Home Business Report 2009

Compiled by

Enterprise Nation

Home Business Report November 2009

Enterprise Nation

Introduction from Emma Jones It has been a good year for home business. The number of people starting and growing a business from home has risen to 2.8 million. Together these businesses contribute £284 billion to the annual UK economy.

More people are ‘Working 5 to 9’ which whi ch is the term we’ve applied to those holding down a day job and building a business at nights and weekends. It’s the best way to start as part-time entrepreneurs build condence and cashow, before making a full-time move into self-employment. One of the factors inuencing the increase in home business start-ups is enabling and affordable technology. In responses to the 2009 Home Business Survey, 81% of respondents asserted that ‘technology ‘t echnology is critical to the success of my business’ and the majority of home business owners choose websites and blogs as their rst port of call for business advice. Technology is also playing a liberating role as survey respondents refer to the freedom and exibility they’re enjoying from being their own boss and an improved work/life balance. With home business, you can have it all; time with family & friends and a growing business. A signicant 89% of survey respondents conrmed they expected turnover to increase in the next 12 months. It is business growth, but not as we know it. Home business owners are growing turnover, not headcount. They are outsourcing and sub-contracting as opposed to taking on staff. This re-denes our attitude towards growth which has historically been based on number of people on the payroll. In this report we call on the Government to ensure business support projects and policies are aligned with this modern approach to building a business.

Growing the business without outgrowing the home is one of ve themes we focus on in this year’s report. The other four themes look at how home businesses are starting out, bringing families together, trading across borders and having a positive impact on the local economy and community. Each theme is illustrated with stories of successful businesses from across the UK. There’s a ranking of the top 100 home business hotspots and a summary of how business support is responding to accommodate the needs of home business owners. Great strides have been made in the past 12 months. It’s a year in which we celebrate the UK’s rst ever Home Enterprise Day, Business Link launches a national home business guide, and central Government adopts planning recommendations to encourage live/work developments. Yet more needs to be done to encourage the sector to fully ourish and the nal section of the report calls on various bodies to take action. I hope our calls will be heard and heeded. Emma Jones Founder, Enterprise Nation


Introduction from John Anderson Through our regional relationships and activities we are fully aware that the nature and shape of business enterprise is changing. Despite the challenging economic times many have reacted positively, taking the opportunity to start their new businesses from home, at the heart of their communities. This report highlights that an incredible 32% of respondents to the Home Business Survey started their business in the last 12 months, many turning redundancy into opportunity or inspired by the desire for more exibility and control in their working lives. We are seeing more startups than ever before entering traditional roles and professions working from home alongside a new breed of entrepreneurs diversifying to create new types of businesses. Home-based businesses are thinking differently and we believe that the recession has been a factor in spurring on this innovation. There are more skilled people in the labour market than in previous years who are able to take work when it’s available and when it suits them. The availability and increasingly wide-spread deployment of technology is driving many of these changes. The results of the Business Pulse, the largest survey of small businesses to be undertaken this year, showed that businesses who consider it essential to be at the forefront of technology are the ones also saying that they have been least impacted by the recession.

Faster broadband is considered to be the technology most likely to impact positively on business. Businesses who need to exchange large les and/or graphics is just one example but the possibilities are endless. Mobile technology is also creating an impact. The exibility of working from ofces, homes or just about anywhere is a further enabler for networks of people to work together, wherever they happen to be. It is clear that home based entrepreneurs are the lifeblood of their local communities and regional economies. Now more than ever the right support and resources must be available to allow them to compete and prosper today and beyond. In BT we will continue to work with partners across the regions and nations championing the small business community to help them survive and thrive. John Anderson Managing Director, BT Regions

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“It’s an inspiration to see so many people boldly responding to the recession by starting new businesses from home. The Home Business report shows technology to be a key enabler to this trend with 81% of survey respondents stating that technology is critical to the success of their business. It’s great to see that businesses in this sector are also early adopters of social media, with 74% using social networking sites, such as BT Tradespace, to attract new customers and defy the challenges of today’s economic climate. This is a fascinating time and a moment in history when we are seeing the greatest and most prosperous shift shift in working lives. The tools and advice are are all there. Be prosperous and enjoy them.” Bill Murphy Managing Director BT Business “One of the most signicant features of the present post-industrial era is the breakdown of the sharp distinction between spaces of work and home. The home is increasingly becoming a place of work rather than a respite from it. “This trend is clearly reected in the entrepreneurial economy, with more businesses started in the home than from separate premises. “Indeed, it has never been easier to start a business from home. Information and communication technology are becoming ever more powerful, access to open source software is increasing, the internet enables e-commerce and collaborations between individuals who are geographically separate, and virtually every business function can now be outsourced. “Even more signicantly, the home is not simply a temporary location. The majority of home based businesses continue to operate from home as they mature. Hence, any discussion of entrepreneurial activity has to recognise that the home is, and will continue to be, the most popular business start-up location.” Global Entrepreneurship Monitor, 2007/08

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“The majority of small businesses operate from the founder’s home. Despite this, they are unappreciated and ignored in the economic development strategies of local, regional and national governments. “This reects a combination of their invisibility and the lack of an evidence base, resulting in a stereotype which dismisses them as lifestyle businesses, largely run around family needs and economically insignicant.” insignicant.” Prof Colin Mason, University of Strathclyde “If you start a business right, you grow it better and one should question just about everything one spends in a startup. Think of it as weight. The more money you spend the heavier your business is and the more it weighs you down. The less you spend the easier it is to keep aoat, the less revenue it takes to stick around and the more likely you are to survive your rst year. Home businesses are light weight and light touch and anything that encourages this sector to ourish should be welcomed.” Doug Richard, CEO, School for Startups

“In running the business from home, I’m reducing travel, encouraging people to have a work life-balance and working at the same time as managing not to neglect my family. To recognise the contribution I’m making (along with all other home business owners), a clear government policy and supportive taxation approach would be brilliant.” Home business owner, Somerset


Report partners This report has been compiled by Enterprise Nation and is sponsored by BT. With thanks to BT for their continuing support in enabling the production of this report.

Working with partners and organisations across UK Regions, BT is helping to stimulate and educate home based businesses of all sectors to fully understand the role and benets that ICT and communications can play; helping them to grasp the opportunities it presents to grow and prosper their business.

About Enterprise Nation Enterprise Nation For more information visit [www.enterprisenation.com] [www.enterprisenation.com] is the home www.btplc.com/Thegroup/BTregions/BTregions.htm business website. Over 100,000 people visit the site each month to read lively BT Business features and watch the home business BT Business is BT’s specialist division show. In addition to the site, Enterprise dedicated to serving the UK’s small Nation hosts the Home Business Awards, and medium-sized businesses. It works produces the annual Home Business with more than 1 million businesses Report and offers resources in the form of across the UK offering advice and IT books and online tools to anyone starting and communications services that allow or growing a business from home. businesses to focus on what they do best – from start-ups and home-based Enterprise Nation also lobbies central, enterprises to signicantly larger multiregional and local government on the site organisations. topic. BT Business offers a complete range of For more information visit services to help businesses thrive, helping www.enterprisenation.com them to manage their costs better, be www.twitter.com/e_nation more productive, extend their business reach and be responsive to customers. About BT BT is one of the world’s leading providers From, BT Tradespace of communications solutions and (www.bttradespace.com), (www.bttradespace.com), the rst social services operating in 170 countries. business network to launch in the UK, Principal activities include networked IT which gives small businesses a quick and services, local, national and international effective way of making their business telecommunications telecommunications services, and higher stand out online, build lasting business value broadband and internet products relationships and sell effectively to and services. exible working solutions that ensure businesses can work from where ever BT Regions they choose. In the regions BT is at the heart of the home business community. BT has BT Business Insight offers free advice and specically aligned itself with the English guidance to smaller enterprises for all Regional Development Agency (RDA) stages of building a successful business at boundaries, Wales and Scotland to better www.insight.bt.com understand and respond to the needs of home based businesses. For more information on how BT Business can help small businesses go to www.business.bt.com

Report Contributors With thanks to Professor Colin Mason of The Hunter Centre for Entrepreneurship at the University of Strathclyde, and InfoUK, for their contribution to this Report. Hunter Centre for Entrepreneurship The Hunter Centre for Entrepreneurship, located at the University of Strathclyde, is a world-class centre of entrepreneurship education, research and outreach. The Hunter Centre teaches over a thousand students a year and is recognised as one of the largest, most successful university centres of entrepreneurship in the UK and Europe. Professor Colin Mason, who has assisted with this report, is a world-recognised expert in Business Angel and Venture Capital. With over 150 published papers to his name, he is author of ‘The Characteristics of Home Based Businesses, July 2008’ For more information, visit www.strath.ac.uk/huntercentre Info UK With headquarters in Manchester, infoUK is a business data and marketing company that helps businesses nd new customers, grow sales and their protability. infoUK compiles and veries its extensive business database, containing information on more than 2.2 million businesses, through an in-house team of telephone researchers who make over 40,000 calls a week. The company provides the latest information for direct mail, telemarketing, mobile SMS and email marketing purposes. The company has compiled the top 100 home business hotspots ranking for the purposes of this report. infoUK provides a wide range of data and marketing services to small and mediumsized businesses and home businesses, including email marketing campaigns and online data cleansing to ensure all contact details are up-to-date, accurate and fully compliant with the Data Protection Act. For more information, visit www.infouk.com


