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Home Based Offices Can Lead To Serious Businesses
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by Toni Seger
TheSyndicatedNews columnist
Co-owner of a media/communications firm called ProseWorks(tm) Associates since 1992, Toni Seger has been a professional writer for four decades and since 2004, has produced a public affairs television show for the largest chamber in Maine.
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Home-based businesses tend to operate individually and somewhat invisibly, so it's easy to overlook their growing economic contribution. However, in the aggregate, the proliferation of home-based economic activity is changing the face of how business can be conducted.
In 1994, Ian Morrison and Gregory Schmid co-authored a book called "Future Tense", a book so prescient it is still coming true. The book accurately predicted many things we take for granted now like global access to information on a continual basis. The authors' vision was a technology driven, decentralized model, generating entrepreneurial economics unhampered by geography.
Today, the anytime/anywhere availability of information and communications is indispensable and its potential uses are still being discovered. One economic effect, however, continues to grow while remaining hidden. That is, the rise in popularity of home-based businesses and employees who telecommute their work from a home base.
Making the choice to work from home can stem from a number of reasons. In urban areas, a trend to improve air quality by decreasing commuting trips has caused employers to locate workers at home. In rural areas, where jobs are few, there may not be other satisfactory alternatives and self-employment may offer the best means of developing a good income.
Sometimes, a home base makes it possible to develop a second business supplementing a regular employment. Often based on a life style choice, home based employment can generate income more conveniently for a parent with small children or a person with disabilities. However, research shows an often assumed view that a home based worker is a young female homemaker with a hobby is wholly inaccurate.
An Ohio based study of nine states revealed 59% of home based workers were male, middle aged and involved in home based work for nearly a decade. Dr. Kathryn Stafford, associate professor of consumer sciences at Ohio State University's College of Human Ecology found home based men performing in traditional fields like sales and construction and that they contributed more to the Ohio economy than farming.
In Maine, home based businesses exist in every county and town. Jane E Haskell-Cowles, University of Maine Extension Educator for Knox, Lincoln and Waldo Counties wrote for The Maine Rural Development Council: "It can be argued that no community can prosper without the economic and social contributions of the home-based business owner."
Jim McConnon, a specialist in business and economics based at the University of Maine at Orono, has studied home based businesses extensively and is continually amazed at the variety of activity that can take place at home. Services are the best bet for a home base. Nationally, professions that work well from home are legal services with a 98% survival rate, management consulting at 65% (compared to 30% working from a non-home base) and engineering, architecture and accounting with survival rates at 60%. All survival rates refer to businesses five years or older.
Products, however, can be made from home as well. In manufacturing, surprisingly enough, the home base does better with a survival rate of 79% compared to 54% for non-home based businesses.
Businesses that start with a home base overwhelmingly remain there. According to a national study completed in the spring of 2000, less than 5% of businesses, founded at home in 1992, moved out. Further, less than one-half of one percent of businesses founded outside the home moved into a home base. Finally, location was not a factor in the eventual success or failure of these businesses.
Nevertheless, sometimes a successful home based business simply needs more space and has to move out.
That was the case with Pieceworks, Inc. started in a home basement in 1996. Pieceworks, based in Liberty, Maine provides assembling and manufacturing services on an outsourcing basis. After only a small amount of marketing, Pieceworks found there were a number of companies, some as large as 100 employees, that could benefit from outsourcing some or part of their assembly processes.
"Companies benefit from outsourcing seasonal work because it means they don't have to take on and lay off people", explains Pieceworks owner Cathy Roberts. In an era where manufacturing successes have shrunk, the success of this rurally located business is noteworthy. Obtaining contracts through government agency matches and other sources, Pieceworks developed an excellent track record for high standards and quality control.
Largely through word of mouth, the company steadily built a loyal clientele that quickly required more space. "Some businesses can't profitably sustain a manufacturing facility, of their own, so it pays for them to outsource. We're prepared for all types of production and regularly work in metal, plastic, wood, and fiber."
Pieceworks doesn't need an expensive storefront. They just need space for an efficient and flexible assembly process. "We often create custom solutions for small businesses and, sometimes, we deal with aspects of production the parent company considers a headache", explains Roberts. In addition to assembly, Pieceworks will collate, label, package, ship and/or warehouse products. Their web site pieceworksinc.com advertises they place no limits on volume, time constraints, or distance.
Jack and Wendy Newmeyer launched their award winning business, Maine Balsam Fir, from their home in rural West Paris, Maine in October, 1983 and, after several expansions, still work from their own property producing scented balsam pillows that have been sold all over the world.
In a lot of ways, the Newmeyers' choices for their 25 year old business reflect national survey data about home based businesses. Life style plays a very large role in decision making. In February 1995, after a dozen years of aggressively building their business, they made the conscious choice to turn away three huge orders totaling about $2 million. "We had several concerns", relates Wendy Newmeyer. "The product would have to be mass produced. We were concerned about quality and a general loss of control over something we were very proud of and we didn't want to build an impersonal assembly line." Mostly, the Newmeyers concluded their lives wouldn't be enhanced by more profit if it forced them to lose the quality of life they'd come to cherish.
Published: Sep 2,2008 15:10
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