Jean Aime writes about changes in the home business market:
Last summer, the Elite small business specialist conducted 15 multi-county workshops on home-based business. Participants from 32 counties and 82 communities attended these workshops, providing a total of 156 usable surveys (a 57% response rate).
Demographic Characteristics
Over three-fourths of those who responded were females between the ages of 30 and 39. Nearly 90% were married and 67% had children living at home. This implies that these entrepreneurs aren’t totally dependent on their business for income, but perhaps rely on a spouse’s income for most of their funds. Over 80% had some postsecondary education either in a vocational-technical school or college.
Reasons for Involvement
Almost half the respondents decided to start their business because their hobby had become profitable and one-third wanted to supplement farm income. Other reasons included staying home with children and job dissatisfaction.
Financial Characteristics
We found that the home-based businesses operated by the respondents weren’t highly capitalized. Slightly more than 40% completely financed their business from personal savings, and another 20% used household monies. Only five percent used bank loans as their only source of funding, and none obtained backing through the Small Business Administration, a government agency that frequently guarantees loans for small business endeavors. The average first-year investment was $3,243, but the median response was $1,000.
About two-thirds of the respondents said the home-based business contributed less than 25% to their total family income. Only 12% said it contributed more than 75%. It’s important for Extension personnel to caution that, realistically, most home-based businesses provide only supplemental income.
Employment and Managerial Experience
We found that over half of those already in business didn’t hold another job in addition to their home-based business. Of those working, most were employed in farming, administrative support (such as clerical), and professional occupations. Almost all had, however, worked for pay at some time in their life. Interestingly, about half had managed another business, and two-fifths had owned another business at some time.
Business Structure
The amount of time spent on business-related finance and production by the majority of respondents indicates that the home-based business is truly a part-time operation. Over three-fourths said they spent less than five hours a week on finances, and only 24% spent 40 or more hours on the production of their product or service.
Read more…
No comments yet.