Scotland business

Half of all Scottish businesses 'based at home'

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Home-based enterprises account for half of all Scottish businesses and sustain nearly one in five private sector jobs in Scotland, according to new research.

A report by the Federation of Small Businesses suggested home-based firms turned over a total of £19.7bn a year.

It found the biggest concentrations of home enterprises in catering, leisure, tourism, hotels and entertainment and providing business services.

Smaller clusters were found in creative services and construction.

The federation studied data from about 1,000 business owners north of the border, 39% of whom were home-based and a further 19% owned businesses that grew out of the home.

The report found that just over half of Scotland's 188,000 home-based businesses had been established for 10 years or more.

Nearly three-quarters of these enterprises turned over less than £100,000 a year, and 3% generated more than £500,000.

The research also indicated that almost two-thirds of home-based businesses employed at least one member of staff.

'Acacia Avenue'

The study was conducted by Prof Colin Mason from the University of Glasgow and Dr Darja Reuschke of the University of St Andrews.

The report argued that local government, regulators, banks and enterprise support agencies should adapt their approach to better meet their needs.

Prof Mason said: "Policymakers have been slow to appreciate the importance of home-based businesses to the Scottish economy.

"This report shows that Acacia Avenue is as much the home of entrepreneurship as any business park.

"These are serious businesses, accounting for 10% of private sector turnover and 17% of private sector employment.

"If our economic salvation lies in broadening and strengthening our small business base, we ignore their contribution and their needs at our peril."

'Home truths'

FSB Scottish policy convener Andy Willox said: "This report tells some home truths about how important this army of businesses is to our economy.

"Some people start up in the home to supplement their household income and work around other commitments, while others are manufacturing, trading internationally and turning over hundreds of thousands of pounds a year.

"Three key factors have powered the growth in home-based firms: new technologies; large public and private sector re-organisations; and everyone's changing expectations about a work-life balance.

"But they are all proper businesses, providing services and generating revenues. Many are also creating jobs.

"The sheer scale and diversity of this sector means that regulators and local authorities need to make sure that their policies and regulations are right for those based in the home."

He added: "We also need to tackle these firms' biggest bugbears: unreliable broadband and a lack of suitable finance products. "

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