Did you know that:
- There are more than 2.1 million home-based businesses in
the UK, out of a total of 4.5 million small and medium-sized
- Home-based businesses have a combined turnover of over
- Over 60% of new businesses are started at home?
These are amongst the findings in a a new Home Business
Report compiled by Enterprise Nation with support from
BT. And as headlines they show the value of home-based
business to the economy.
The report uncovers growth in the number of home businesses -
a 2.9% increase from 2005 to 2006. 1,400 new businesses
are started from home each week. The highest growth is
coming from mums, young people and the over 50s - so home
business, the report says, is a route to bringing people into
employment who otherwise might not have contributed to the
What kind of businesses are they? According to the
report, the fastest growing sectors for home businesses are in
the business and professional services sector (such as
accountants and website developers), onlinetrading (such as
eBay-ers), personal services (such as home interior designers,
hairdressers, party planners), food (products and caterers), and
domestic energy (including people selling excess DIY ‘green’
power back into the national grid).
So while hi-tech is part of the picture, it's not the whole
story. However, people starting up businesses in more
traditional fields are also becoming increasingly IT-savvy, and
many have websites and use e-commerce platforms to punch above
Growing the home business
Amongst home business entrepreneurs surveyed by Enterprise
Nation for the report, there is almost universal determination
to grow the business. But most do not see this as being
about increasing the number of their employees. 63% said they
would rather outsource projects and new work rather than
In many ways this ties in with the ethos of running a home
business, where people are seeking both to reduce overheads and
to have a way of life that provides a distinctive blending of
home and work life, rather than wanting to recreate a large
company on their doorstep.
Most home businesses, however, feel that there is a lack of
business support available for them. And as many business
grants from local or regional agencies focus on creating
employed jobs, government needs to look more broadly at ways to
Why work from home?
According to the report, there are 3 main reasons why people
choose to run a business from home:
- Savings - starting out at home saves money in
avoiding the cost of an extra office It also saves time. A
new business owner can gain up to 20 extra days per year
through giving up the daily commute. This is time that can
be spent on growing the business, rather than sitting in
- Technology – advances in technology mean that
almost any trade can now be carried out at home. Business
owners are developing their websites as a virtual window to
the world and utilising software to manage projects, work
with partners and develop new business.
- The work/life blend – people are heading home to
be close to family and friends. Starting and growing a
business from home is enabling thousands of families to be
together, work together and share the financial rewards.
Research for BT shows that ‘Flexibility/working the hours I
choose’ and ‘Better work/life balance’ were the two most
popular factors when business owners chose to start from
home, coming in at a higher ranking than ‘lower overhead
And with the growth in home-based businesses amongst the over
50s, it would seem that there may be evidence of more mature
workers wanting to realise their dream through running their own
business, rather than working towards retirement making money
for someone else. And in the context of an ageing society,
it would be interesting to know how many are planning to work
beyond normal retirement age.
Home business 10 point action plan
The Home Business Report proposes a 10 point
action plan that government should adopt to support and promote
home business. This involves:
gathering better data on the extent, needs
and performance of home business
designing new government policies and
programmes to support home based business, e.g. by looking
at how business expansion grants are applied
introducing tax relief for for home business
owners, recognising their social and environmental value
developing more local physical
infrastructure to support home businesses, e.g. funding
live/work developments and 'hub' facilities for home-based
There are similarities here to the
recommendations in the report Under the Radar, produced by the
Live/Work Network for the Commission for Rural Communities.
With this gathering weight of evidence, we will have to see how
government and local agencies respond.
Valuing home based business
Much of the attention on working from home focuses on
employees. Switching from the office to working from home
attracts attention as a dramatic change to working practices.
Yet two-thirds of the people working from home are
self-employed or running a home-based business. A new study,
The Home Business Report, puts the spotlight on
home-based enterprise and their value to the economy and
It sets out the facts, provides a regional breakdown,
presents a variety of case studies, and then tells the
government what it should be doing to support home enterprises.
You can download the report from the Enterprise nation website.