“Opportunity does not knock, it presents itself when you beat down the door.” – Kyle Chandler
What is the Home Based Business Industry?
An entrepreneurial business is mainly operated from home, mostly by the business owner himself. Some people refer to it as micro enterprises, working online, or small businesses. A small or micro business may not necessarily be a home based business.
It is important for the development of our home business opportunity to achieve financial independence in the global economy of the 21st century, to have a view of the total size of this industry and some views on possible future development and growth. This evaluation of the trends of the industry will help to dream-it-plan-it-do-it.
Very reliable statistical information is not freely available because these businesses are not well defined and are not part of governmental statistical planning and strategic information data. Some research and other information are available and will help us to get a broad view of the importance and trends of this industry.
Some general trends of and comments on the Business Industry:
The prospect of working from home has gained credibility over the years. It is no longer seen as a kind of part time job that the wife is doing from home while caring for her children. Take into account that most companies, about two-thirds of all companies, begin at home. That includes big companies like Apple Computer, Baskin-Robbins ice cream, Electronic Data Systems, Hallmark cards, the Lillian Vernon catalogue, and Purex.
In the USA, the average income generated by the home based business is substantial, as indicated by the following:
“Plus many home businesses do generate substantial revenue. About 35% have revenues of more than $125,000 and 8% more than $500,000. The median household income is $50,233 for households in general and roughly $75,000 for home entrepreneurs. The income for home based business owner is thus substantially higher than it is for the population as a whole.”
The home entrepreneurs business employs about 13.2 million people in the USA. It is estimated that about 50% of these are home based businesses. The assumption is that the home based businesses employs about 6.6 million people in the USA.
The home business industry is developing fast and becomes more important due to the following:
• The growth in the internet and the people connected to the internet. Two billion people are connected via the internet and this number grows by 200 million each year.
• Growth in the availability and lowering of the costs of broadband communication and connections worldwide has a positive influence on people connecting to the internet.
• The internet, increased online purchasing, money transfer mechanisms (notably PayPal), reliable global shipping, the decline in informal trade barriers and networks created through immigration have all made it easier for small businesses to serve global markets. The internet has been particularly important in enabling small businesses to cost effectively serve small market niches (the ‘long tail’ phenomenon).
• The development of computer technology, software, printers, dedicated telephone lines, and mobile phones creates new opportunities for the home based business and makes it more viable to operate a business from home. Affordable and powerful new technologies will continue to create new opportunities for the home based business. These technological developments will help to keep this industry growing.
• New innovations like:
o Express parcel delivery, distribution, cloud based IT services.
o Outsourcing, freelancing, communication technology, and the availability of skilled people in foreign countries makes it possible to not to have to perform all tasks at the premise of the home based business. It is easier to operate from a small premise at home.
o New business models have created new job opportunities for the development of home based business. Two examples are the network marketing industry, or multilevel marketing, and franchising.
• The growth of the knowledge and service based industries requires little office or working space and economies of scale does not apply.
• People are making lifestyle changes and prefer to work from home as it gives them flexibility, it saves time, and it eliminates commuting costs.
• The computer home business is not exclusively dependent on the local market to generate income, or for its financial existence; that makes this kind of business less vulnerable to economic cycles.
• Many people do need an extra source of income due to debt or other financial reasons and start their own home based business part time to generate a second income stream.
• With employer benefit packages being cut and the chances of losing a corporate job increasing, many view starting a home based business as no more risky than traditional employment. Job and income security drives people to start looking for and to develop an extra source of income for them.
• Due to demographic and social shifts. Aging baby boomers, women, Gen Y and others are all seeing home based business ownership as an increasingly viable work option. An interest in achieving work/life balance, flexibility, the opportunity to pursue a passion and working for your self are some of the reasons given for starting a home based business.
• There is a lack of corporate jobs. Large corporations have been battered by the recession. Even if the economic recovery is strong, it is unlikely that these companies will dramatically increase hiring. Instead of hiring full-time staff, they will stay flexible and lean through the increased use of technology, contractors, partnerships, and outsourcing. As a result, starting a home based business will be the best, and in many cases, the only option for corporate refugees.
“Nevertheless, owners are much more satisfied with their quality of life than other small business owners. However, the majority of owners do not appear to have made a financial trade-off in order to secure this quality of life.”
The number of people connected to the internet is growing very fast. Broadband is becoming more available in the world. The internet support technology and mobile applications of communication is growing at an astronomical rate. These developments create new opportunities for the internet related businesses.
It is being considered by some researchers that these developments will have a greater influence on the world economy than any economic revolution in history.