Home-Based Businesses Increasing

More people are working from home, and more of them are working for themselves, according to Census data released today. The chart below compares the growth in the number of self-employed people working exclusively from home to growth in total home-based workers and the total number of people employed.

The number of self-employed who work exclusively from home increased from 3.47 million in 1999 to 4.34 million in 2005 (the latest available from the Census). The total population of working from home at least some of the time increased from 9.48 million to 11.33 million in the same period.

Also notable: the home-based workforce is well-educated and earns significant income. In 2005, 46.5% had at least a bachelor’s degree (compared to 27.2% of the total population over 25) and had median family income of $63,648 (compared to the national median of $46,242 that year). The biggest share (28%) of home-based businesses were in professional services — lawyers, accountants, programmers, consultants, and the like.

This data reinforces the trend that more and more home-based businesses are serious enterprises. We wrote about this last year, when Steve King of Emergent Research published a report on “homepreneurs.”

“The myth is around people working from home don’t make money, and that these things are part-time, hobbies,” King told me this morning. “There’s a big chunk of these people who are serious as opposed to hobbies.”

King also notes that the Census survey asks people specifically about whether they work from home, rather than whether they have a “home-based” business or job. So people who work out of the home — consulting on site, or home-improvement contractors, landscapers, etc., — are not counted. King’s research suggests that there are about 6.6 million “serious” home-based businesses that provide at least half of their owners’ household income.

The technologies that enable more people to work at home have advanced significantly since 2005, so the number of home-based entrepreneurs is most likely even greater today. Explore the Census data tables here.