Home is where the market is

One of the big mistakes that companies make when selling to small business, is misunderstanding the home-based business owner.

In fact I have banned the use of the term. It is totally misleading as it puts an enormous band of very different people in one basket. It also fails to take into account how technology has transformed this sector.

This was brought home to me (pun totally unintended) when I read some survey results from The Small and Medium Enterprise Research Centre at Edith Cowan University. They had done some research into Australia’s home-based business sector, based on a survey of 1,604 business owners.

The traditional image of the home based business owner is a woman in her gym gear making a bit of money on the side to pay for an overseas holiday. But guess what? About 55% of the businesses run from home are started by men. About a third of the men work more than 50 hours a week and many of them employ staff.

I am sure that any follow-up survey will find that a lot of these men and women soon move out to hire more staff and grow larger businesses.

We know this is the case from research we do into fast growing companies: nearly half of them are started from home.

The problem comes when marketers lump these people – I call them the home-based business builders – with the small business owner who will always work from home and run a micro business. The two groups could not be more different yet they are often marketed to in the same way.

The builders are using the home to keep their costs down in the early stages but they have every intention of growing a larger business. The nesters are happy at home and have no intention moving out. In fact they will manage their growth so the business does not get too big. In fact 24% say they do not want to grow at all – or even get smaller!

So the message for marketers is to do further research into this market. New sub-sets are emerging all the time including the part time entrepreneur who has a small business they run at night. Or the teenage entrepreneur who runs their own computer business in their school holidays and when they should be doing their homework.

And one more thing: let’s ban that awful marketing phase SOHO – small office home office from – the English vernacular.