Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association


Trends In Home-Based Small Businesses

According to a recent study conducted by the National Foundation of
Women Business Owners (NFWBO), home-based, women-owned
businesses in the U.S. number 3.5 million and provide full or part-time
employment for an estimated 14 million people. In today's economy,
home-based businesses are a growth industry to watch.

Listed below are several key findings of this study.

Nearly two-thirds (63 percent) of home-based women-owned businesses
employ people in addition to the owner. Full-time employment, including the
owner, numbers 5.6 million people. Part-time or contract income is provided
for an additional 8.4 million people.

Demographically, home-based women business owners are very similar to
non home-based women business owners. They are no more likely to have
children at home, which contradicts the supposition that women base careers
from home to balance the needs of work and a young family. While their
education level is somewhat higher, their age distribution and racial composition
is the same as non home-based women business owners.

Home-based businesses owned by women are much more likely to be newer,
smaller firms or in the field of business services.

The average age of a home-based woman-owned business is 6.1 years.
These businesses stand the test of time.

Key issues for women-owned businesses, regardless of location, include
maintaining business profitability, managing and maintaining business growth,
managing cash flow, and keeping up with technology.

Information technology is making it all possible. Information technology is opening
doors for all kinds of new businesses by allowing for greater freedom of choice.
Women entrepreneurs have taken advantage of these choices and created home-based
businesses to better fit their lifestyle needs.

Home-based women business owners are technologically savvy. In fact, home-based
women-owned businesses are just as technologically savvy as other businesses with
over half (56 percent) having at least one computer and nearly 4 in 10 (39 percent)
owning more than one. Two-thirds (66 percent) have a computer fax/modem,
55 percent use a cellular phone, 30 percent have CD/ROM capability, and 32
percent use an on-line information service.

Home-based women business owners are much more likely than other businesses
to use private sources and credit cards to finance their businesses than they are to
depend on business loans, leased equipment, or vendor credit. Only 12 percent of
home-based women-owned businesses used a commercial loan during 1994,
compared to 40 percent of non home-based women-owned firms.


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