Backbone of the economy

There are now 2.1 million home-based businesses in the UK, according to a new report from Enterprise Nation. And it claims 60% of current UK business start-ups are home-based.

The report, based on analysis of national statistics, regional data and consumer surveys, including web polling on Enterprise Nation’s website, finds people running a business from home now making a huge contribution to the national economy.

Unsung entrepreneurs

Report author Emma Jones, also founder of Enterprise Nation, said: ‘This report clearly shows the impact home businesses are having on the economy, environment and society.

'Every week, more than 1,400 businesses are started from a home base. We believe there is potential to increase this still further, with some dedicated support from government and enterprise agencies.’

According to the BT-sponsored Home Business Report, nearly one-third (28%) of the UK workforce is employed by home-based businesses. And, combined, the annual turnover of home-based businesses is thought to exceed £364 million.

The top performers are found in London and the south-east, but with home-based self-employment rising fastest in the north-west and west midlands, ‘the only two regions currently supporting dedicated home-business projects’.

Enterprise Nation's research also found entreneurial spirit booming among mothers, young people and the over-50s, including many who might otherwise be economically inactive.

But the report also reveals a flipside, with government and business support agencies  slow to recognise the contribution and social, financial and environmental advantages of running a business from home.

The report notes with concern the absence of any government research into the impact and size of home-based businesses, commenting: ‘The main source for this publication is the  [Office of National Statistics’] interdepartmental business register ... used to provide the number of registered UK businesses.’

For the report, Enterprise Nation also used estimates of the numbers of very small businesses as calculated by the Department of Business, Enterprise and Regulatory Reform. DBERR's calculations are based on data from the ONS Labour Force Survey and research by HM Revenue & Customs.

In a call for action, Enterprise Nation sets out a 10-point plan calling on the government and its agencies to:

• introduce statistics and indicators to help understand the home-business environment, including encouragement for business owners to stand up and be counted
• design new government policies and programmes to help and support home-based businesses, including business expansion grants
• consider financial incentives to encourage home-based business, recognising for example the environmental benefits, reduced demand on public transport and road usage, and advantages for rural communities
• develop more local physical infrastructure, including planning support for live/work schemes and investment funding for hub facilities
• promote and champion home-based businesses.

At local government level, it recommends greater clarity in guidance for home-based businesses on capital gains tax, business rates and allowable tax expenses.

For a copy of the report, click .