According to Scott Clark in the Houston Business Journal, home-based businesses create more than 8,000 new jobs each day.
They also generate nearly $400 billion in annual revenues.
In fact, such well-known companies as Amway, Ben and Jerry’s, Domino’s Pizza, Estee Lauder, Hallmark and Nike all started as home-based businesses.
Once viewed as a way for an unemployed person to make some money until a “real” job came along, home-based businesses are now taken much more seriously.
Computers and technology
The main driving force behind the growth of home-based businesses is the increasing capability and availability of computer and communications technology.
Powerful yet affordable home computer systems equipped with modems allow people to send and receive messages, transfer data and conduct research from their homes.
This largely eliminates the need to commute to a place of employment.
Similarly,there are sophisticated software programs offering applications in desktop publishing, database management, financial management and word processing.
This enables one individual to do the work formerly handled by an entire support staff.
In addition there is the widespread use of cellular phones, pagers, voice mail systems and toll free telephone numbers.
This has enhanced the ability of home-based business owners to remain connected to the outside business world.
In all, rapid improvements in technology have enabled large numbers of home-based business people to earn the same income they could at a regular jobs while also gaining a number of life-style benefits.
Transformation of economy
Another important factor in the growth of home-based businesses is the transformation of the American economy from a product orientation to a service orientation.
Since service businesses generally have no need to store inventory or run production machinery, they are less disruptive and more adaptable to a neighborhood environment.
As a result of these and other factors, an estimated 40 million Americans now work from their homes.
Not surprisingly, two-thirds of home-based business owners are women.
They choose this option either because of child care concerns or because of a perceived glass ceiling limiting their earnings potential in the corporate world.
A home-based business may be related to an individual’s previous occupation.
However,it may also be based upon a hobby or the discovery of a unique business opportunity.
In any case, the idea should be evaluated with an eye toward market potential and competition
Successful home-based business owners are usually good at what they do and enjoy doing it.
It is also helpful to be independent, self-sufficient, and flexible.
Other keys to success include being able to sell oneself and the business, and staying on top of personal and business finances.
Since it is often difficult to associate being at home with working, home-based business people must be able to maintain boundaries between their personal and professional lives.
In addition, they require a great deal of self-discipline to overcome the sense of isolation, frequent distractions and lack of motivation and concentration that commonly affect those working from home.
Failure rate of home-based businesses
According to the editors of Income Opportunities magazine in their Home Business Handbook, only 20 to 25 percent of home-based businesses fail within five years.
Compare this to a failure rate of over 50 percent for all small business ventures.
Furthermore, the initial cost of starting a home-based business is a mere fraction of the cost involved in starting a storefront or a franchise.
Several organizations are available to assist people in forming home-based businesses:
This includes the National Association of Home-Based Businesses-( www.ameribiz.com )
Home Office Association of America- (www.hoaa.com )
National Association for the Self-Employed ( www.nase.org ).
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