Contents Report Highlights

8

A Journey of Discovery

10

Five Key Themes Growing the business without outgrowing the home Working 5 to 9 Start business. Trade with the world. Family ties The local impact (incorporating Top 100 Home Business Hotspots) Enabling Home Enterprise: A call for action

12 20 24 28

35

Appendices Appendix I: 2009 Home Business Survey results Appendix II: Bibliography

40

Profled home businesses

London South West Scotland North East Yorkshire & The Humber North West South East East Midlands West Midlands Wales East of England Northern Ireland

Bodie and Fou and Minimyne Portfolio Directors Miso Funky and Tartan Twist Useyourlocal.com Lorraine Ellison and Cheryl/Katey Walsh Curl Harmony The Fine Cotton Company Peak Princess and Swiss Luggage Another Gorgeous Day Gower Cottage Brownies Peruvian Knitwear Iddictive

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Report highlights Home business across the regions/nations Region/nation

No. of home businesses

Contribution to UK annual economy (£bn)*

London

540,176

67.3

South East

448,247

44.9

East of England

286,161

28

North West

258,581

26.1

South West

266,519

21 . 9

West Midlands

207,190

21 . 4

Yorkshire & The Humber

199,293

18.8

East Midlands

183,411

18.3

Scotland

186,327

18

Wales

116,767

9.1

N Ireland

71,300

7.7

North East

78,573

6.7

• There are 2.8 million businesses operating full time from home, contributing £284 billion to the annual UK economy. This is an increase of 300,000 businesses over the past 12 months. • The recession has contributed to this increase with 32 % of respondents in the Home Business Survey having started their business in the past 12 months. This is on account of redundancy, or people opting for a new career pa th that involves regaining control over their working life; 49% of respondents conrmed what they are enjoying most about being their own boss is ‘freedom to make my own decisions.’ • Whether starting a business out of necessity or choice, an increasing number of people are basing the business at home. According to the 2009 Business Pulse*, of businesses started in the past 2 years, more than double the number of people started from home (22%) as opposed to out of home premises (9%) • The most popular factors selected in the Home Business Survey for starting from home were lower start-up costs ( 57%), better work/life balance (52%) and being close to the family (33%)

* These gures are estimates and are calculated from the regional datasets given for Small and Medium Enterprise Statistics for the UK and Regions 2008, published on Wednesday 14 October 2009. Source: Department for Business Innovation & Skills

• Home businesses started before the recession have not had to dramatically change their strategy or p ractices. According to the 2009 Business Pulse, of the 37% of businesses who said they had ‘noticed no changes’ in th e way they operate on account of economic conditions, 47% were home based businesses, compared with 28% of non home based businesses. We attribute this ‘business as usual’ policy to the fact that home businesses are operating on low overheads, making the most efcient use of technology, and often selling into niche markets.

•

Home businesses are growing by outsourcing and subcontracting work, as opposed to taking on staff. 89% of home businesses expect to increase turnover in the next 12 months and plan to do so by using freelancers/outsourcing (45%), and making greater efciency of existing resources (42%) Only 4% of respondents said they would grow by hiring full time employees.

•

Technology remains a key enabler to starting and growing a business from home and home businesses are early adopters of social media, with 81% of survey respondents stating that technology is critical to the success of their business and 74% using social networking sites to keep in touch with other businesses.

•

Technology also offers the potential for increased international trade. Coupled with tailored advice on how to access overseas markets and nd local partners, thi s could be a powerful driver of economic activity.

*

Over 7,200 small businesses contributed to the 2009 Business Pulse, the UK's largest survey of small businesses this year. It was commissioned by BT Business, NatWest, British Chambers of Commerce, Business Link, ACCA, Growing Business, everywoman and supported by The Design Council and The Prince's Trust.

9


•

There has been a 9% increase in ‘Working 5 to 9’ – the term we apply for people holding down a day job and building a business at nights and weekends. It’s the best way to start as business owners build condence and cashow before moving full time into self-employment.

•

The sectors showing the most signicant growth are business services (business consultancy, legal, accountancy, architecture/design, training, outsourced services) and consumer services (arts/crafts, domestic repairs/services, beauty/wellness, tutoring, caring)

•

The over 50’s are well represented when it comes to home business; 68% of Home Business Survey respondents are between the ages of 36 and 59, with the majority (36%) falling in the 45-59 age group. This is reected in the 2009 Business Pulse that showed of the almost quarter of respondents who were over the age of 55, more than double (30%) were running their business from home, compared with an outof-home location (17%)

•

Home business is bringing families together and we are seeing the emergence of multi-business homes where more than one business is run under a single roof. 18% of households responding to the Survey are home to at least one business and we expect this gure to continue to rise.

•

The Top 100 Home Business Hotspots ranking is based on an analysis of 550,000 SoHos (Small Ofce Home Ofce) and shows the areas with the greatest concentration of home based businesses. In terms of the regions with the largest numbers of areas appearing in the Top 100 listing, the South East leads, followed by Yorkshire & The Humber.

•

The areas that do act to encourage and support home business will reap benets for their local economy and environment. Based on a study by Bradford University it is estimated that having BT employees working exibly and from home has reduced commuting costs, saved 12m litres of fuel and reduced CO2 emissions by 97,000 tonnes

•

When asked ‘what is the one thing you would like to see in your area that t hat would help your business’, 43% responded with ‘events & networks for home business owners’ which is, in turn, driving the growth in home business hub facilities.

•

There is more that could be done when it comes to tailored business support. When starting out, home business go online to seek advice and support (2 7%) closely followed by turning to government bodies such as Business Link (25%) but 16% of respondents conrmed they don’t go anywhere for advice.

•

The majority of home businesses fund their start-up through personal savings (75%) with the next preferred option being friends & family (20%)

•

What else did we learn in 2009? That the spare room retains its top spot as the location of choice for the home ofce!

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A journey of discovery As well as contacting over 1,230 of our members for the 2009 Home Business Survey we also for the rst time ever embarked on a home business roadtrip. Over the course of the week commencing 14th September the Enterprise Nation team journeyed 1,233 miles, lmed 18 home businesses and picked up further data around the ve themes reected in this report. This is what we saw and heard… Now is a great time to start The mood throughout the week was incredibly upbeat. When Patrick Elliott (CEO of Business Link in London) opened an event with a question to the audience of ‘Do you think this is a good time to start a business?’ – a ripple of 200 voices replied a resounding ‘yes’. Technology means trade All of the businesses lmed are making the most of technology, whether it be Stuart Mills [www.useyourlocal.com] who is applying the web to the pub world, or Malcolm Gallagher [www.bizvision.biz] who is communicating his business message through online videos; produced from a home studio. Many of the craft businesses are using sites such as Etsy.com and MyEhive.com to sell their products to a national – and international – audience. Technology is broadening the trade and partnering horizons of many a small business. Freedom & control Having started up, home business owners are nding freedom and exibility in their working lives and relishing being in control of their creativity, working environment and earnings.

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Ethical Every business owner interviewed is doing something ‘good’ by being in business; whether it be Clare Nicolson [www.clarenicolson.com] who believes in giving work to the people in her neighbourhood, Emma Henderson [www.showpony.co.uk] who sources fair trade fabrics from India or Emma Warren [www.portfoliodirectors. com] who offers time and business experience to a charity. They would not refer to themselves as ‘ethical entrepreneurs’ as such but these business owners are having an impact in many a varied way. Growth through outsourcing The adage of ‘do what you do best and outsource the rest’ is being taken seriously. Companies are partnering up and work is being outsourced to professionals. Technology tools such as VoIP (voice over Internet Protocol), email and p roject management software means there’s no need to be in the same place but for others, physical networks are important as a place to meet business partners, and also just to h ave a social chat!

Locations visited • • • • •

Scotland - Glasgow North East – Whalton and Newcastle London South West – Bristol and Exeter West Midlands - Shropshire

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Theme I: Growing the business without outgrowing the home Home based businesses are following the principle of ‘do what you do best and outsource the rest’ – they are growing the business through increasing turnover, not headcount, and sub-contracting to expert freelancers and professionals, as opposed to taking on staff. In response to the 2009 Home Business Survey, 89% of respondents conrmed they expected turnover to increase over the next 12 months. When asked how this growth would come about, the results were as follows: Will this planned growth require you to take on new employees? Yes - full-time employees

4%

Yes - part-time employees

9%

No - will use freelancers or will outsource

45%

No - greater efciency of existing resources

42%

The gure of 45% saying they will grow through using freelancers and outsourcing is an 8% increase on the response to the same question in 2008 (37%); conrmation that outsourcing is on the rise. In ndings from the 2009 Business Pulse, of the 60% of businesses questioned with less than 5 employees, a signicantly higher number of businesses with 1 employee were home based (49%) as opposed to out of home (6%) and 41% of businesses with 2-5 employees were home based, compared with only 28% based in ofces outside the home.

