Part of the decline in share could be the shift in the types of home-based employment pursued by individuals. Since the 1960s, there has been less employment in family farming. Doctors and lawyers, who once were home-based, are now part of group practices. In many areas, zoning changes are making it more difficult to sell things from the home or to advertise goods or services for sale.
Home-based businesses produce less profit. Many entrepreneurs hope simply to make a living from their small business. As the following table shows, most home-based businesses have receipts totaling less than $25,000. On the other hand, most other small businesses have receipts totaling $25,000 or more; a third have receipts exceeding $100,000.
Percentage of Small and Home-based Businesses19, by Receipts, 1992
| Receipts | Non-home-based business (%) | Home-based business (%) |
| $0-24,999 | 45.7 | 74.0 |
| $25,000-99,999 | 22.7 | 19.9 |
| $100,000-999,999 | 25.5 | 6.8 |
| $1,000,000+ | 4.8 | 0.2 |
Despite these negatives, there were more home-based businesses in 1992 than in 1982. Many may have been then (and are today) the temporary bases of furloughed people waiting for permanent employment. More than half such businesses (57% in 1992) were started with less than $5,000 in capital, 25% without any capital at all.
Not all persons who have home-based businesses work exclusively from their home. Most only do clerical/office work at home and are out there doing construction, selling, driving vehicles, or doing repair work for others; 61.2% of businesses in 1992 (5.5 million) were of this type. When the work is done from the home, it tends to be manufacturing of some good, delivery of a service (medical, childcare), or sales from the home (home-based retail enterprise).
With advances in technology and the availability of the Internet, the number of home-based businesses may well grow. New technology may create new occupations and new markets for the products and services produced by home-based businesses. The extent of this is not predictable at a time when e-commerce, generally, is undergoing a consolidation.
Sources: Chart data: Kuenzi, Jeffrey J. and Clara A. Reschovsky. "Home-Based Workers in the United States: 1997." Current Population Report. December 2001. U.S. Bureau of the Census. "Almost Half of All U.S. Small Businesses Home-Based, Census Bureau Reports." Online. Available: http://www.census.gov/Press.Release/cb97-182.html. January 22, 2002. Office of Advocacy. U.S. Small Business Administration. Pratt, Joanne H. Pratt. "Homebased Business: the Hidden Economy." Small Business Research Summary. March 2000. U.S. Bureau of the Census. "Characteristics of Business Owners." 1992 Economic Census, September 1997. Office of Advocacy. U.S. Small Business Administration. Small Business Expansions in Electronic Commerce, June 2000.
1 Administration on Aging. "Future Growth." A Profile of Older Americans: 2001, December 21, 2001 downloaded January 24, 2002 from http://www.aoa.dhhs.gov/.
2 According to the Association of Medical Colleges. Wall Street Journal, January 15, 2002
3 Worker shortages and surpluses are also discussed in the chapter entitled "The Workforce."
4 Those with some college education or less, but without a degree.
5 Annual percentage. Kristina J. Shelley. "The future of jobs for college graduates." Monthly Labor Review, July 1992.
6 Two occupations were left out of the list due to lack of data on degrees conferred. Those were accountants and auditors, which will have 288,900 openings during 1998-2008; and engineering, mathematical and natural science managers, which will have 198,900 openings.
7 Projections were based on data from 1993-1998 in the Digest of Education Statistics, editions 1997 to 2000. Degrees conferred for systems analysts, EDP include all degrees for information science and systems and computer systems analysis. EDP stands for electronic data processing. Degrees conferred for computer support specialists include all degrees in computer and information science, even though many with these degrees are overqualified for the job.
8 Work visas given to foreign, nonimmigrant skilled workers working in many different occupational categories.
9 The bill, known as American Competitiveness in the Twenty-First Century Act of 2000, was passed in October 2000. It raised the annual cap of H-1B workers to 195,000 a year. It also eliminated quotas in some occupational categories and allowed visa holders to extend their status beyond 6 years under certain circumstances.
10 For a more in depth discussion see the previous panel.
11 For a more in depth discussion of productivity see the chapter entitled "People, Technology, and Productivity."
12 In this panel, "married" means "married, with spouse present."
13 Individual proprietorships are unincorporated businesses owned by an individual. Self-employed people are included in this category.
14 2001 data not available at time of printing.
15 Figures based on median weekly earnings.
16 Many business expenses and half of the self-employment tax are deductible.
17 The percentages in the column "Purchased on own" for the traditional employees include those that have coverage through their spouses or other family members.
18 This was the last year the Economic Census reported on home-based businesses.
19 Percentages may not total 100% due to rounding and some businesses not reporting.
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