Home based business sense

Half of all Scottish businesses are based at home, a new FSB (Federation of Small Businesses) study reveals, and these home-based firms sustain 291,000 jobs and generate £19.7bn in turnover – that’s 17% of private sector employment and 10% of turnover.

Believed to be the first in-depth profile of Scottish home-based businesses, the study, conducted by Professor Colin Mason from Adam Smith Business School at the University of Glasgow and Dr Darja Reuschke of the University of St Andrews, dispels many of the popular myths about these 188,000 firms.

As one would expect, the biggest concentrations of these enterprises are in catering, leisure, tourism, hotels and entertainment (24%), and providing business services (12%).

However, they can be found in all sectors and in all corners of the country, for almost anything can be undertaken from the home.

Moreover, more than half of Scotland’s home-based businesses have been established for ten years or more – home is seen as being the permanent location for their operations. Why? Because of the nature of the business (65%), convenience (61%) and to reduce costs (56%).

One in three (31%) specifically highlighted the high cost of commercial premises as the reason for working from home, with the same number citing improved work-life balance (31%) and over a quarter (27%) saying they wanted to avoid commuting.

Finally, many home-based businesses are not local and parochial in outlook but have a much broader customer base than other businesses – with a larger proportion trading nationally and internationally and utilising e-commerce than firms in commercial premises.

This is particularly true in the Western Isles, where the internet is enabling home-based businesses to sell to the world from what have always been considered remote, isolated communities. They are also helping to put the Western Isles on the map.

FSB Member Seamus Morrison of “Sea Harris”, East Tarbet, Harris, sums up what running a home-based business means to him: “My background is in salmon farming and fishing and I have spent over 20 years at sea.

“In 2007 I saw the way tourism was going, with the growing interest in the natural environment, and set up Sea Harris, a home-based business. Today I have customers from all over the UK and beyond and offer trips to St Kilda, the Shiants, Tarransay, Pabbay and Scarp, as well as providing private charters for all manner of purposes, both leisure and commercial.

“Having the right infrastructure is vital to the Western Isles economy and top of the list must come broadband. I receive most of my bookings online and waste far too much precious time downloading and uploading even simple emails.

“With faster broadband, communication becomes so much easier and it makes the world a much smaller place. If we want to encourage small, home-based businesses to set themselves up and bring fresh life to our communities, then blanket high speed broadband coverage throughout the Western Isles is essential.

FSB Highlands & Islands regional chairman, Amanda Frazer, commented: “Home-based businesses clearly have vital roles to play in the economy but their importance has not been fully appreciated by policymakers.

“Our report argues that local government, regulators, banks and enterprise support agencies can’t ignore them and that they should adapt their approaches to ensure that they better meet their needs. This includes reliable broadband for all and improved finance products.”