Will this planned growth require you to take on new employees? Total

Based at home

Not based at home

1 26%

49%

6%

2-5 34%

41%

28%

7%

29%

26-50 8%

2%

14%

51-100 6%

1%

11%

101-200 5%

1%

8%

201-250 2%

0%

4%

More than 250 0%

0%

0%

6-25 18%

Source: BT Business Pulse Survey, October 2009

Home business owners are staying small when it comes to number of employees, yet are ambitious to achieve growth in turnover. This is happening successfully through outsourcing non core functions to experts and professionals. Functions such as: • • • • • •

Admin Accounting Fullment Sales & Marketing Web design and development Pay-as-you go software and services

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This move is presenting service providers with clear opportunities. “We have seen a signicant increase in custom from home business owners as they ask themselves why they should hire someone to take calls when Moneypenny can do the job at a competitive cost, and without the commitment that comes with taking on staff.” Joanna Swash, Marketing Director, Moneypenny PA “The rise of the VA (virtual assistant) industry goes hand in hand with the increase we’re seeing in outsourcing. People starting and growing a business know t hey need to have admin covered but are reluctant to hire someone to do this full time, on the payroll. Working with a VA means working on a project and agreed fee basis. I fully expect to see more businesses grow by hiring services, as opposed to people.” Carmen MacDougall, VA Coaching and Training Company The move to outsource is also leading to the launch of a number of websites that match business owners with the talent they seek, such as www.p eopleperhour.com and www.businesssmiths.co.uk As explained by Professor Colin Mason: “More and more costs of doing business are becoming variable rather than xed on account of increasing opportunities to outsource (e.g. distribution and shipping), reducing start-up costs. “For example, internet sites make it possible to recruit freelance programmers and web designers from around the world. Powerful ICT technology in the form of cheap a nd powerful personal computers and software, and other innovations (e.g. express parcel delivery, printing and copying) have provided small businesses with the power, scope and access of large companies, enabling them to look, perform and compete like large businesses, but without sacricing the independence and exibility of being small. “Small businesses are increasingly able to access technology through ‘plug and play’ access and open source hardware. Online social software and other connective technologies are encouraging collaborative relationships between small businesses.” This modern form of business growth presents a challenge and opportunity to business support providers.

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Call to action We call on central government, development agencies and business support bodies, to ensure business support programmes and projects are aligned to this new and modern form of company growth. Grants and support should be allocated on growth in earnings, as opposed to growth in employees. Reward and recognition should be given to companies working to expand their websites, not warehouses. Home based businesses may not be employing staff full time but they are p umping money round the economy by utilising the services of contractors, freelancers and other self-employed professionals. This should be more keenly taken into account in the design and development of business support programmes and grants/incentive schemes. “Home-based business seems to be offering policy makers a win-win for both the economy and the environment. So why is policy making so dominated by the old economy approach to employment premises and enterprise?” Tim Dwelly, Director, Live Work Network Bodie and Fou Karine Kong is one of the two founders behind online boutique, Bodie and Fou; the other founder is Karine’s sister, Elodie. Together they are building a successful, and international, business by outsourcing to experts and partners. “Elodie and I launched www.bodieandfou.com in May 2005, two weeks before I gave birth. We were super naive and thought i t would be this amazing ‘wow’ in cyber space but in fact the rst month we got one sale and the in the second month our sales increased by 100% and we got two! Luckily things picked up pretty quickly after that with the business growing around 100% per annum – even last year in the tight conditions, and it also looks like it is on track to do the same this year.” The sisters run the company from two home ofces in different countries. Karine takes care of the day-to-day running of the business whilst Elodie focuses on the creative aspects and together they work on nding designers and exploring new areas in which the business can grow. Rather than take on extra staff, Karine and Elodie decided to outsource website design/development and accounting; both functions being carried out by home businesses based in Bristol. “Outsourcing work to Jim (our web man) and a dedicated bookkeeper means I can spend more time on building our collection and our brand. Technology makes this an easy relationship; we use Skype, email and the telephone and it just goes to show, it doesn’t matter where you work, the job can still get done. This is how we intend to keep on growing the business.” •

www.bodieandfou.com

15


Swiss Luggage Swissluggage.com is one of a family of websites retailing top quality luggage, daypacks and other travel accessories. It’s a family run business run by a husband and wife team who are employed by day and run their business at nights and weekends. Making it even more important that they ensure every minute they spend on the business, counts. As the business has developed they have outgrown the garage, imported a higher volume of stock and rented local local pay as you go Warehousing. They got to a point following their Christmas peak where they realised they did not get into the business to spend their free time picking and packing; they wanted to focus their time on developing the site, brand, afliates and winning new customers. Managing Director of the business, Brent Shaw, decided to check out a new fullment provider, myWarehouse: “As you can imagine it was a nervous decision to outsource as it’s like letting go of a child and giving it to someone else to look after – this was our baby and it was very important that we felt someone else would continue to manage our pick, pack and ship solution in the same way and with the same expectations we had set out. Five months on, we are happy, orders have risen month on month and we have been able to focus on further developing the Swiss Luggage brand” •

www.swissluggage.com

Portfolio Directors Emma Warren knows a good deal about growing businesses. That’s because she’s been involved with a fair few of them; managing them, buying them and nancing them. She’s now applying her experience and expertise to running her own business, Portfolio Directors, which is based in Emma’s stylishly converted garage: “We have a dedicated team of ve, and work with owners and company directors to get them past tricky stages in their business cycle. In the team of ve there are th ree working Mums. One of the Mums works from home and comes over every couple of weeks, and the other Mum and I ex our time to make sure we can do Sports Day etc – the business has been set up so you never feel guilty about working from home/missing work to do something you need to do for yourself.” As well as offering exible employment, Emma is a role model case study when it comes to outsourcing work as she partners with other companies and utilises technology to ensure her company can continue to grow (without outgrowing the home) and offer top advice to clients: “We are currently evaluating cloud computing developments. This involves creating secure client areas with information dashboards – using SharePoint or Huddle – which are online document document facilities. It’s important to have a scalable scalable solution and with this the sky’s the limit!” •

www.portfoliodirectors.com

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The Fine Cotton Company Jane Robson had a career background of working for top high street brands including Debenhams, Top Shop, Homebase and Habitat. But after adopting her daughter she was looking for a more exible way of life. She’s found that in being the boss of The Fine Cotton Company which supplies organic bedlinen and homewares and is growing by successful outsourcing. “I run the business on my own and have learned many new skills in the last 18 months. It has been a steep learning curve for me. I have done various short courses in a wide range of business related subjects to gain knowledge. “If I’m unable to tackle something I call in friends who specialise in certain areas to help. Generally I have someone working with me most weeks. I outsource any areas of expertise that I need such as the website design, photography and accounts.” Jane also turns to the specialists when it comes to storing stock and fulllment. At the start, Jane was using a local warehouse and packing and distributing orders herself but as orders increased she recognised it was more cost effective to outsource. “The distribution team are experts in their eld and make a much better job than I could do!” Jane plans to continue growing the business over the next six months by focusing on customer service and satisfaction and continuing to outsource to the professionals. •

www.thenecottoncompany.com

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Theme II: Working 5 to 9 The number of people holding down a day job and building a business at nights and weekends has increased from 33% in 2008 to 42% in 2009. We have termed this form of business start-up as ‘Working 5 to 9’ and it’s clearly taking off! Do you run your business part time from home? 2008

33%

2009

42%

There are a few factors explaining why this is happening: Protection against redundancy Employees concerned about their job prospects have responded by building a business on the side to safeguard against future loss of employment and earnings.

Unleashing creativity Many 5 to 9’ers do something quite different to t heir day job and see the business as a creative outlet. Technology advances Technology at affordable prices has enabled Working 5 to 9 to ourish. A mix of gadgets and applications keep you in touch with business round the clock and with PayPal predicting a boom in online spending (from £8.9 billion in 2009 to £21.3 billion in annual sales by the end of 2011), many 5 to 9’ers are turning to the web to promote and sell products. It’s the best way to start Being in the position of having an idea yet needing the time for it to develop and sales to grow, means starting out whilst holding down a day job is simply the best way to start. You get the security of a salary whilst building condence and cashow in your new business. Factors pointing to this trend include:

*Source: OFCOM and Samknows.com Research from tests run through monitoring units connected to around 1,500 homes and a range of suppliers’ services. ** eBay annual results, 2008 *** ‘Working 5 to 9 – how to start a business in your spare time’ by Enterprise Nation, with support from Staples. This is the title of a book to be released by Enterprise Nation in January 2010

•

Peak hours for accessing the internet are from 5 to 11pm, according to one of the most sophisticated research programmes undertaken in to broadband speeds in January 2009*

•

The number of Britons with a full-time or hobby eBay business has grown 160% to 178,000 in 2 years **

•

Research carried out with ofce supplies company, Staples, in May 2009 showed an increase in footfall to their stores between the hours of 5 and 8pm. ***

•

In a poll carried out by BT Tradespace in October 2009, 65% of respondents conrmed they were building their business at evenings and weekends with 35% of respondents as full time business owners.

