DEFINING THE HOME BASED BUSINESS

The home based business can be defined as a business whose primary office is in the owner’s home. The business can be any size or any type, as long as the office itself is located in a home.

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

“If one advances confidently in the direction of his dreams and endeavors to live the life he has imagined, he will meet with success unimagined in common hours.” – Thoreau

ESTIMATES OF THE TOTAL SIZE OF HOME BASED BUSINESS

“One study has estimated that the total number of people who run or are employed by home based businesses in South East England is in excess of 250,000 people, equivalent to 7% of the working population of the region.(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 entrepreneur businesses currently employ roughly 13.2 million Americans, including the owner.(a)

“To put these figures in perspective, let’s compare them to U.S. employment generated by two important industrial segments: venture-backed firms and the oil and gas industry. Analysis by the National Venture Capital Association shows that companies that received venture capital backing including such corporate giants as Intel, Microsoft, and Apple – employed 10.4 million in 2006.”(a)

THE IMPACT OF THE DEVELOPMENT OF THE INTERNET ON THE ECONOMY AND HOME BASED BUSINESS

The development of the internet has been and will be the big driving force in the development of the internet related home based business. Let us have a closer look at these developments. The following information is extracts from the McKinsey report.(b)

Two billion people are connected to the internet. This number is increasing by about 200 million per annum.
Almost $8 trillion exchange hands each year through e-commerce.
About one-third of small and medium-sized businesses extensively use web technologies.
The web has made possible new waves of business models and entrepreneurship. It has transformed industries.
The internet accounts for 3.4% of the GDP of the 13 countries that was part of the study. These countries represent 70% of the world GDP. The total contribution of the internet to the world economy is $1 672 billion or 2.9% of the total GDP.
The internet accounts for 6% of the GDP of countries like Sweden and the UK.
Over the past 5 years, the internet has contributed 21% of the GDP growth of the 13 countries that were studied. These countries represent 70% of the total GDP of the world.
This is a reflection of the small and medium-sized enterprises receiving a performance boost through the internet. These companies with a strong web presence grew more than twice as quickly than those with a minimal or no web presence.
The internet has become a very significant factor in the world economy and the growth of the economy. More specifically in jobs and wealth creation.