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When Your Small Business Grows, Should You Move it Out of Your Home? Millions of Biz Owners Say No

According to the SBA, there are over 15 million home-based businesses in the U.S.  And based on analysis of data from the Network Solutions Small Business Success Index (SBSI) and the SBA, around 6.6 million of these are serious home businesses providing at least half of their owner’s household income.

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 [1] 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:

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 [2].