Home-Business Research & Reports

A 2001 national survey revealed that art/craft businesses were contributing up to $132.8 billion per year to the nation's economy. Read summary report on the National Craft Association's website.

Home-Business Research and Reports

New national survey (February 2004) finds nearly 60 percent of homebased business owners are without insurance. According to a new survey of more than a thousand home-business owners commissioned by the Independent Insurance Agents & Brokers of America, most of America's 11 million home-based businesses do not have proper business insurance coverage. Nearly 40 percent of home-business owners say they thought they were protected by some other type of coverage, while almost 30 percent say their businesses are too small to insure. Nearly 20 percent could not give a reason for not having insurance. Click here for the full story . . .or go to IIAA.org and click PRESS ROOM--the link is extremely long and may not work after awhile).

"Proper insurance coverage can protect business owners from losses that can devastate a home-based business," says Madelyn Flannagan, IIABA vice president of education and research. "By not having business insurance, home-based business owners are at risk for significant financial losses associated with theft, accidental damage, natural disasters, vehicle accidents and liability if an employee suffers an injury while on the job or a business guest is hurt while visiting the home-based business. Homeowners' insurance normally does not provide protection in these situations."

(In HOMEMADE MONEY: Starting Smart, you'll find detailed information on the various types of insurance a home-based business owner needs--and where to get it at the lowest prices.)

"Home-Based Business and Government Regulations." This new government report, written by Microeconomic Applications, Inc. and funded by SBA's Office of Advocacy, documents zoning problems of home-based businesses. According to this report, 53 percent of home-based businesses are coping with daunting zoning restrictions from both federal and local regulations. They are also having difficulty in complying with complex and confusing IRS rules for home office and equipment deductions.

The report, which examines state and local regulations in Arizona, California, Illinois, Iowa, Pennsylvania, and Vermont, finds that the most restrictive regulations are at the local zoning level. It also notes that some states have begun to enact legislation supportive of home-based businesses. Vermont, Maryland, and California were cited for such legislation. At the federal level, the report finds that IRS regulations penalize home-based businesses in their treatment of deductions. In particular, claiming a home-office deduction is complex; the depreciation is spread over an unrealistically long time, and returning the space to full residential use generally entails penalties. A full copy of the report is available as a pdf document at SBA.gov; the research summary can be found HERE.

"Strategies for Small Business Success." An excellent report by Joanne Pratt. "Unlike the so-called 'dot.coms,' 65 percent of small niche firms make a profit or cover the costs of their Web sites," says Pratt in the executive summary of this report. "The more innovative entrepreneurs--the early adopters--see the Internet as a way to market niche products and reach distant customers in ways that were not available in the past." You can read Joanne's full report on the SBA Web site or link to it from JoannePratt.com, which provides links to other research reports she has done for the SBA, including a study of 125,000 entrepreneurs titled Homebased Business: the Hidden Economy.

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