DC08-360 October 15, 2008
Credit crunch spurs spare room startups
The current economic climate is acting as a spur for thousands of people to become their own boss and to start up and run their own business from home, according to a new report by BT and Enterprise Nation.
Four Scottish locations are among the leading UK growth “hotspots” as more businesses start up operating from their garage or garden shed.
Glasgow achieves 15th spot in the top 50, Dunfermline 24th, Edinburgh 37th and Dundee 43rd. In first place is London.
The 2008 Home Business Report highlights a 16 per cent rise over the last year in the number of businesses being run from home. There are now more than 2.5 million home businesses, accounting for more than half (53 per cent) of the 4.7 million small and medium sized enterprises in the UK.
Home based businesses are also bucking the trend when it comes to confidence in their prospects during the financial crisis. They are buoyantly optimistic about beating the adverse economic conditions, with 72 per cent planning to win new customers over the next six months, two thirds (66 per cent) planning to increase turnover and more than half (58 per cent) developing new products and services.
The report also shows an increase in spare time start ups, with a third of people (33 per cent) running a home business in their free time. This thriving 5pm-9am economy offers would be entrepreneurs a low-risk route to starting their own business.
The freedom to make their own decisions is the most popular reason (33 per cent) why home based business people enjoy being their own boss, closely followed by the benefits of a better work/life balance (24 per cent).
Brendan Dick, director of BT Scotland, said: “The message loud and clear is that home businesses are thriving. But there is still much to do – we need the Government, public and private sectors, to come together to introduce new initiatives and remove the barriers to encourage this sector to continue to prosper.”
Emma Jones, founder of Enterprise Nation, itself a home-based business, said: “More home business means more dynamism in the economy, less traffic on the roads and tighter social cohesion as parents stay home to run a business and the household.
“This year’s report calls for action to encourage home businesses, including asking the government to look at the economic, environmental and social benefits of homeworking, asking development agencies to include home business targets in economic strategies, calling for changes to the planning system and on local authorities to invest in home business hubs and networking facilities and to give out clear information about planning permission and business rates.”
The use of technology is a critical factor in the start up and growth of home businesses - a view held by 82 per cent of business owners, with more than half of them (52 per cent) spending between £500 to £1,000 on Information Technology each year. Unsurprisingly 93 per cent of home-based businesses use broadband. Home business owners view their spending on technology as a valuable return on investment as it helps to keep their costs low and their sales and productivity high. When it comes to web sites, home businesses see their window to the world as a tool that helps them to attract new customers (46 per cent) and market themselves better (39 per cent). But it is also seen as the ultimate leveller. With a quality web site, a home business can compete on a truly global scale, making them look bigger than they are (43 per cent).
BT’s Dick added: “Advances in technology underpin the ability of home based businesses to compete. BT works with home based businesses to help them manage their IT and communications costs, to be more productive and more responsive to customers and suppliers.”
The 2008 Home Business Report is one of the initiatives of Small Business Week, for more information about Small Business Week, visit: www.sbw08.co.uk.
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NOTES TO EDITORS
The top 50 ‘hotspots’ have been sourced by Enterprise Nation from Selectabase.com, and includes business start-up figures for the 12 months to September 2008. The data includes the top 50 postcode districts with the highest number of resident start-ups over this period.
About Enterprise Nation
Enterprise Nation [www.enterprisenation.com] is the home business company. The company hosts the UK’s largest website for people starting and growing a business from home, runs the Home Business Awards, produces the annual Home Business Report and advises Government on the topic. Emma Jones can be contacted at emma@enterprisenation.com or on 0789 9871698
