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A home business (or "home-based business" or "HBB") is a small business that operates from the business owner's home office. In addition to location, home businesses are usually defined by having a very small number of employees, usually all immediate family of the business owner, in which case it is also a family business. Home businesses generally lack shop frontage, customer parking and street advertising signs. Such businesses are sometimes prohibited by residential zoning regulations.
The prospect of working from home has gained credibility over the years. Home offices can now compete with small commercial businesses and save on rent in the process. It may also be possible to tax deduct some of your home expenses while running a home based business. Faxes, high speed internet connections, dedicated home telephone lines, and cell phones help to make a home-based business a reality. Earlier home businesses had been where families lived on the second floor of their house while converting the first floor into a store, where upon close of business they would secure the first floor and retire to the upper floors. This type of home business is still done in some rural areas. Many home businesses are started off in a much smaller capacity whilst the owner is still employed elsewhere, and then expanded once they are proven to be profitable.
The concept of home-based business, as opposed to the previous terminology of "cottage industry", first appeared in 1978. The phrase was coined by Marion Behr, the originator of a study to find out what businesses women throughout America were carrying on in their homes. The preview edition of Enterprising Women wrote about the search to gather information pertaining to home workers throughout the nation. Numerous magazines and organizations helped to disseminate information regarding the study. Ultimately 40,000 letters were received, many indicating the problems the respondents experienced while carrying on businesses from their homes.
The problems were analyzed and confronted in two ways. In 1980 the National Alliance of Homebased Businesswomen was founded to combat the isolation expressed by the respondents as well as to fight the laws which made conducting their businesses difficult. Then Women Working Home: The Homebased Guide and Directory by Marion Behr and Wendy Lazar was published. It contained the stories of many women who ran home-based businesses throughout the country in many diverse fields, as well as information on business formation, conduct and compliance with the law. It sold 50,000 copies. During this time many national magazines wrote about these issues. At the White House Conference on Small Business in 1986, one of the major resolutions was a recommendation favoring lifting restrictions on home-based business.
The number of home businesses continues to grow due to the increases in technology. In Great Britain, 8 million people were running an online home-based business as of April 2013.
Licensing requirements for home-based businesses in the United States vary based on industry and location.
Expanded home-based businesses
Numerous businesses, initially started as home-based, have expanded to become significantly larger operations. These include:
- Apple Inc., started by Steve Jobs and Steve Wozniak from Steve's garage
- Hewlett-Packard, whose original location is now a museum, the HP Garage
- Amazon.com, internet retailer founded by Jeff Bezos
- C. Jeanne Heida (April 25, 2008), Can I Start a Business in My Garage?
- Phillips. "How to run a Business from Home". theGuardian.com. Retrieved 28 October 2014.
- Jersey Woman, Sept/Oct 1981 p. 45
- Changing Times, May 1984, At Work, p. 26
- NJ Success, Sept 1982, The Businesswoman
- Family Circle, July 1981, Gerri Hirshey p. 80-83
- Jersey Woman, Sept/Oct 1981 p. 45
- Testimony:US Labor Dept (rm 2508) Jan 25, 1984
- US Senate, Committee on Labor and Human Resources. re: S2145 Proposals to amend Fair Labor Standards Act:Testimony of Sen. William S. Cohen, Mary Clement, Audrey Pudvah, Sol C. Chaiken, Marion R. Behr, Cora Lee Kern, Mark De Bernardo; February 9, 1984
- WWH Press, 1st Ed 1981, 2nd Ed 1983
- Handmade, Fall 1892
- Parents, Sept 1983, Enterprising Mothers, Phyllis Gilles p. 47,54
- Changing Times, Running a Business from Home, Feb 1983, p. 26, 51
- Inc, Oct 1984, Home is where the work is, p. 39
- New Woman, Jan 1985, Who’s News, Vivian Doering, p. 20
- Proceedings of the White House Conference on Small Business 1986, Resolution 21
- The Telegraph, 8 million Britons run online home-based businesses, April 2013
- NicoleD. "Licensing Requirements for Home Based Businesses". sba.gov. Retrieved 13 May 2014.