The home has long been viewed as a great place to start a business.  Lower costs are, of course, the key reason.  Many large enterprises such as Ford, HP and Apple Computer started as home businesses.

A recent SBA study of growth-oriented firms that began operations in 2004 shows that the home continues to be a great place to start.  About half of the growth oriented start-ups surveyed were home-based.  And almost all of these firms were still home-based 2 years later.

But the home is not just a great place to start a small business.  Data gleaned from the Small Business Success Index shows that homes can also be a great place to operate a business long term.  Data from the SBSI survey of home-based businesses that generate at least half of their owner’s household income shows:

• On average these firms have been home-based for almost 10 years.
• These home-based businesses score roughly the same as non home-based businesses in overall competitiveness.
• These home-based businesses score as well on access to capital.
• 35% of these home-based businesses generate more than $125,000 in revenue; 8% more than $500,000.

Just as lower costs are a key reason for starting a business at home, they are also an important reason many small business owners keep their business home-based.

With technology making it cheaper and easier to start and operate a home-based business – and traditional employment harder to find – we expect continued growth in the number of home-based business start-ups.

For more information on home-based businesses, see Homepreneurs: A Vital Economic Force.

Editor’s note: this article was originally published at the American Express OPEN Forum under the title:  The Home: A Great Place to Start and Run a Business, and is republished with permission.

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About the Author: Steve King is a partner at Emergent Research and a research affiliate at the Institute for the Future. He is a co-author of the Intuit Future of Small Business report series, and a Senior Fellow at the Society for New Communications Research. He blogs at Small Biz Labs.

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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.

Economic Trends

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.

Technology Trends

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.

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Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing your Competition is a synthesized compilation of the best of everything Guy has observed, done and written about entrepreneurship, start-ups and management. 

Reality Check is a great book title for these turbulent economic times.  I asked Guy about this and he said it was just luck that many months ago he picked this title.  But it is much more than luck.  Guy has always focused on the fundamentals of starting and running a business and creating value. 

Because of this, the book is full of concise and actionable advice on starting and operating a business in any economic climate.  The chapters on bootstrapping and financial projections are particularly relevant for the current down turn, as are the sections on marketing, selling and staying close to customers. 

The book covers much more than just Guy’s view on tech start-ups and investing in Silicon Valley.  The information is relevant to any organization regardless of size or industry.  Reality Check also contains useful and pragmatic advice on a wide range of work and career issues such as speaking in front a group, hiring and firing people, getting along with your boss and working with lawyers.

Reality Check has several must read chapters for people starting their careers or looking for jobs.  I wish I’d read “Nine Questions to Ask a Start-up” before I joined my first tech start-up.  I asked none of the nine questions and learned the hard way that I’d joined a struggling firm. 

I’ve already ordered a copy for my son, who is in college.  The combination of career advice and practical “how-to” information on working will nicely augment his academic studies.  I even agree with (but hope my son will miss) Guy’s suggestions that college students should “live off your parents as long as possible” and “extend college for at least 6 years.” 

Written in Guy’s entertaining and straight forward “no bull shiitake” style, Reality Check provides candid advice on starting and running organizations.  It is also an excellent reference source on a wide range of topics related to entrepreneurship.  My copy is already marked up and dog-eared and it is clearly a book I will refer to often.    

Reality Check (Portfolio) is available at Amazon.

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About the Author: Steve King is a partner at Emergent Research and a research affiliate at the Institute for the Future. He is a co-author of the Intuit Future of Small Business report series, and a Senior Fellow at the Society for New Communications Research. He blogs at Small Biz Labs.

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