The current economic climate is acting as a spur for thousands of people to become their own boss and to start up and run their own business from home, according to a new report by Enterprise Nation and BT.
The 2008 Home Business Report, launched as part of Small Business Week 2008, highlights a 16 per cent rise over the last year in the number of businesses being run from home. There are now more than 2.5 million home businesses, accounting for more than half (53 per cent) of the 4.7 million small and medium sized enterprises in the UK.
Home-based businesses are also bucking the trend when it comes to confidence in their prospects during the financial crisis. They are buoyantly optimistic about beating the adverse economic conditions, with 72 per cent planning to win new customers over the next six months, two thirds (66 per cent) planning to increase turnover and more than half (58 per cent) developing new products and services.
The greatest concentration of home businesses in the UK is in London, the East of England and the South East. London also leads the way with the greatest number of home business start-ups over the last year, followed by Leicester, Nottingham, Bristol and Coventry.
The report also shows an increase in spare time start-ups, with a third of people (33 per cent) running a home business in their free time. This thriving 5pm-9am economy offers would-be entrepreneurs a low-risk route to starting their own business.
The freedom to make their own decisions is the most popular reason (33 per cent) why home-based business people enjoy being their own boss, closely followed by the benefits of a better work/life balance (24 per cent).
The use of technology is a critical factor in the start up and growth of home businesses - a view held by 82 per cent of business owners, with more than half of them (52 per cent) spending between £500 to £1,000 on Information Technology each year.
Home business owners view their spending on technology as a valuable return on investment as it helps to keep their costs low and their sales and productivity high.
Home business owners view their spending on technology as a valuable return on investment as it helps to keep their costs low and their sales and productivity high.
Bill Murphy, managing director of BT Business, said: “BT is right at the heart of the UK small business community. We will continue to work closely with Development Agencies and business organisations; offering expertise, advice and services, which allow home businesses to concentrate on what they do best, whilst we focus on taking care of the technology that underpins their ability to compete and grow.”
Unsurprisingly 93 per cent of home-based businesses use broadband. When it comes to websites, home businesses see their window to the world as a tool that helps them to attract new customers (46 per cent) and market themselves better (39 per cent). But it is also seen as the ultimate leveller. With a quality web site, a home business can compete on a truly global scale, making them look bigger than they are (43 per cent).
Emma Jones, founder of Enterprise Nation, itself a home-based business, said: “More home business means more dynamism in the economy, less traffic on the roads and tighter social cohesion as parents stay home to run a business and the household."
This year’s report calls for action to encourage home businesses, including asking the government to look at the economic, environmental and social benefits of homeworking, asking Regional Development Agencies to include home business targets in Regional Economic Strategies, calling for changes to the planning system and on Local Authorities to invest in home business hubs and networking facilities and to give out clear information about planning permission and business rates.”
*A range of initiatives are being launched during Small Business Week to help small businesses survive in today’s climate and plan for the future. These include a region-by-region mentoring directory, detailing programmes available across the UK and guidance on how to access them, and a series of webinars, events, clinics and guides. Full details of the week are available at: www.sbw08.co.uk.
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