Rise of the Home Based Business

By Sharon • November 10th, 2009

Home based businesses aren’t new but what they contribute to the economy is becoming top news. Together, the 6.6 million home based businesses in the U.S. employ one in 10 private sector workers and provide at least half of their owners’ household income. These findings and more are part of a report on home based businesses recently published by Emergent Research.

So can hard working employees and professionals replace their incomes with full-time home businesses? That bit of information is a little less encouraging…for some. According to the research only about 35% of home based businesses have revenue above $125,000, whereas 75% entrepreneurs doing business in commercial settings generate revenue over that amount.

Given the emotional and financial roller coaster we’ve been on during this recession I’d wager a bet that higher income earners are looking at their $100K plus salaries with a little less certainty than they once did. The fact that a home based business may offer less income in the early years is becoming less and less of a determining factor for the employee-would-be-entrepreneur.

Throw in the huge and affordable marketing potential of the Internet and the drop in initial earnings for the new home based small business owner is even less important. Businessweek recently did a story on the “homepreneur” trend and interviewed former programmer and now home-based business owner Stephen Labuda.

Like many savvy business owners Stephen started his business on the side back in 2003 while he was employed as a full-time programmer. He took his own business full-time three years later in 2006. Today his home based web development firm is generating revenue in the millions and he now employs people who work from their own remote locations.

In a previous post I spoke about U.S. Labor Department reports indicating a huge labor shortage in our future and the role that small businesses are likely going to play in helping large U.S. companies to remain competitive. Companies won’t be able to hire all the expertise they’ll need so they’ll be looking to outsource and small businesses will have the skills and innovation they need.

As smart people with a lot of experience from downsized corporate America begin to launch low-debt small businesses in their homes, we will, as a nation, begin to build a foundation for business innovation and success that’s not rooted in huge capital but rather in knowledge and people. That’s a sustainable combination from my perspective.

If you’re in the small business planning stages or currently running your home based business, one of the best things you can do (if you haven’t already done so) is connect with a mastermind group of fellow home based entrepreneurs. I repeat this advice in as many posts as possible because you really can’t achieve full potential in a vacuum. Asking questions of others who have already done what you’re attempting to do and succeeding at it, is one of the best things you can do to ensure the success of your company.

The Internet is all about connection and smoothing learning curves through collaboration and online learning. It really is an exciting and pivotal time to start a business. In the spirit of connection, I’d love to know – what’s your business interest and passion?

To your success!

Sharon