Home-Based Businesses: Seeing Through the Myths

Don Cooper

Arguably the biggest trend in the American economy of the last twenty-five years is the explosive growth of the home-based business sector. Yet this dramatic story has gone virtually unnoticed by the mainstream business press. Why? Basically because several myths persist about the home business phenomenon that lead people to discount it. Well, let's see if we can't clear those up right here and now.

Myth: Home-based businesses are just a few people sitting around stuffing envelopes and crocheting potholders.

Fact: Among the nation's 25 million full-time home businesses are accountants, landscapers, web designers, medical billers, photographers, research services, travel agencies, PR firms, architects, courier companies, transcriptionists, bakers, interior designers, attorneys, printers, consultants, trainers, artists, dentists, and writers, to name just a few categories.

Myth: Yeah, but those people are not serious. They lounge around in their bathrobes all day.

Fact: Just because we don't always get dressed in the morning (Let's be honest-getting dressed takes up valuable time that we would rather spend working.), doesn't mean that home-business owners aren't serious. In fact, a recent survey by the American Association of Home-Based Businesses found that the majority of full-time owners work more than forty hours a week, and often work at night or on weekends.

Myth: Home-business owners are just making do until they can get a "real" job again.

Fact: On the contrary, most home-based entrepreneurs cite a desire for independence as the primary reason for starting their businesses. Furthermore, according to the AAHBB survey, half of the respondents said they would not return to corporate America for any amount of money.

Myth: Many home-based businesses are shams set up just for tax breaks.

Fact: What tax breaks? Self-employed home-business owners may not fully deduct health insurance costs and frequently are denied a home-office deduction. As a result, they may not deduct rent and utility expenses that other businesses may.

Myth: Home-based businesses are bad for neighborhoods, turning quiet residential areas into noisy, polluted commercial districts.

Fact: Home-office workers not only live in these same neighborhoods, we spend more time there! Why would we want to degrade the places where we live? In point of fact, home-based businesses reduce traffic congestion, resulting in less pollution. Most are so quiet and unobtrusive that you don't even notice them. (Odds are that you have at least one on your street that you didn't even realize was there.) However, criminals do notice them, and they keep away. Statistical and anecdotal evidence show that crime rates are lower in areas where there are more home businesses.

Myth: Home-based businesses are the same as any other small businesses.

Fact: While home-business owners confront most of the issues that any small business must deal with (marketing, collections, finding good employees, etc.), they also face four challenges that are unique to them: image, zoning, taxes, and isolation.

Myth: Home-based businesses are so small that they're insignificant.

Fact: Oh, really? Maybe you should tell that to the founders of Hewlett-Packard, Gillette, Black & Decker, Microsoft, Reader's Digest, and Nike, all of whom started their multi-billion-dollar companies in their houses. Thousands of large corporations began in someone's basement, garage, or spare bedroom.

Home-based businesses come in all shapes and sizes. Their diversity is matched only by the business community as a whole. And as demographic trends continue (i.e.-corporate downsizing, technological advances, etc.), the home-business sector will continue its tremendous growth. Opportunity abounds, both for home-based entrepreneurs and those companies smart enough to see through the myths and capitalize on the needs of this expanding market.

© 1998, Don Cooper and Guerrilla Seminars

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