More than half of all U.S. businesses are home-based. These firms are often dismissed as hobbies or part-time ventures with limited economic impact.
But our research shows otherwise. We estimate that about 6.6 million home-based enterprises provide at least half of their owners’ household income and together employ more than one in 10 private-sector workers.
The rise of the homepreneur is a long-term trend that will continue to accelerate over the next decade. Fueled by technology and enabled by low costs, businesses of all kinds are finding there is no place like home.
With a troubled but recovering economy as the back drop, here is our list of the Top 10 Homepreneur Trends for 2010.
1. The Job-Challenged Economy: Despite clear signs of economic recovery, job growth and traditional employment options will be limited in 2010. Employers will continue to be concerned about the economy, focused on costs and timid about hiring. Because of high unemployment and the lack of jobs, many will turn to self-employment and home-based businesses in 2010.
2. Bootstrapping: Bootstrapping was one of the most popular business terms in 2009, and 2010 will see continued small business focus on cost containment and cash flow. The obvious cost advantages of being home-based is leading to more small businesses – including employer businesses and high-tech start-ups – choosing to be home-based.
3. The Home-Based Artisan: Most think of home businesses as knowledge, commercial or office businesses. But a new do-it-yourself movement of crafters, digital tinkerers, green advocates and other “Makers” are using their garages, basements and backyards as their factories. These new artisans are combining digital technology and tools with traditional methods to create innovative products, processes and business models.
4. Cloud Computing: Cloud computing has been on our top small business trends list for several years, and its importance for home businesses continues to grow. Cloud-based IT services: (1) provide access to advanced computing capabilities on a variable cost basis; (2) reduce the need for IT infrastructure and support; (3) enable mobile computing, provide back-up and security services; and (4) improve collaboration with employees and customers. Simply put, the Cloud is a key driver of the shift towards home businesses.
5. Mobile Computing: Most home businesses are mobile with customers, suppliers, partners and employees located elsewhere. The growth of mobile computing provides home-based businesses with the tools needed to operate and manage a distributed business. 2010 will see more home businesses take advantage of smartphones, netbooks, location-based Internet services and other mobile services.
6. Social Computing: No trends list for 2010 would be complete without mentioning the growing importance of social computing. Facebook, LinkedIn, Twitter, blogs and other tools for collaborating with others and sharing information are changing business and society. Because social computing systems are generally cheap and easy to use, home businesses can effectively leverage these tools to amplify their business impact.
7. Analytics: Sophisticated yet easy-to-use tools are allowing home businesses to move beyond “gut level” decision making to data and information-based management. Online marketing tools in particular allow home businesses to develop sophisticated marketing programs once only available to large corporations. Analytical tools, often available through the Cloud, allow home businesses to successfully compete in a growing range of industries.
Social and Demographic Trends
8. The New Local Movement: New localism is a trend that has been in place for years. Driven by changing demographics, technology, rising energy prices and concerns about the environment, Americans are increasingly focusing on their families, friends and communities. Home businesses tap into this trend in two ways. Home businesses allow greater community focus for the owner, and benefit from market opportunities created by locally-oriented customers.
9. Boomers: Aging baby boomers are flocking to home-based businesses. Flexibility, interest in pursuing a new career or passion, and the opportunity for improved work/life balance all contribute to the growing boomer interest in home businesses. In some cases financial flexibility provide boomers with the ability to start a home business. For others, financial need drives the decision.
10. Work/life Balance: Interest in work/life balance is growing across almost all demographic segments. The Great Recession has increased the interest in work/life balance as more people focus on non-economic life issues. Surveys and other research show women, boomers and Gen Y in particular stress the importance of finding balance. Homepreneurs often cite work/life balance as one of the key benefits of home businesses. As this news spreads, so does the interest in home-based businesses.
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About Steve King: Steve is a partner at Emergent Research, a Senior Research Fellow at the Society for New Communications Research and a member of the Small Business Trends Expert panel. He blogs about small business at Small Biz Labs.