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Introduction
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Home-based businesses are a pervasive yet poorly researched part of Australia's economy. The ABS has estimated that in 1997 there were some 600,000 home-based businesses across the country (Characteristics of Small Business 1997 (ABS Cat 8127.0)1998). This is almost half the total number of businesses the ABS estimated existed in Australia at the time.
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With an average of some 2 employees per home-based business, we estimate that Australian home-based businesses employ over 1 million people.
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We look forward to reviewing information to be released in early December by the ABS to see if there is any trend data available to support the perception that the numbers of home-based businesses, particularly those started by women, are growing rapidly.
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Research suggests that home-based businesses are pervasive. Two omnibus telephone surveys in Victoria in 1997 both estimated that 12% of households (or one in every eight households) in the community host a home-based business. This proportion coincides (using a very different methodology) with the 1997 ABS estimates. It is worth noting here that the official number of home-based businesses in any given local government area is in the order of hundreds rather than the thousands that these pieces of research would indicate. This helps explain the significant under-enumeration and associated lack of recognition of the home-based business sector.
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The survey under discussion in this paper gives some insights into why home-based business is of interest to regional development agencies.
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Firstly, it is clear that home-based businesses are a significant force in local and regional economies. Over 66% of respondents to our survey (70% on the Sunshine Coast) were employing people full-time. Employing businesses had on average 1.8 part-time staff and 2.2 full time staff. 1.5 people on average worked full time but unpaid and 1.3 people part time but unpaid. 20% of respondents intend creating new jobs in the next 12 months - a figure on par with the broader small business sector.
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So home-based businesses represent substantial economic development horsepower in local and regional economies. However, supporting the development of these types of businesses involve inherent challenges. In this paper we explore the components of these development challenges and offer a model approach which could help to address some of the key development issues. We also give an example of this model in action drawn from our own recent work.
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