National data from the Home Business Survey1 shows that in the UK, there are 2.8 million businesses operating full time from home, contributing £284 billion to the annual UK economy. This is an increase of 300,000 businesses over the past 12 months. In the 2009 Survey, 32% of respondents in the Home Business Survey started their business in the past 12 months, on account of redundancy, or people opting for a new career path that involves regaining control over their working life; 49% of respondents confirmed what they are enjoying most about being their own boss is ‘freedom to make my own decisions.’ Home businesses started before the recession have not had to dramatically change their strategy or practices. This ‘business as usual’ policy can be attributed to the fact that home businesses are operating on low overheads, making the most efficient use of technology, and often selling into niche markets.
The most frequently stated reasons for starting from home were lower start-up costs (57%), better work/life balance (52%) and being close to the family (33%). There has been a 9% increase in those ‘Working 5 to 9’ – the term we apply for people holding down a day job and building a business at nights and weekends. This enables business owners to build confidence and cashflow before moving full time into running their business.
Technology remains a key enabler to starting and growing a business from home, with 81% of survey respondents stating that technology is critical to the success of their business and 74% using social networking sites to keep in touch with other businesses.
Home businesses are growing by outsourcing and subcontracting work, as opposed to taking on staff. 89% of home businesses expected to increase turnover in the next 12 months and plan to do so by using freelancers/outsourcing (45%), and making greater efficiency of existing resources (42%). Only 4% said they would grow by hiring full time employees. The sectors showing the most significant growth are business services (business consultancy, legal, accountancy, architecture/design, training, outsourced services) and consumer services (arts/crafts, domestic repairs/services, beauty/wellness, tutoring, caring).
The over 50’s are well represented when it comes to home business; 68% of Home Business Survey respondents are between the ages of 36 and 59, with the majority (36%) falling in the 45-59 age group. This is reflected in the 2009 Business Pulse that showed, of the almost quarter of respondents who were over the age of 55, more than double (30%) were running their business from home, compared with an out of-home location (17%). Home business is bringing families together and we are seeing the emergence of multi-business homes where more than one business is run under a single roof. 18% of households responding to the Survey are home to at least one business and we expect this figure to continue to rise.
Supporting home business can have positive implications for local economies and the environment. Based on a study by Bradford University it is estimated that having BT employees working flexibly and from home has reduced commuting costs, saved 12m litres of fuel and reduced CO2 emissions by 97,000 tonnes.
When asked ‘what is the one thing you would like to see in your area that would help your business’, 43% responded with ‘events & networks for home business owners’ which is, in turn, driving the growth in home business hub facilities. There is more that could be done when it comes to tailored business support. When starting out, home business go online to seek advice and support (27%) closely followed by turning to government bodies such as Business Link (25%) but 16% of respondents confirmed they don’t go anywhere for advice.
The majority of home businesses fund their start-up through personal savings (75%) with the next preferred option being friends & family (20%).
The number of people starting and growing a business from home is felt to have had a positive impact on the economy, the environment and society.
Table 1. Number of home based businesses across the UK, 2008
Source: Home Business Report 2009, Enterprise Nation
Source: Home Business Report 2009, Enterprise Nation
* These figures are estimates and are calculated from the regional datasets given for Small and Medium Enterprise Statistics for the UK and Regions 2008, published on Wednesday 14 October 2009. Source: Department for Business Innovation & Skills
The Top 100 Home Business Hotspots ranking is based on an analysis of 550,000 SoHos (Small Office Home Office) and shows the areas with the greatest concentration of home based businesses. In terms of the regions with the largest numbers of areas appearing in the Top 100 listing, the South East leads, followed by Yorkshire & The Humber.
When looking at what cities appear in the Top 100 Home Business Hotspots, Hereford is 65th, compared to Worcester 77, Shrewsbury 47, Gloucester 32 and Birmingham 3.
The Top 100 Home Business Hotspots are ranked by postcode and based on home business data from infoUK, September 2009. This data offers a different snapshot to the national SME Statistics for the UK and Regions 2008 (Department for Business Innovation & Skills) as the Hotspots are based on analysis of 550,000 businesses, as compared with 4.8 million for the BIS data, this lists only the top 100 home business hotspots out of a total listing of 3,235 postcode areas.
Source: Home Business Report 2009, Enterprise Nation
The information available for showing the number of home based businesses within Herefordshire is limited. The only available source being the 2001 Census, which in 2010 is nine years out of date; but in absence of any other data this will give us an idea of what the level of home based working/businesses is in Herefordshire compared to elsewhere. The data used is the number of self-employed people working from home, taken here to be a proxy for home based businesses.
Table 2. Working from home statistics
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Source: 2001 Census, crown copyright
Source: 2001 Census, crown copyright
At the time of the 2001 Census, Herefordshire had 48% of self employed who worked from home, this was higher than all neighbouring authorities, the West Midlands region and England as a whole, with the exception of Powys which had 56%. Powys does have a slightly higher proportion of 16-74 year olds who are self employed, 27% compared to Herefordshire’s 22%.
Comparatively, of those who work from home both Herefordshire and Powys have lower proportions who are employees (34% and 26% respectively) whilst Telford and Wrekin and the West Midlands region as a whole had much higher percentages (56% and 51% respectively).
Source: 2001 Census, Crown copyright
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