
1995 10,482,000

Source: Statistical Abstract of the United States: 1994, U.S. Bureau of the Census, Washington, D.C.; unpublished information, U.S. Bureau of Labor Statistics.

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Here are one private research firm's estimates of home-based workers:

"Primary" Part-time
self-employed self-employed
1994 12,700,000 12,700,000
1995 12,900,000 13,800,000

Source: IDC/Link

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And here are another's:

1994 14,200,000 (primary self-employed only)

Source: Find/SVP

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What do all those home-based workers do? Nobody's quite sure.

Top five occupations according to Find/SVP:

Business professionals 11%

Managers, directors 6%

Construction 6%

Sales 5%

Technical/programmers 5%

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Top five occupations according to nine-state "At Home Income Generation" study:

Marketing and sales 24%

Contracting 15%

Mechanical, transportation 13%

Services 12%

Professional, technical 12%

Sources: Find/SVP; Home-Based Employment and Family Life, Auburn House, Westport, Conn., 1995.

The typical proprietor of a home-based business:

Male 53%

Female 47%

Average age 42.9 years

College graduate 44%

Married 85%

With children under 18 54%

Household income $55,100

White-collar worker 46%

Blue-collar worker 22%

Other 32%

Source: Find/SVP

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How home-based businesspeople use technology:

Use a telephone answering device 77%

Use a calling card 68%

Own a PC 55%

Use call waiting 54%

Own a modem 47%

Use a cellular phone 26%

Own a pocket organizer 24%

Own a fax 23%

Use voice messaging 7%

Source: Find/SVP

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Research assistance for this article was provided by Mary Furash.