Motherhood and apple pie profits
Mumpreneur: noun, a mother who starts a business from home.
It's a new word for me at least, and a quick internet search shows it's much better known in the US, as Mompreneur.
But it's a stereotype that's got home-working wrong.
That's according to research from the Hunter Centre for Entrepreneurship at Strathclyde University.
It's Global Entrepreneurship Monitor has done in-depth analysis of home-based business start-ups, and found they represent 58% of the start-up total.
So the office in the back room, or on the kitchen table, really matters as the seedbed for the future of the economy.
What does this teach us? That 69% of home-based start-ups are male, compared with 66% across the UK.
And contrary to another stereotype, nor do they tend to be older.
They are distributed evenly across the age groups, with the exception of those under 24.
Younger enterpreneurs seem to prefer somewhere away from home to get their businesses under way - perhaps because their homes are smaller.
Do they work shorter hours?
No sign of that, when compared with those operating out of separate premises.
They do tend to be less productive in sales per employee, less innovative than office-based businesses, but they do well at exports.
Just over 40% are educated at least to degree level.
Is this phenomenon due to the lifestyle advantages - such as migrants and refugees from the city wanting the good life and a nice view from their Highland croft?
Wrong again. Most home entrepreneurs have lived in that home region all their lives - it's a much stronger link than you find with people doing the same in other parts of the UK.
Jonathan Levie, the academic who co-ordinates the research from Strathclyde's Hunter Centre, points out that there's a problem here for those who rent their homes.
The model secure tenancy lease says that tenants are not allowed to operate a business from their homes.
It says they can ask permission, and that may be granted, but it could raise the rent.
So council tenants, who are probably more likely to face redundancy, are typically being told by their landlords that they can't set up a home-based business.
Nearly 60% of start-up businesses are home-based. And yet the council is now responsible for local economic development. Go figure.
That rural factor in business start-ups is also highlighted in the latest GEM report.
It's looked into the best (or least bad) areas of Scotland for business start-ups.
It looks worst (or least good) in Lanarkshire and Ayrshire.
The better figures are to be found in rural Scotland and Edinburgh.
Dr Levie is clear why that is, even though this can be a contentious subject: it's migrants into these areas that bring entrepreneurial skills and drive with them, and they're the ones making the difference.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ´óÏó´«Ã½ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 23rd Sep 2009, bizziebusy wrote:I have been working in the publishing industry for a few years now and noticed a dramtic change in relation to the working environment. Many more people are combining working from home and office, and many of my colleagues have branched out and set up a business from home. As they say overheads are low, but working hours are longer than ever. When you search the net so many women setting up informative and helpful websites for like minded parents such as babyhedgehog, madeformums, netmums, bizziebaby, whattodowiththekids, and so many more. They have been an inspiration to us all and a life saver with help, advice and reviews on products we are researching or even checking out before making a purchase.
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Comment number 2.
At 24th Sep 2009, nedafo wrote:Douglas
Your blog is interesting but I'm not sure if the growth of home businesses is necessarily a good thing. Let me explain why. I think that one of the major problems facing the Scottish and UK economies is the trade imbalance. Our economy is based too heavily on the service sector, we import too much goods and don't make enough stuff that other people want. I suspect that most homebased businesses are involved in the service sector and I doubt that most of them either (a) produce anything for export; or (b) have the capability of turning into high growth business which will end up producing stuff for export or employing lots of people
It reminds me a bit of all of the statistics produced by Scottish Enterprise in relation to start up businesses. They look impressive but when you look behind them you find out that they mostly comprise of tradesman who have started up one man band business etc. Now, there is nothing wrong with this per se and I am not denigrating one man band businesses or home businesses. They should be encouraged. The point however is where are the industries that are going to drive us out of recession and create jobs.
There was a great spoof article on the Daily Mash website a few months ago which sums up the whole thing. The headline was along the lines of "Tesco to set up a supermarket in everyone's home". Where is the wealth creation for the country?
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Comment number 3.
At 25th Sep 2009, HootsMon wrote:Having been a self-employed one-man-band for 12 years, I'd like to add my own take on this . . .
First off, I should point out that, after those 12 years with RBS as my bank, I got called in suddenly and told to pay off my overdraft immediately, so I was forced out of business. Turns out that was the same week that RBS were "hours from collapse" and so for less than one month's worth of Fred Goodwin's pension (I refuse to call him "Sir") I was turfed out of business.
However . . . once clear of my personal bankruptcy period (thank God for the one year LILA's in Scotland) I intend to be back. And because I intend to be a one-man band again, I'd like to explain why this desire to be and remain a one-man band is so important to us who do it:
Put simply - why should we employ anyone? To do so immediately forces you into a veritable sea of red tape, regulations and downright interference from all kinds of "authorities". Why bother?
At the end of the day, self-employed one-man-bands (or one-woman-bands, please excuse my stereotyping there) do it for one reason - to look after number one. That may sound selfish, but I'm 48 and nobody will give me a job now, other than a low paid menial one stacking shelves, so let me ask you this - if I go to all the trouble, risk, hassle etc etc of setting up my own business, why should I then go and give a job to someone - someone who will require guaranteed monthly payment with none of the personal risks that I face as the small employer?
No thanks. Things are bad, and its look out for number one time. Leave the well-paid academics, politicians and bankers to worry about the wider economy and strategic issues such as manufacturing. Meantime, the rest of us are only interested in survival.
And as for councils not allowing tenants to operate a business from a council house, well. . . since when did anybody who ever worked for a local council know ANYTHING about business?
As a sole trader businessman, I have always been utterly shocked at the profligacy of the people who work in councils - they simply do not understand the value of money.
My attitude may sound greedy, in looking after number one, but don't tell me that this is not the single motivating factor that is essential for any businessman or woman. They do not set out to start up a business to create jobs - these are merely a by-product to the absolutely essential main aim; to make money for themselves.
Why, in this country, do we sneer at this essential quality?
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