Recession Feeds Increase of Home-based Businesses
BY Lauren Folino
More than half of all businesses in the United States are now home based.
Running a business from home has never been easier – technologically, at least. Fax machines, the Internet, and smart phones have seen to that. So not surprisingly, a new study revealed that homepreneurs are becoming "an underlying long-term trend" that has been facilitated by the recession.
The study, entitled Homepreneurs: A Vital Economic Force, found that there are 6.6 million home-based businesses in the United States, employing more than 13 million people nationwide in 2008. Conversely, venture-funded companies employed only 12.1 million Americans in 2008, according to the National Venture Capital Association. They also found that only about 35 percent of home-based businesses see annual revenues of more than $125,000, compared to 75 percent of other businesses.
The analysis, which examined statistics from the Small Business Administration, the U.S. Census, data from the Small Business Success Index, and a survey of 1,500 small businesses, was completed by Lafayette, California-based Emergent Research and co-sponsored by Herndon, Virginia-based web-marketing firm Network Solutions, and the University of Maryland's Robert H. Smith School of Business.
Emergent Research had a personal interest in researching the rise of home-based businesses; the firm is a home-based small business itself whose sole employees are Steve King, and his wife and managing partner, Carolyn Ockels. "Our primary mission in life is to study the small business sector of the U.S. and global economy, and we identify, analyze, track and forecast trends and shifts impacting small businesses," King explained.
King said he thought that the data would surprise people in terms of the overall size of the sector, and how important it is to the U.S. economy. "A lot of trends have come together that have made it very acceptable to have a home-based business," he said. "[You've] got the technology, the legitimacy, and the fundamental fact that it's cheaper. Then you've got the lifestyle advantages."
Deborah Mayer, president, founder and sole employee of Manhattan-based escorted shopping tours company, Shop Around Tours, is one entrepreneur who is enjoying the perks of owning a home-based business. "You don't have to put on a suit and go to work every day in somebody's office," she said, explaining why people should consider starting a business from home. "[And you save on] transportation costs and work clothes. When you work from home, all of that goes out the window."
Shop Around Tours, which began operations in 2001, takes fashionistas on a variety of guided tours through Italy's finest cities, wineries, and notably, designer outlets. One of the biggest difficulties she faces owning a home-based business, Mayer revealed, is learning when to stop working. "It's hard sometimes because you own the business and part of you feels like you want to be available to people 24/7. When I'm on the tour I am available 24/7, but at home it should different. That's difficult."