Home-Based Businesses Grew in 2010: AMI Report

By Nathan Eddy  |  Print this article Print

Cloud computing is one of the technologies that appeals to a growing number of home-based businesses (HBBs).

There was an 11 percent increase in those who started their home-based business due to downsizing last year in the United States last year, according to a report from AMI Partners. The report noted last year sole proprietorships made up two-thirds of the home-based business market, this year it is only one-third of the total market, indicating HBBs are growing through hiring employees.

The report noted weathering the economic storm over the past few years has been difficult for most businesses, especially the smallest, but despite the economic downturn (or perhaps because of it) HBBs appears to be a growth sector for employment in the United States. Not only that, but the decrease in sole proprietorships suggests HBBs are showing strong signs of growth plans in the future.

"It stands to reason that when some employees are downsized from larger companies, they are motivated to make their own employment path by starting their own company from their home office," the report noted. "This trend will likely continue."

The AMI study, the "2010 U.S. Home-Based Business Annual Market Overview," found over the last year there was a 10 percent jump in respondents who said they have plans to grow the business and hire more employees. Meanwhile, reported revenues became positive for HBBs in 2010 and projections show positive growth expectations for 2011.

The report suggested what this means for IT vendors is increased opportunity. As average employee size increased, so did average PCs per firm. Cloud computing is another area of strong interest among HBBs, AMI researchers noted. The report found one quarter of U.S. HBBs are interested in procuring hosted applications, nearly double the amount of their nearest cousins (small businesses operating out of a commercial setting with fewer than five employees). "Considering the 16 million HBBs in the U.S. market, this translates to a significant number," the report said.

"What’s interesting is that 80 percent of those who became HBBs because of downsizing from a larger company do not plan to return to the corporate workforce," said Jessica Efta, manager of market development for AMI-Partners. "They plan to stay HBBs for the long term. With today’s technologies, a small business owner does not have to have a storefront or office building to conduct a successful business."

AMI’s study offers a view of the U.S. HBB market and the opportunity for IT vendors. Topics covered include: firmographics, attitudes and behaviors, preferences and interest, ICT spend, ICT current and planned usage, cloud services and applications, purchase process, channels, and more.