New analysis from Direct Line for Business (DL4B), based on data from the Office for National Statistics (ONS), reveals that just over half of all UK small firms are run from the home of the business owner.
The findings show that there are currently 2.5 million home-based business owners in the UK, representing just over half (52%) of the total number of UK SMEs. These home-based business owners now account for 8% of the UK’s total workforce.
The largest concentration of all is in Herefordshire – where 27% of the county’s 92,000 total workforce is a home-based business owner. Pembrokeshire is second with 23% and Eastbourne is third with 20%.
Men are more than twice as likely as women to run their own business from home, with 1.7 million male home business owners across the country, compared to around 818,000 female home business owners.
Small businesses are a vital part of the UK economy.
Marketing Donut reported this week that a study of UK small businesses has shown a rise in the number of people setting up micro businesses and hiring people for part-time work.
The study by Freelancer.co.uk assessed 300,000 businesses over the past 12 months and it concludes that an entrepreneurial boom is taking place in the UK, with significant numbers of people starting up new ventures across the country.
According to the study, Brighton and Newcastle have seen the highest growth in the number of new micro businesses being launched (up by 24%), followed closely by Manchester and Southampton with 23% growth. London has seen 21% growth, Edinburgh and Liverpool 20%, Birmingham 19% and Sheffield 8%.
The research also shows that there have been positive knock-on effects for freelance workers in business support sectors, such as website design. It found there has been a 19% increase in the number of micro businesses commissioning new ecommerce websites.
In addition, orders for shopping carts to be installed on new small business websites are up 18%, email marketing is up 20%, graphic design is up 12% and logo design is up 6%.
So why are micro businesses taking off:
- You can start off working at home
- Your start up costs are low
- You can do it part time when it suits you
- With wages frozen and costs rising it can provide a useful additional income
- Its easy to be price competitive with low overheads
- The Internet makes it easy to sell your goods and services
- Your social capital can be used to generate sales ie use your contacts and connections
- There could tax advantages – employees generally pay more tax than sole traders
- Some clients prefer the personal touch
- It could be start of something big