Title

Making plans - Home-based businesses

Document Type

Journal Article

Publisher

Industry Engagement Group

Faculty

Business and Law

School

Management, Small and Medium Enterprise Research Centre

RAS ID

5600

Comments

This article was originally published as: Wang, C. , Walker, E. A., Redmond, J. L., & Breen, J. (2008). Making Plans. Monash Business Review, 4(2), 28-31. Original article available

Abstract

Home-based businesses are a ‘hidden engine’ that are poorly understood and inadequately supported, claim Calvin Wang, Elizabeth A. Walker, Janice Redmond and John Breen. They undertook research to gain more insight into this sector. Continuous economic activity is vital to Australia and the main driver for the past 20 years has been small business, often referred to by politicians as the ‘engine room’ of the economy. However, little is known about those businesses that operate from a home-base, even though these represent the largest cohort both within the small business sector and the wider business community. This is potentially an economic, regulatory and even political problem especially if home-based businesses (HBBs) continue to remain largely ‘hidden’. Individually, HBBs make important contributions to economic activity in terms of job creation, wealth generation, business investment, the provision of goods and services and the servicing of local, national and international markets. There are well over one million Australians operating in excess of 850,000 home-based businesses. They include, but are not limited to, accountants and architects, web developers, photographers, mobile mechanics, pet boarders, bed and breakfast operators, freight movers, electricians, plumbers and painters. Collectively, HBBs provide important employment opportunities, not just for operators in the form of self-employment, but also family members and staff. Localised businesses consolidate social connectivity for people, making it possible for them to shop and socialise close to where they live and work. As a result, money stays in local communities and this potentially fosters a healthy local economy through wealth and further job creation. These benefits make HBBs particularly important as key drivers of both economic and community sustainability in rural and regional areas. This paper shows that the sector has real potential for growth and greater attention needs to be paid to it in respect of policies, programs and strategies to facilitate the growth of the sector, particularly at a local government level. Given the ease of establishing a business in the home and the lesser risks involved (both business and personal), HBBs provide important opportunities for entrepreneurial Australians to ‘give it a go’ and in so doing, to further drive economic growth and development.