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The Coming Home Business Boom

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There is a coming home-business boom. You may not read much about it, since
home business activity takes place quietly, but it's coming nonetheless. All
of the elements are there to support this quiet boom. Layoffs are increasing.
Home-equity gains of the past few years provide the modest capital needed for
a home-based launch. And people are getting tired of reporting to offices
where salaries are frozen and advancement opportunity is narrowing as people
hold tight to their current jobs.

The biggest recent factor to fuel this boom came on September 11. There are
certain to be millions across the nation now who shudder as they commute to a
tall office building. The attack has also dramatically increased our desire
to stay close to family. Parents of young children are probably growing
disenchanted with the life of daycare and office buildings in the new world
that abruptly appeared on September 11. Since job alternatives are scarce
during this downturn, you can expect people to start visiting business
opportunity fairs seeking home-based enterprise opportunities.

Two or three years ago I spent a few months working with a leading business
opportunity and franchise show, living the gypsy life while giving seminars
on how to shop for franchises. This was during the late-1990s boom years of
early ecommerce and high employment. It was a great time to start a business.
Yet attendance at these shows was down across the country. Who needs the risk
and trouble of a business launch when you can raise your earnings simply by
jumping from good-paying job to better-paying job. And with the stock market
sky-rocketing, you could accumulate wealth simply by shifting your nest egg
from one fast-flying stock to another.

With fewer choices in the job market and no opportunity in the stock market,
people will naturally start to consider a business launch. Just 15 years ago,
that meant rending office space or a storefront. Not any more. A home-based
business is perfectly respectable now. It's even coveted. The home business
is accurately perceived as offering more personal freedom than the
out-of-home launch that comes with the strings of large capital investment
and staff management.

We can thank the last major down cycle for taking the stigma out of home
enterprises. The early-to-mid 1980s saw corporations laying off while collar
workers for the first time. In earlier down cycles, while collar workers were
immune to layoffs as companies trimmed blue-collar manufacturing jobs. The
laid-off white collar workers became consultants and worked from home.
Suddenly the home enterprise was legitimate. Running a company from your
spare bedroom no longer meant you spent your day holding Mary Kay and
Tupperware parties.

The Internet increased the allure of the home-based start-up. Most shoestring
e-biz companies begin in the home, whether the company trades in products or
services. For a small Net-based business, there is little reason to rent
offices. Besides, statistics from the Small Business Administration (SBA)
strongly suggest your odds for success are greater if you launch from home.

The SBA has found that 52 to 55 percent of all businesses are no longer
active after five years. For those companies launched and grown in the home,
the failure rate is 45 to 48 percent after five years. Placing your business
in your home gives you a slightly better than even chance for survival. The
improved odds most likely have to do with the lower overhead of a home-based

With a soft economy and a growing number of laid-off workers who will
naturally consider a business start-up when they discover their job prospects
are dim, this is not the best time to launch a new enterprise. But I can tell
you from personal experience, the decision to launch a business is not
usually rational or logical. A home business start-up boom is likely in
process right now. It's not because of opportunity; it's because of desire.

About the Author

Rob Spiegel is the author of Net Strategy (Dearborn) and The Shoestring
Entrepreneur's Guide to Internet Start-ups (St. Martin's Press). You can
reach Rob at spiegelrob@aol.com


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Additional Reading

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