Characteristics of Home Based Businesses

Home-based businesses are the predominant form of small businesses (estimated to be roughly about 60% of small businesses) but the lack of data on this sector can be frustrating. The latest official government data goes way back in 1992 when the last Characteristics of Business Owners Survey was conducted by the Bureau of Census.

Nonetheless, below are some pertinent characteristics of home-based businesses based on the Census survey:

• Over 90% of home-based businesses are sole proprietorships
• Majority (60%) are in the service and construction sectors
• A huge majority (90%) have no employees, and 7.2% have less than 5 employees (The survey found that only 0.2% of home businesses have 20 or more employees)
• 77% have gross receipts of only $25,000 or less with only 3.5% earning $100,000 or more

Interesting facts but I suspect that the landscape may have changed! For one, Internet, which has become an important business channel for home-based entrepreneurs, was not yet around at the time the survey was conducted. I hope that more home-based entrepreneurs are earning $100,000 or more this time around.