Too little attention given to home-based businesses, says Strathclyde report

4 August 2008

Home-based businesses make up a significant part of the small businesses sector but to a large extent they are “invisible” to regulators and support agencies. So says a study published by the University of Strathclyde Business School, which argues that the contribution made by this sector needs greater recognition.

Data from an earlier survey carried out by the Federation of Small Businesses shows that home-based businesses account for 36 per cent of all businesses. The majority are full-time businesses and around one in ten have achieved a significant scale (10 or more employees, turnover in excess of £250,000). Overall, these are among the fastest growing small businesses. The highest proportion of home-based businesses are in Scotland, and the South West and South East of England.

The report from Strathclyde says that the trend to home-based businesses is set to continue, as technology makes it easier to run a business from home. Tax and legislation, such as planning regulations, have not adapted to this trend, however, and the study finds this has created uncertainty for home-based businesses.

The researchers say: “The implication for local authorities is that they should shift their agnostic, and in some cases hostile, stance towards home-based business and instead make them a focus for local economic development.”