Small Business Economy 2004 - Home Based Businesses

Several readers sent me links to the new report issued by the U.S. Small Business Administration's Office of Advocacy: The Small Business Economy 2004. [Thank you Doug the Infoman, Steve, and Marge.]



Some of the other blogs have addressed it, too -- including Kirsten at reinvention and Jeff Cornwall at The Entrepreneurial Mind.



As Kirsten points out, the report supports that home-based businesses are a significant trend in the U.S.



Home-based businesses make up 53% of the small business population in the United States. They serve as incubators for growing businesses.



And what lower-risk way could there be to bootstrap a new business? Starting a business from home keeps overhead and startup costs low.



Yet, many segments of our society have a poor perception of home-based businesses.



As Jeff points out, some people "try to dismiss self-employment by ignoring its impact on overall employment and trying to cast it as some form of economic desperation. Rather, it is American self-reliance at its best."



Then, as I wrote here last month in the comments section, there is the bad rap that home businesses have gotten. In some circles "home-based business" is synonymous with shady get-rich-quick schemes. I've told the story about trying to send out an email newsletter referring to home-based businesses. My email newsletter program has a spam filtering test that helps me assess in advance whether the newsletter will get through. However much I tried, I could not get that article about home-based businesses to pass the spam test. In the end I gave up and removed the article from the newsletter.



Part of the perception issues can be traced to the lack of reliable information. More data is needed about home-based businesses.



Home-based businesses are tough to measure because they are under the radar screen of so many of the usual business measurements (incorporations, rental space, employees). Information about them tends to be fragmented and scattered around. And few organizations have had the incentive to collect information about the self-employed and home-based business owner.