18


Call to action Working 5 to 9 is a way of working – and a route to starting a business – that should be actively encouraged. It’s low risk, low cost and gives people time to develop the condence required to ease out of employment and into self-employment. Support programmes should ensure they do not exclude this community of part-ti me entrepreneurs by having support available only on weekdays and during ofce hours. Jonathan Dowden, enterprise manager at North East agency, Entrust, has been trialling a 5 to 9 business support hotline h otline and says: “Having recognised a rise in the number of people starting a business whilst holding down a day job, we wanted to ensure our support was tailor-made for this audience. We launched a 5 to 9 telephone service so 5 to 9’ers can call and access support at a time to suit them. The service has been available since July 2009 and is growing in popularity.” We call on more enterprise agencies and business support providers to follow this example.

Miso Funky By day, Claire Brown is a sub text writer for a TV company in Glasgow. It’s a job she enjoys but doesn’t feel utilises her full creative talent. Which is why when she returns home at night, she becomes boss of Miso Funky, a craft business selling handmade goods via Claire’s own online store and Etsy.com When not operating in the virtual world, Claire also sells her products at craft fairs and markets; a good number of which are organised by Glasgow Craft Maa, of which Claire is an active member. “Ideally, I would like to build sales in Miso Funky so I can give up the day job but as each product is hand made, I’m now considering how I grow a business that’s so dependent on my time and efforts. I’m working on it so please come ask me again in 12 months!” •

www.misofunky.com

19


Curl Harmony Nadine Harding was in full time employment when she came up with the idea for Curl Harmony. “I always intended to stay i n employment and be a 5-9er, however, I was made redundant in June 2008 before I launched the business. I used this extra time to focus completely on my ideas.” The idea had come because Nadine found it difcult to nd natural products for her own afro hair and by researching the market realised others were having the same struggle. She turned her spare room in to a lab and started to experiment. “I gave samples to friends, family and also strangers to evaluate. Their positive feedback gave me the condence to go to market with my products.” Nadine manufactures, lls and labels all the bottles by hand but this may not be for much longer. Business has picked up so much in the past 12 months that Nadine is in need of help: “I’ll be looking to contract out the manufacturing side of the business to free up more time to concentrate on marketing and sales so I can keep growing this 5 to 9 occupation that keeps me going!” •

www.curlharmony.co.uk

Another Gorgeous Day Barbara Steadman refers to her life as a case of ‘numbers by day’ and ‘words by night.’ That’s because her day job is being a Finance Director for a College and her evening activity is running online gift store, Another Gorgeous Day. The company provides gifts with special quotes. To set up this 5 to 9 business, Barbara has had some helping hands from the family. “My Dad helped with my show stand and a nd store room. Mum is chief data input clerk for the website, my sister keeps me focused and then my husband stupidly said one night “is there anything I can do to help”? The next day I enrolled him on a photography course so he can can take all the product shots. Most importantly, they all give me encouragement and are very proud of what I am doing.” With an impressive and professional website, the business is growing nicely and Barbara’s plan is to build sales so she can concentrate full time on being her own boss. With growing sales comes a need for more product photos so her ultimate ambition is to have hubby leave his job too! •

www.anothergorgeousday.com

20


Theme III: Start Business. Trade with the world. In his paper ‘Characteristics of Home Based Businesses’, Professor Colin Mason made the point: “The proportion of home based businesses deriving more than half their sales from overseas customers – although very low (6%) – is actually greater than for other SMEs indicating the presence of a small proportion of home based businesses that are highly export oriented.” Horsham District Council has pioneered events for resident home based businesses for a number of years. In research commissioned by the Council in 2008, it was reported that of the home businesses surveyed, 15% were serving international markets (Abacus Insight, 2008). In Summer 2009, the eBay quarterly online index conrmed the natural match between online business and international trade: “There has been a huge increase in the number of exports as online businesses take advantage of the cross border sales opportunities presented by the internet. Selling online allows sellers to reach a wider market with low overheads which is critical in the current economic climate. There was a 127% increase in cross border online trade in 2008 compared with 2007. “With the Euro now signicantly stronger against the Pound, export opportunities in 2009 are even greater than a year ago. So, we expect cross border trade within Europe to grow even further over the next 12months as sellers take advantage of the changing exchange rate.” Yet we feel there is a need for advice on expanding into overseas markets to be made more readily and clearly available to home based businesses. Approximately what proportion of your revenue come from foreign sales? Nil

67%

Under 5%

20%

6-24%

8%

25-49%

3%

50-99%

2%

100%

0%

In responses to the 2008 Home Business Survey when asked ‘In the next 6 months, what do you plan to do?’ 19% responded ‘expand internationally’ yet in this year’s survey evidence shows the majority of respondents having nil or under 5% of their revenue coming from international sales. The potential to increase international sales is not being realized, yet could be with dedicated advice around the topic of international marketing and seeking local partners. The technology is in place and home businesses feel comfortable in using the tools and applications at their disposal. There is also a physical infrastructure, through the global network of serviced ofce providers. What is lacking is a clear route to access training on the cultural and growth aspects of expanding i nto new and international markets.

21


An example from the arts/craft sector: From home to international markets •

Upload products to platforms such as Etsy and My Ehive.com ↓

•

Utilise sites such as Lingo24.com and Translate Media for translation

•

Ship products around the world via courier services such as parcelmonkey.com

↓ ↓

•

Accept international payments with PayPal

•

Have a local address through virtual and serviced ofce provider such as Regus or nd work space through sites such as istopover.com

↓

↓

•

Reach new audiences and sell to the globe

“The internet, money transfer mechanisms, reliable global shipping, the decline in informal trade barriers and networks created through immigration have all made it easier for small businesses to serve global markets.” Prof Colin Mason “MyEhive.com offers artisans a window to the world. When sellers upload their handmade items they open themselves up to an international marketplace. With demand for British arts, craft and fashion on the rise, home based businesses are making sales to customers overseas but I think they could generate even more custom with training that introduces sellers to the opportunities in international markets and to local suppliers/stockists and partners.” Louise Campbell, MyEhive.com Call to action Websites offer an affordable and always-on platform to make sales across the globe. This needs to be supplemented with tailored training on business development, cultural awareness and partner-matching. With an international toolkit for home based businesses, we would see an explosive increase in the level of overseas trade and sales from UK home businesses to international markets. UK Trade & Investment could play a role in this, as could Global Entrepreneurship Week, by matching home businesses with peers from across the globe.

22


Lorraine Ellison Based from home in the beautiful surrounds of North Yorkshire doesn’t prevent Lorraine Ellison from trading with the world. Having been an International Director for a Chamber of Commerce in a job that involved organising and leading trade missions and exhibitions all over the globe, Lorraine started her own company in Spring 2004. “My work now, as ever, has always a lways involved my “network” which is always increasing. I offer business support, marketing and pr to a range range of clients worldwide. My main client is Lord Digby Jones who is the former Director General of the CBI and Minister of Trade & Investment. Investment. I manage his business activities and look after his brand development, pr and media.” The mainstay of Lorraine’s operation is her BlackBerry which is switched on 24/7 and neighbours who are on hand to offer homeworking support. “In my own tiny village most people work from home in one way or another. Some are farmers and one lady runs a successful dotcom business and employs a number of local people.” As for what Lorraine most enjoys about running i nternational projects from home: “I would say the exibility. I couldn’t face commuting day in and day out – it is is dead time and I would nd it very frustrating. Having worked a lot on my own over the years, in Africa and other parts of the developing world, you become very self motivated and I nd I work better in my own environment.”

