HOME BASED BUSINESS DEFINITION

Home-based business can be defined as a business whose main office is located in the home of the owner. The business can be of any size or type, as long as the office itself is located in a home.

In the US, there are about 6.6 million home-based businesses that generate at least 50% of the owner’s household income.(a)

“If one confidently moves in the direction of their dreams and strives to live the life they have envisioned, they will find unimaginable success in ordinary hours.” -Thoreau

ESTIMATES OF TOTAL HOME-BASED BUSINESS SIZE

“One study has estimated that the total number of people running or employed by home businesses in the South East of England is in excess of 250,000 people, which is equivalent to 7% of the region’s workforce. (c)

“While the average home entrepreneur business has two employees (including the owner), 39% have between two and five employees, and 10% have more than five. Using these average employment numbers, Emergent Research estimates that home-based entrepreneurial businesses currently employ approximately 13.2 million Americans, including the owner.(a)

“To put these numbers in perspective, let’s compare them to US employment generated by two major industry segments: venture capital-backed companies and the oil and gas industry. Analysis by the National Equity Capital Association Risk shows that companies that received venture capital backing – including giants like Intel, Microsoft and Apple – employed 10.4 million in 2006.”(a)

THE IMPACT OF INTERNET DEVELOPMENT ON THE ECONOMY AND HOME-BASED BUSINESSES

The development of the Internet has been and will be the great driving force in the development of Internet related home based businesses. Let’s take a closer look at these developments. The following information is taken from the McKinsey report.(b)

• Two billion people are connected to the Internet. This number is increasing by about 200 million per year.
• Almost 8 trillion dollars exchange hands every year through electronic commerce.
• About a third of small and medium-sized businesses use web technologies extensively.
• The web has made possible new waves of business models and entrepreneurship. It has transformed industries.
• Internet represents 3.4% of the GDP of the 13 countries that were part of the study. These countries represent 70% of world GDP. The total contribution of the Internet to the global economy is $1.672 billion or 2.9% of total GDP.
• The Internet represents 6% of the GDP of countries such as Sweden and the United Kingdom.
• In the last 5 years, the Internet has contributed 21% of the GDP growth of the 13 countries studied. These countries account for 70% of the world’s total GDP.
• This is a reflection of small and medium-sized businesses getting a performance boost from the Internet. These companies with a strong web presence grew more than twice as fast as those with little or no web presence.
• The Internet has become a very important factor in the world economy and the growth of the economy. More specifically in the creation of employment and wealth.
• Online marketing represents 15% of total marketing worldwide.
• People search requests for hard-to-find items or information totaled 1 billion requests during 2009.
• In the US, Internet users made $250 billion worth of purchases in 2009; in the UK, it was $63 billion or 2.9% of GDP. The average online shopper in the US has spent $1,773 over the year. In the UK, an average of $2,535 was spent.
• The study concludes that the influence of the internet on world economic growth, job creation and wealth generation, is increasingly important and strong.
• For individual businesses, the Internet lowers costs and increases revenue, productivity, and profits. The Internet helps these companies accelerate growth in export markets and gain access to new markets.
• The introduction of broadband stimulates the development of the Internet in those countries where it is being introduced. Internet stimulates GDP growth, job creation, wealth and increases productivity.
• In France, the Internet has created a total of 700,000 jobs over the last 15 years.

McKinsey research indicates the growth of people connected to the Internet, the importance of doing business through the Internet and the great influence that these new technologies have on the GDP of world economies.

THE INFLUENCE THAT THESE DEVELOPMENTS HAVE ON MY BUSINESS AT HOME

No precise research information is available on the expected growth in the online home business industry. I want to make some estimates based on the information discussed above:

• The annual growth of people connecting to the Internet is growing around 10%.
• The ability of the Internet to:
• Create new jobs. Give people an additional income stream. Have your own home based business and be self-employed. These changes create many new business opportunities.
• The new technologies related to the Internet will create new business models that will stimulate opportunities.
• More and more transactions and marketing are carried out through the Internet due to the development of new systems and technologies.
• Improved technology and communication systems make it cheaper, less risky and more attractive to start a home business.
• The influence of the development of the Internet on the GDP growth of the countries in the McKinsey study has been greater during the last five years than during the previous fifteen years. The trend is upward. Many of the conclusions of this study indicate that the influence on economic growth in the future will be greater than in the past. Some developed countries, like the UK, have more people using the Internet than others, for example the US. That indicates growth in many of the developed countries.
• Due to the development and introduction of broadband in the world’s least developed countries, new trade and business opportunities will appear.

There is a trend for more people to want to work from home, as the following quote indicates: “However, home-based business owners are much more satisfied with their quality of life than other small business owners. Most home-based business owners don’t seem to have made a financial trade-off to ensure this quality of life. (c)

These new technological developments, changes in the economic environment, and changes in people’s social needs will result in a higher rate of growth in Internet-related businesses, as well as online home-based businesses, than the increase annual 10% on people who connect. to the Internet for years to come. Considering that average global GDP growth is expected to be much less than 10% per annum over this period, then there have to be good business opportunities here.

This expected growth in GDP due to Internet related business activities creates many online business opportunities for the owner of a home based online business.

A rapidly changing economic, business, and technological environment calls for big, fast action. Today’s opportunity could be gone tomorrow. This is the environment in which dream-it-plan-it-do-it big. Our team wants to support like-minded people who want to join us on this journey. To take action. Don’t procrastinate in this business environment.

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References:

(a) Small Business Success Rate Research Note Home Entrepreneurs: A Vital Economic Force.

Small Business Success Index Research; Home entrepreneurs: a vital economic force.

(b) McKinsey Global Institute: Internet Matters: The Net’s Radical Impact on Growth, Jobs, and Prosperity”

(c) Home-based business: Challenging its Cinderella status.

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