By Rieva Lesonsky
Do you remember when “home-based business” was a term you had to define? When the idea of working from home was foreign to most people and entrepreneurs who did so were viewed with suspicion?
I do, and that’s why I’m so fascinated by the latest data from The U.S. Census Bureau about home-based business ownership. The Census Bureau’s 2007 Survey of Business Owners found, among other things:
Home-based businesses dominate: More than half (51.6 percent) of all businesses that responded to the survey were operated primarily from someone’s home.
Home-based businesses have small sales: Just 6.9 percent of home-based businesses that responded to the survey had $250,000 or more in annual receipts. In contrast, more than half (57.1 percent) of home-based businesses had annual sales of less than $25,000. Unfortunately, the Census doesn’t ask questions like whether these business owners have small sales because they don’t wish to grow any bigger, or whether they’re struggling to grow. I’d be curious to know.
Home-based businesses are employers: Nearly one-fourth (23.8 percent) of home-based businesses responding to the survey had employees. Although the majority (62.9 percent) did not, that’s still a surprisingly large number who are employers. This not only goes against the conventional wisdom that home-based entrepreneurs are soloists, but is also further evidence of home-based business’s acceptance.
Home-based business owners are more likely to be women: Businesses owned by women or by men and women were more likely to be home-based (58.2 percent and 58.1 percent, respectively). Slightly less than half of businesses owned by men (49.1 percent) were home-based.
Home-based business owners are less likely to be minorities: Most nonminority-owned businesses (54.4 percent) and businesses with both minority and nonminority owners (56.0 percent) were home-based. Among minorities, however, just 46.5 percent of firms were home-based.
As these statistics show, home-based business is no longer a rarity but a fact of life. In fact, I’m willing to bet it’s grown even more in the wake of the recession. I’d be interested to see current statistics to learn how many of the new entrepreneurs and “solopreneurs” created by the 2008 recession are running their businesses from home.
If you’re a home-based business owner, do these figures jibe with your own experience?
Image by Flickr user James Thompson (Creative Commons)
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