Tartan Twist Gillian Crawford and Lyndsey Bowditch are sisters. They are also co-founders of Tartan Twist, a highly successful business selling Scottish styled jewellery at home, and now overseas. “We were aware fairly early on that Tartan Twist had an international appeal. Publicity in Scottish Field Magazine and The Sunday Post, both of which have a strong ex-pat following, led to a big boost in web sales from overseas customers.” The company then won the contract to design the ofcial pendant for The Gathering 2009 which was the biggest event in The Year of Homecoming 2009 and saw over 50,000 visitors, many from overseas, descend on Holyrood Park. Tartan Twist was inundated with customers and knew they had to do something to make the most of the appetite for their products from an overseas market. “When an overseas customer invited us to meet up in t he Far East to discuss possible tie-ups we turned to Scottish Development International for help. They helped fund the trip which meant we were able to make the trip sooner than we had anticipated. We are now selling in Japan and Australia to multiple outlets and we have had interest from the US and Italy. As a result of our experiences with overseas customers and the help we have received from Scottish Enterprise, we have built a strong overseas offer into our on-line shop for both wholesale and retail customers.” •

www.tartantwist.com

23


Peruvian Knitwear Amanda Ruiz came up with the idea for her business after becoming a Mum: “When my rst child was born we received lots of gifts from Peruvian relatives – ponchos, chullos (earap hats) and cardigans. They were widely admired and I soon realised there was a gap in the th e market for clothing that was different to the high street offer. We launched the business in September 2007 to catch the Christmas gift market.” Amanda visits Peru regularly to nd suppliers, sort logistics and meet the local artisans. “I have used the HMRC website http://customs.hmrc.gov.uk/ when I needed more information on setting up a temporary VAT number to import goods, plus information about duty: Peru is one of 16 countries where duty is not payable upon production of a GSP – or certicate of origin.” The company is doing well and beneting from good publicity as journalists love the clothes as well as the story of a Mum of two selling Peruvian woollies! Amanda is driven by the fact that each time a sale is made, someone benets: “My most memorable highlight in the past 12 months was when I was chatting to my factory owner in December. She told me that as a direct result of the orders coming from Peruvian Knitwear, she had taken on two new members of staff. This is such good news in these depressing days of the credit crunch. Peru is a poor country (approx 45% of people live under the poverty line) so to learn that we have all made a difference is excellent news.” •

www.peruvianknitwear.co.uk

Iddictive.com Mark Nagurski may be based in Northern Ireland but he pulls on ideas and trends from across the globe. His site, www.iddictive.com, is a melting pot of interesting ideas and innovations that readers can apply to starting their own business or as market intelligence. By creating a cost-effective online presence Mark has attracted an international readership and has bold ambitions for expansion. •

www.iddictive.com

24


Theme IV: Family ties One of the most inuencing factors when people start a business from home is to achieve a better work-life balance, as quoted by over half of Home Business Survey respondents. When asked how they spend extra time earned each week by dropping the daily commute, 29% of respondents said they get more involved in family activities and more than three quarters of respondents conrmed technology has enabled them to achieve more exibility in their working lives. Home business owners are not only spending more time with family members, they are involving them in the business; 20% of home businesses turn to friends and family for start-up advice and in the 2008 Home Business Report 58% of respondents conrmed that a member of the family worked with them/helped out in the business. This is now going as far as starting businesses together or running separate businesses, yet from the same home. According to the Home Business Survey, 82% of homes are resident to only one home business owner but a number of these business owners run more than one business (73% of homes have one business owner, running only one business but 24% of respondents conrmed at least one business being run from one home) We expect to see an increase in ‘multi business homes’ as partners/spouses/parents/grandparents see the benet of running businesses together, or collaborating across respective businesses. “Running a home based businesses is seen as providing a exible form of economic activity (e.g. number of hours worked, time periods worked and location of work) and an enhanced quality of life which people are increasingly willing willing to trade-off against economic prosperity. “The ability of a home based business to combine work with family is presented as being a particularly attractive option for young mothers (‘mumpreneurs’). The business enables them to keep up their professional, intellectual or artistic interests and earn an income without compromising the needs of the family. Some studies have also noted the benets that children derive from having a parent, or both, who run a home based business.” Professor Colin Mason “The ability to start and grow a business from home has enabled thousands of Mums to have that much-desired combination of being able to earn a living that’s equivalent to a full time wage, whilst being on hand for the family. Of course it’s still a juggling act we all continue to try and perfect but having the freedom and exibility to choose the hours you work and being at home when the kids need you, makes for a happy and stable family environment.” Jayne Graham, MD, 2020 Consulting and Director, Women in the Network

25


Home business is good for Mums and Dads and it’s also working well for the over 50’s. The majority of respondents to the Home Business Survey came within the 45-59 age range (36%) and ndings from the 2009 Business Pulse show of the 23% of people starting a business over the age of 55 in the course of the past two years, more than double the number started from home (30%) as opposed to out of home (17%) What this presents is an opportunity to match the business experience and connections of ‘olderpreneurs’ with the bright young things starting businesses, straight out of School/College/University. This call was made by serial entrepreneur, Luke Johnson, in his inaugural lecture as Chairman of the Royal Society of Arts Art s in October 2009. He is a champion for the cause of ‘olderpreneurs’ and says: “Interestingly, the level of self-employment among the 50-plus age group is around one in ve – one and a half times the level of entrepreneurialism across all ages. I see this trend growing because low interest rates and the death of nal salary pensions means many of those retiring will not have enough to enjoy their sunset years. They will be forced to work to make ends meet. But sustainable self-employment can offer nancial and social fullment. Not only can working for yourself bring material rewards, it is a great way to meet people and stay in touch with people from all generations – as customers, partners, suppliers, or perhaps staff.” PRIME is an initiative set up to assist older entrepreneurs across the UK. The charity seeks to help anyone aged over 50 in the UK who wants to start their own business or set up a social enterprise. Chief Executive, Laurie South, says: “There is a good reason to look at cross-generational links as research shows that cross generational companies seem to do better. To start a business you need passion for a product/service, marketing and selling skills and nancial understanding. Most people have only one of these. Taking a partner is a great way of making up for the areas in which you have no interest. That partner must not have the same skills as you – imagine two passionate people who are not very good at looking after the money! Your peer group friends are likely to be like you because that is why you chose them as friends. They will not necessarily be good business partners. It is easier to nd the complementary partners in a different age group because you will be looking for partners not friends. The key is knowing yourself and being honest about it. The next stage is matching people up. There I think there is some scope for outside help.” Call to action The role played by home business owning Mums and Dads who are educating the next generation of entrepreneurs should be recognised in national enterprise policy. And efforts should be made to nd ways of connecting business owners across the generations so partners with complementary skills can build solid businesses together.

26


Peak Princess Lissa Cook runs her business from home in the Peak Distri ct making handmade dresses for babies and little girls in Liberty prints. “I had the idea for Peak Princess Pri ncess last June sitting in the park with my god-daughter. I used to work in London producing news for Radio 4 and then made documentaries in Manchester but was totally burned out. The idea to do this is not such a left-eld idea as it seems as my Mum was a dress-designer and my grand-mother a milliner.” Lissa works from a sewing room at the top of the house and her husband, h usband, who is a freelance writer, works from a separate ofce. “We love working here together and often bounce ideas of each other during trips to the village post ofce or over lunch in the garden.” Lissa had always shown an interest in sewing & knitting and would pick up skills from her Mum who designed for a living. “Mum did an apprenticeship from the age of 15 and is incredibly talented. talented. Nan didn’t live close by and died when I was quite young so I didn’t get the chance to learn direct from her but as she was a milliner and her father was a bespoke shoemaker I guess there must be something in my genes! “I really also ought to mention my in-laws. My father-in-law, Phil, is a graphic designer and my mother-in-law, Carol, is also artistically talented and they’ve been wonderful and helped helped design the logos. logos. Sophie, my sister-in-law, put me in touch touch with Liberty and is great source of business advice. advice. And my husband is endlessly patient and supportive.” Lissa’s sales are growing as she says more p eople are happy to order direct online. She’s raising prole through PR and attending fairs to build the brand. The longterm business plan is to build a strong and trusted niche brand as Lissa develops her collection, a new boys’ range (‘Peak Prince’ of course!) and contacts with a select number of high-end boutiques. All this activity takes place with the unstinting support of a creative and business-minded family! •

www.peakprincess.co.uk

27


Your People Count and Panda Loves Kitsch There is not only one home business run under Cheryl Walsh’s roof, but two. That’s because Cheryl runs her business (Your People Count) from the spare room whilst daughter, Katey, works on her venture (Panda loves Kitsch) from the downstairs study. Add to this a Dad/husband who works from home as an employed civil servant, and you soon realise this home is buzzing with activity. “My business is a training and consultancy business that offers leadership and management packages. Katey’s business is a clothing company that makes and sells limited edition, handmade clothing. We both work from home and I have a spare bedroom that I use as my ofce and Katey uses part of her bedroom to design and cut fabric but uses the downstairs study to sew.” This homeworking family of three meet up at lunchtimes but prefer to go outside the home for business advice and mentoring. Cheryl appreciates the benets of being her own boss and being able to run a business that ts well with family commitments. “Both Katey and I love our independence and being able to develop our own ideas. The reason I left full time work was because I felt frustrated at not always being able to move things forward if it didn’t t in with someone else’s agenda. Katey loves the freedom of being able to create her own designs in the way she wants to work.” What a great way to work and see your family! • •

www.yourpeoplecount.co.uk www.weheartpanda.com

Mimimyne Mum-of-two Tabitha Potts is a classic example of a successful ‘mumpreneur’. After having her two sons, Tabitha spotted a gap in the market for eco-friendly clothing and toys for children, and decided to set up Mimimyne, which has since seen her nominated for the Mum-entrepreneur award at the Women’s Business Conference. Tabitha decided to run Mimimyne from home, which has helped her strike a better work-life balance and spend more time with her sons. Mimimyne taps into a very niche market, so the business is still enjoying great success despite the current economic climate, something that Tabitha attributes in part to her use of technology. “Technology has helped my business to survive the recession by keeping my costs low and allowing me to work from a nywhere”. Tabitha has also successfully boosted trafc and sales from the website since joining BT Tradespace, the UK’s rst social networking community for small businesses. She said: “The leads and trafc I’ve received have been excellent – when you’re setting up your own business you need to get noticed as much a s possible and with BT Tradespace I was able to do that quickly and for free.” •

http://mimimyne.bttradespace.com

28


Theme V: The Local Impact Local economies are springing into life on account of home business as workers stay home during the day, avoid clogging up the roads (and polluting the environment) and spend money in local shops and on local services. When asked ‘what is the one thing thi ng you’d like to see in your area that would help you and your home business?’ responses were: • • • •

