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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