Dedicated live/work developments 8% Events & networks for home business owners 43% A unit that offers hotdesking & professional meeting space 12% Faster broadband/more wi- hotpots 37%

What this highlights is home businesses needing to connect with each other to develop new business and relationships. Home businesses are already connecting through social media with almost threequarters utilizing social networking sites to meet/interact with new businesses etc (it will be of little surprise that Twitter is the favoured medium, winning 59% of the vote!) but responses show an eagerness from home business owners to come together ofine. In its work to encourage and support home businesses, Horsham District Council hosts an annual Microbiz event. Now in its 7th year, the event in 2009 attracted 423 visitors and 44 exhibitors; the highest visitor numbers on record, conrming an appetite from home business owners to attend events that offer learning and networking opportunities. It is for this reason that Enterprise Nation is launching Enterprise Nation Clubs, in partnership with a national VA (virtual assistants) network, to offer home businesses an opportunity to get together and talk business, as well as engaging in a bit of social banter! Many of these meet-ups will happen in home business hub facilities that are emerging across the UK. Director of Live Work Network, Tim Dwelly, is currently carrying out a national research exercise looking at what makes for the perfect hub environment. He says: “Home business owners need a place to come together to collaborate, socialise and share equipment. We are now seeing workhubs being set up in cities, towns and villages to meet this demand. Live Work Network has been commissioned by the government to report in 2010 on the best ways to run workhub facilities that support otherwise isolated home based businesses.” Tim Dwelly, Director, Live Work Network

29


“We have had Local Authority, RDA and ERDF support to create hub facilities in Shropshire that offer WiFi hotspots along with meeting, training and networking facilities. Business owners appreciate appreciate a ‘community’ of like minded people and occasionally relish the chance to get out of the home ofce, share ideas with others, explore new opportunities and maybe just catch up on the social chit-chat that you don’t get when working on your own from home. It’s vital from a business and social perspective that home business owners get together regularly and reach new markets and I’m sure we’ll see more facilities appearing that are dedicated to this purpose.” Fay Easton, Director, Enterprise HQ, Shropshire Call to action: Regional Development Agencies and Local Authorities to support the planning and development of hub facilities and be clear on the local approach to homeworking; ideally scrapping business rates that deter home business owners from identifying themselves, and are rarely levied.

Gower Cottage Brownies Before becoming a Mum, Kate Jenkins had a background in sales, marketing and PR. She’s putting her skills to good use i n promoting her business, Gower Cottage Brownies, which has taken off to such an extent that Kate is about to start building works to turn her current kitchen into a purely commercial one, kitting it out in industrial style mixers, trolleys and racking. The work is all being done by local Gower Builders which is just one way Kate is putting money back in to the local community. A key feature of the business is that Kate only uses free range local eggs produced on Gower and she’s just employed her rst member of staff from the village “I plan to take on more mums locally, as a mum myself I understand the exibility required and know how great we all are at multi tasking!” Kate makes regular trips to the local post ofce for banking etc and uses a local welsh courier company that delivers nationwide. Kate has been helped in return by the Welsh Assembly and explains: “Within Wales we are extremely lucky to have the Welsh Assembly funding a lot of True Taste and therefore the marketing opportunities have been excellent, I have been able to exhibit at various events in London, which would not have been affordable to me as a small producer, allowing me to increase my market awareness.” This home based entrepreneur is now concentrating on increasing wholesale orders and looking to supply high quality eateries and delicatessens across the rest of the UK. All this activity will come back to benet Gower which is a village pleased to have Kate Jenkins as resident in Gower Cottage!

30


Useyourlocal.com Stuart Mills is, quite simply, trying to introduce the pub world to the world wide web. He’s doing this through useyourlocal.com which started life as a unique pub parcel service. Stuart had the idea for Useyourlocal.com whilst working at Scottish & Newcastle. He pitched the idea to colleagues at a company Dragons Den competition and won the investment! This business, run from a home ofce in the quaint Northumberland village of Whalton, is now making serious waves on the pub scene. Stuart is signing up pubs to his service which allows them to register as parcelreceivers for local residents and benet from discount deals with partner companies such as promoteyourpub.com and Samsung. Stuart’s vision is to leverage the web to ensure the pub remains at the heart of the local community. “As consumers we receive emails from retailers offering their products or services but have you ever received an email from your local pub with details of upcoming events, rooms to hire, or new menu specials? We are encouraging pubs to create their own micro-sites and connect with customers to offer information and also useful services such as parcel collection. With so many more people working from home, there’s no reason why the local pub p ub can’t become the preferred business and meeting place .. and parcel collection point!” •

www.useyourlocal.com

31


The Top 100 Home Business Hotspots The Top 100 Home Business Hotspots are ranked by postcode and based on home business data from infoUK, September 2009. This data offers a different snapshot to t he national SME Statistics for the UK and Regions 2008 (Department for Business Innovation & Skills) as the Hotspots are based on analysis of 550,000 businesses, as compared with 4.8 million for the BIS data, and the table below lists only the top 100 home business hotspots out of a total listing of 3,235 postcode areas. This forms part of the Enterprise Nation Index that will record ongoing and quarterly changes to this ranking. Please contact [email protected] if you would like details on subscribing to the 2010 Index. Hotspot

Region/Nation

1

London (central*)

London

2

Bristol

South West

3

Birmingham

West Midlands

4

Manchester

North West

5

Glasgow

Scotland

6

Shefeld


7

Nottingham

East Midlands

8

Southampton

South East

9

Liverpool

North West

10

Leicester

East Midlands

11

Leeds


12 York


13

Northampton

East Midlands

14

Edinburgh

Scotland

15

Stoke On Trent

West Midlands

16

Swansea

Wales

17

Doncaster


18

Cardiff

Wales

19

Swindon

South West

20

Bournemouth

South West

21

Coventry

West Midlands

22

Plymouth

South West

23

Bedford

East of England

24

Milton Keynes

South East

25

Colchester

East of England

26

Brighton

South East

27

Lincoln

East Midlands

28

Cheltenham

South West

29

Derby

East Midlands

32


30

Norwich

East of England

31

Belfast

Northern Ireland

32

Gloucester

South West

33

Newcastle Upon Tyne

North East

34

Wolverhampton

West Midlands

35

Peterborough

East of England

36

Chestereld

East Midlands

37

Luton

East of England

38

Warrington

North West

39

Bradford


40

Hull


41

Stockport

North West

42

Oxford

South East

43

Hudderseld


44

Aberdeen

Scotland

45

Bolton

North West

46

Maidstone

South East

47

Shrewsbury

West Midlands

48

Preston

North West

49

Ilford

London

50

Slough

South East

51

Poole

South West

52

St. Albans

East of England

53

Barnsley


54

Romford

London

55

Manseld

East Midlands

56

Chelmsford

East of England

57

Newport

Wales

58

Telford

West Midlands

59

High Wycombe

South East

60

Harrogate


61 Walsall

West Midlands

62

Sutton Coldeld

West Midlands

63

Middlesbrough

North East

64

Harrow

London

65

Hereford

West Midlands

66

Rotherham


67

Kettering

East Midlands

68

Sunderland

North East

69

Bath

South West

70 Wirral

North West

33


71 Aylesbury

South East

72

Wakeeld


73

Exeter

South West

74 Worthing

South East

75

Hemel Hempstead

East of England

76

Stockton On Tees

North East

77 Worcester

West Midlands

78

Reading

South East

79

Blackburn

North West

80

Ipswich

East of England

81

Croydon

London

82

Watford

East of England

83

Taunton

South West

84

Salisbury

South West

85

Guildford

South East

86

Darlington

North East

87

Portsmouth

South East

88

Maidenhead

South East

89

Basingstoke

South East

90

Blackpool

North West

91

Grimsby


92

Wigan

North West

93

Oldham

North West

94

Solihull

West Midlands

95

Scarborough


96 Ashford

South East

97

Gillingham

South East

98

Wellingborough

East Midlands

99

Ballymena

Northern Ireland

100

Southend On Sea

East of England

34


Hotspot regions/nations regions/nations Regions/nations ranked in order of the number of high home business concentration areas located in that region/nation: • • • • • • • • • • • •

South East (16) Yorkshire & The Humber (13) North West (11) South West (11) West Midlands (11) East of England (11) East Midlands (9) London (5) North East (5) Scotland (3) Wales (3) Northern Ireland (2)

*London Central is made up of Camden, City, Islington, Kensington & Chelsea, Lambeth, Southwark, Westminster The London region records 5 hotspot locations but with the number of home businesses located in these areas being so high, this places London region as the lead region when it comes to the number of resident home based businesses. Disclaimer Although very extensive, the infoUK database will not contain details of every SoHo actively trading within the UK.

35


Enabling Home Enterprise: A call for action The themes in this report, supported by the Home Business Survey data and intelligence underpinning it, point to an increasing i ncreasing number of people starting a business from home and an ambition from existing home business owners to grow. But is enough being done to ensure the home business sector is able to fully ourish? We think there is room for more action across two key areas: • •

Encourage more people to start a business from home Support existing home businesses to grow

Encourage more people to start a business from home •

Working 5 to 9 Promote this as a sensible and low-risk way to start a business and ensure support is provided between the hours of 5-9 so this growing group of part-time entrepreneurs can access the advice they need to accelerate company growth.

•

Tailored support The Home Business Survey revealed 16% of respondents who did not access any form of business support. This was also reected in the 2 009 Business Pulse Survey that showed a higher percentage of home based businesses (as opposed to outof-home businesses) saying business support is not essential in advancing their business. We believe this is down to home business owners feeling support is not sufciently tailored to their needs. We call on Development Agencies, Enterprise Groups and Business Links to offer tailored support via channels of information, events and networks.

Example case study: Information: The national Business Link network is releasing on Home Enterprise Day a guide to starting a business from home. This is information tailor made for the home business owner. •

www.businesslink.gov.uk/homestartup

36


Example case study: Events: Business Link in London hosts events that are clearly dedicated to home businesses. “We speak to and support hundreds of small business each week so we’re in a good place to see that the number of people starting and growing a business from home is continuing to increase. It’s a great way to start – with low cost and low risk. And Business Link is completely focused on helping these businesses survive, succeed and grow. Small businesses have always been resilient during times of economic upheaval due to their ability to adapt quickly. Nowhere is that more true than amongst home-based businesses.” Patrick Elliott, Chief Executive, Business Link in London •

www.bllondon.co.uk

Recognise and reward Prole the achievements of home businesses in the media, and as part of Awards and other recognition programmes.

Example case study: Awards: Women Into the Network is a network in North East England for women in business. The Network hosts annual Awards and, in 2009, introduced a new category of Best Home-based Business, North East Woman Entrepreneur of the Year Awards 2009. The winner is announced on Home Enterprise Day! •

www.womenintothenetwork.co.uk

Example case study: Week-long recognition: In June 2009 NFEA, the national enterprise network, adopted home business as its theme and encouraged all enterprise agency members to run activities during the week focused on home business. “It’s not generally appreciated that most small businesses are based in the owner’s home. NFEA gave special attention to this sector in June ’09 when our members held events and promoted home business as a great way of being in business. We will continue to play our part in promoting the home as an ideal i deal start-up location” Dawn Whiteley, Chairman, NFEA – the national enterprise network •

www.nfea.com

37


Encourage existing businesses to grow Research needs and requirements It’s only by making contact with home based businesses that enterprise agencies and business support providers will truly understand local needs and requirements. Consider linking with consumer surveys that target households or conducting online polls through existing start-up websites.

Example case study: Research: In August 2009 Business Link South East issued its South East Business Monitor with the Hot Topic Spotlight being on home based business. The comprehensive research report found that home based SMEs have some dening characteristics compared to their non-home based counterparts. “Home based businesses account for a signicant minority (44%) of the region’s SME base and as such are important contributors to the economy. It is important that these SMEs are aware of, and are able to access the right support to help them survive the recession and be in a position to grow when recovery comes.” •

http://www.businesslink.gov.uk/SouthEast_les/HotTopic809.pdf

Recognise new forms of company growth By accepting that the majority of home businesses are growing by outsourcing and sub-contracting as opposed to taking on staff. Ensure this is reected in the design and development of business support programmes and grants/incentive schemes. Make international trade a viable option Through constructing online and user-friendly toolkits and a service that matches home businesses with international suppliers and customers. This could be achieved through a public/private sector consortium of groups including UK Trade and Invest, Global Entrepreneurship Week and international service companies such as BT, Regus, Lingo24.com and online sales platforms. Provide the opportunity for home businesses to come together So they can identify partnerships and collaborate on joint pitches and proposals.

Example case study: Connecting home businesses: Emily Moncuit is a seasoned connector. She runs Icon Events in Doncaster and brings together hundreds of home based businesses each month. One of the projects to have sprung from an Icon event is an online tendering tool that encourages small businesses to jointly pitch for large public sector contracts. •

www.iconevents.co.uk

38


Develop the infrastructure By supporting the development of hub facilities and clarifying the Local Authority position on homeworking and business rates.

Example case study : Local Authority position: The London Borough of Richmond upon Thames is taking a keen interest in home business. Since the recession hit, t he Council has seen an increase in the number of local residents heading home to start a business. The Council’s Home Based / Self Employed Scrutiny Task Group has carried out research and expects to clarify its supportive stance t owards home business in early 2010. This will happen through a nnouncements on the Council website. •

www.richmond.gov.uk

Enterprise Nation will continue to play its part in supporting the sector through being the UK’s leading home business resource and providing: • • • •

daily content for home business owners tools in the form of books/online services and Clubs to bring people together advice to corporates on product messaging and design consultancy services to Regional Development Agencies and public sector groups wanting to engage with their local home business base

We look forward to another bright year ahead for home business, and progress on the actions suggested above.

40


Appendix I: Results from 2009 Home Business Survey

Do you run your business full time from home? (> 30 hours per week) 42%

Answer Options

58%

Yes No Yes

Are you male or female? Answer Options

71%

Male Female Male

Response Percent 28.8% 71.3%

Female

Please indicate your age band

1% 4%

22%

Answer Options

36%

32%

Under 25

58.4% 41.6%

No

29%

5%

Response Percent

26-3 5

36-4 4

45-5 9

70 and over

60-6 9

Under 25 26-35 36-44 45-59 60-69 70 and over

Response Percent 3.8% 22.1% 31.7% 36.3% 5.0% 1.3%

When did you start this business?

5% 16% 31%

31% 16%

This year (2009) Last year (2008) Three to five years ago (2005-2007) Six to ten years ago (1999-2006) More than ten years ago (before 1999)

Answer Options This year (2009) Last year (2008) Three to five years ago (2005-2007) Six to ten years ago (1999-2006) More than ten years ago (before 1999)

Response Percent 31.5% 16.4% 31.1% 15.5% 5.5%

41


6%

Has this business always been home-based? Answer Options Yes No – used to have separate business premises

94%

Yes


No – used used to to have have sep separ arat ate e busi busine ness ss pre premi mise ses s

Why did you start from home? 5%

Answer Options

25% 23%

14% 23% 9%

L ow ow er er st st ar ar tt- up up co cos ts ts Avail Availabilit a bility y of technol technology o gy N o n ee ee d f or or an an of of fifi ce ce

To be be cl cl os os e t o m y f am am il y Better Better work-l work-life ife balance a nce R ed ed uc uc e m y c ar ar bo bo n f oo oo tp tp riri nt nt

Lower start-up costs To be close to my family Availability of technology Better work-life balance No need for an office Reduce my carbon footprint


Is this business your only source of income? 38%

Answer Options

62%

Yes No Yes


No

If NO, what other sources of income do you have (tick all that apply)? 13%

Answer Options

23% 10%

16%

8%

Part-t Part-time ime employ employmen mentt Inves Investm tmen entt inco income me Pension

29%

Full-time l -time emplo employme yment nt Othe Otherr busi busine ness ss(s (s)) Other

Part-time employment Full-time employment Investment income Other business(s) Pension Other


42


Does anyone else living in this house also ow and run a home-based business?

18%

Response Percent

Answer Options 82%

Yes

4%

Yes

18.2%

No

81.8%

No

2%

2% 2%

If yes – who (tick all that apply) Response Percent

Answer Options

89%

H us us ba ba nd nd /w /w ifif e/ e/ pa pa rt rt ne ne r O th th er er ad ad ul ul t r el el at at iv iv es es Teenage children

Ad ul ul t c hi hi ld ld re re n O th th er er ad ad ul ul t(t( s) s) – un un re re la la te te d

91.1% 2.2% 2.2% 4.4% 2.2%

Husband/wife/partner Adult children Other adult relatives Other adult(s) – unrelated Teenage children

In total, and including your own business, how many businesses are run from this house?

80

60

Response Percent

Number of businesses

40

20

1 2 3 4 5 6

0 1

2

3

4

5

6

Number of businesses

6%

72.8 23.7 2.7 0.4 0.0 0.4

Where did you go for start-up advice? 10% 4%

16%

Answer Options 11%

Response Percent

25%

28%

Friends/family A professional (bank/accountant) A government body (Business Link) Online Business organisation Don’t go anywhere for advice Other

Friends/family A professional (bank/accountant) A government body (Business Link) Online Business organisation Don’t go anywhere for advice Other

10.0% 3.8% 25.1% 27.6% 11.3% 15.9% 6.3%

43


Did you need to raise funding to get you up a d running? 31%

Answer Options

69%

Yes No Yes


No

If yes, where did the money come from? Answer Options

6% 13%

7% 3% 3% 8% 3% 6%

50%

Friends/family The bank Credit card G ov ov er er nm nm en en t o r a dv dv is is or or y s er er v vii ce ce Other

Personal savings The mortgage Private investors G ra ra nt nt

Friends/family Personal savings The bank The mortgage Credit card Private investors Government or advisory service Grant Other

Response Percent 20.2% 75.0% 9.5% 4.8% 11.9% 4.8% 4.8% 10.7% 8.3%

What is the single thing you most enjoy abou being your own boss?

32%

49%

Answer Options

Response Percent

18% 2%

Freedom to make my own decisions Financial stability Learning new skills/pushing myself Better Work/life balance

Freedom to make my own decisions Financial stability Learning new skills/pushing myself Better Work/life balance

48.7% 1.7% 17.9% 31.6%

11%

Do you anticipate increasing turnover next y ar (2010)? Answer Options 89%

Yes

Yes No No


44


If Yes, will this planned growth require you t take on new employees?

4% 9%

42%

Answer Options 45%

Yes – full time employees Yes – part-time employees No – will use freelancers or will outsource No – greater efficiency of existing resources

Yes – full time employees Yes – part-time employees No – will use freelancers or will outsource No – greater efficiency of existing resources

Response Percent 3.7% 9.3% 44.7% 42.3%

Approximately how many customers do you ave? 24%

Answer Options

22%

7%

22% 25%

Less than 5

5-10

11-50

51-100

Over 100

Less than 5 5-10 11-50 51-100 Over 100

Response Percent 22.4% 21.9% 25.3% 6.8% 23.6%

Approximately what proportion of your reve ue come from foreign sales? Answer Options

Nil

Under 5%

50-99%

100%

6-24%

25-49%

Nil Under 5% 6-24% 25-49% 50-99% 100%


If yes, which part of the house is your home office? office? 21%

Answer Options 8%

Response Percent

48% 11% 4% 9%

Spare room Li vi ving ro room

Bedroom Garden sh shed/garage

The kitchen table Other

Spare room Bedroom The kitchen table Living room Garden shed/garage Other

48.2% 8.6% 3.6% 11.2% 7.6% 20.8%

45


11%

What do you do with the time you save commuting? commuting?

2%

5%

Answer Options

40% 18%

12% 11%

Spend more time on the business Personal development Exercise Get involved in family activities More involved in community Relaxation Travel

Spend more time on the business Personal development Exercise Get involved in family activities More involved in community Relaxation Travel

Response Percent 63.5% 17.2% 19.3% 28.8% 8.6% 16.7% 3.0%

How important has technology been as a fact r in enabling you to run a business from home? Answer Options

It’s It’s critic critical al to the the succe success ss of my busi busines ness s Important My business does not use technology

Very Very impor importan tantt Not important

10%

It’s critical to the success of my business Very important Important Not important My business does not use technology

90%

Purely for business For both home/family and business


For both both home/f home/fami amily l y and and busi busines ness s

What does a day in your business look like?

35%

Answer Options 65%

% Time in home office % Time working outside of office % Time Time in in home home offic office e

81.4% 11.8% 5.9% 0.4% 0.4%

What do you use your IT Solution at home fo ? Answer Options

Purely Purely for busine business ss

Response Percent

% Time Time work working ing outsid outside e of offi office ce

Response Average 64.65 34.73

46

Home Business Report October 2009

What technologies are core to your business perations?

7% 12% 29% 2% 2%

Answer Options

Response Percent

18%

29%

Broadband Email Mobile devices Fax IT Support Business Apps/Online Apps/ Software as a service Key hardware (such as servers)

97.5% 96.2% 59.7% 7.1% 8.0% 41.6% 23.1%

Broadband Email Mobile devices Fax IT Support Business Apps/Online Apps/ Software as a service Key hardware (such as servers)

What would you like your website to do for y u? Answer Options

Enable us to trade overseas Allow us to market ourselves better Attract new customers Make us look bigger than we are Network with other businesses Network with partners/suppliers Engage with customers Encourage discussion/networking about issues that affect our business I don’t have a website but would like one I don’t have a website

Enable us to trade overseas Allow us to market ourselves better Attract new customers Make us look bigger than we are Network with other businesses Network with partners/suppliers Engage with customers Encourage discussion/networking about issues that I don’t have a website but would like one I don’t have a website

Response Percent 17.6% 64.3% 81.9% 30.3% 35.3% 24.8% 69.3% 24.4% 6.3% 2.9%

Do you use social networking sites to keep in touch with other businesses?

0% 26%

Answer Options

Response Percent

74%

Yes I don’t know what a social networking site is

No

Yes No I don’t know what a social networking site is

73.8% 25.7% 0.4%

* If Yes, which is your preferred channel? Answer Options

Twitter Other

Facebook All of the above

LinkedIn

Ning

Twitter Facebook LinkedIn Ning Other All of the above


47


Roughly how much do you spend on IT (hard are & software) each year?

12%

Answer Options

28%

60%

£0-500

£500 - £1000

£0-500 £500 - £1000 Over £1000

Response Percent 60.0% 28.1% 11.9%

Ov er £1000

How has technology impacted your business

14% 20% 11%

Answer Options

17% 24%

14%

Reaching new audiences/international reach etc Better work-life balance/flexible working Enabled growth Improved productivity/reduced admin Image – appearing big, when small Reduced costs

Reaching new audiences/international reach etc Better work-life balance/flexible working Enabled growth Improved productivity/reduced admin Image – appearing big, when small Reduced costs


What is the one thing you’d like to see in you area that would help you and your home business?

8%

38%

43%

Answer Options

12%

Dedicated live/work developments Events & networks for home business owners A unit that offers hotdesking & professional meeting space Faster broadband/more wi-fi hotpots

Dedicated live/work developments Events & networks for home business owners A unit that offers hotdesking & professional Faster broadband/more wi-fi hotpots

Response Percent 8.1% 42.5% 11.8% 37.6%

What do you consider the key barriers to gro ing a business in 2010? 15%

Answer Options

18%

20%

9%

11%

6% 2% 18%

Rising costs Lack of available support Legislation and red tape Finance, tax and VAT Lack of ICT skills Not understanding the requirements of a growing business Finding the time to plan for expansion No major barriers

Rising costs Lack of available support Legislation and red tape Finance, tax and VAT Lack of ICT skills Not understanding the requirements of a growing Finding the time to plan for expansion No major barriers

Response Percent 30.5% 14.6% 18.0% 30.0% 3.9% 10.3% 33.0% 25.3%

48


Appendix II: Bibliography The 2009 Business Pulse survey http://www.smallbusinessweek2009.co.uk/businesspulse BT TradeSpace 5 to 9 poll, October 2009 www.bttradespace.com Can Homeworking Save the Planet, The Smith Institute and Live Work Network November 2008 http://www.smith-institute.org.uk/publications/can_homeworking_save_the_planet. htm Characteristics of Home Based Business, Professor Colin Mason, July 2008 http://www.strath.ac.uk/media/departments/huntercentre/research/workingpapers/ media_144423_en.pdf Small and Medium-sized Enterprise (SME) Statistics for the UK and Regions 2008, The Department for Business Innovation and Skills , October 2009 http://stats.berr.gov.uk/ed/sme/smestats2008-ukspr.pdf eBay Online Business Index, Spring 2009 http://pages.ebay.co.uk/businesscentre/OBI_Spring2009.pdf Enterprise Nation: various http://www.enterprisenation.com Global Entrepreneurship Monitor 2008 http://www.gemconsortium.org/document.aspx?id=898 Home Business Manifesto http://www.homebusinessprogress.com Home Business Spotlight, South East Business Monitor, August 2009 http://www.businesslink.gov.uk/SouthEast_les/HotTopic809.pdf Home-Based Business: the Cinderella of the Enterprise Economy? Presentation delivered to ISBE Conference, November 2009 Professor Colin Mason, Tim Dwelly, Emma Jones Horsham District Council research into home business, various http://www.horsham.gov.uk/your_area/your_area_6173.asp InfoUK Top 100 Home Business Hotspot Ranking OFCOM and Samknows.com broadband survey, January 2 009 http://www.samknows.com/broadband/pm/PM_Ofcom_Jan09.pdf PayPal research into e-commerce, June 2009 https://www.paypal-press.co.uk/Content/detail.aspx?ReleaseID=170&NewsAreaID=2

Working 5 to 9 – how to start a business in your spare time Research conducted by Enterprise Nation and sponsored by Staples http://www.enterprisenation.com/Resources/p/w/8/Working%205%20to%209.pdf

Redbrick Enterprises Redbrick House • 9 Town Walls • Shrewsbury • SY1 1TW

T: 01743 272555 M: 0789 9871698 E: [email protected]

Home Business Report 2009

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