Stand Up And Be Counted

Trying to determine the number of homebased entrepreneurs.
Magazine Contributor
3 min read

This story appears in the December 1998 issue of Subscribe »

Homebased business owner. Seems like a simple enough term, doesn't it? Well, apparently not for people trying to determine the number of homebased entrepreneurs in the United States.

Depending on the source, there are 10 million to 50 million U.S. homebased entrepreneurs. So what's the problem? In this age of space walks, fiber optics and e-mail, why can't anyone come up with a single, accurate figure?

"There are a lot of answers to that question," says Tom Miller, vice president of the Internet Strategies Group for Cyber Dialogue (formerly Find/SVP), a New York City-based Internet research firm generally credited with producing the most accurate homebased business figures. "[The homebased market] is notoriously difficult to measure, in part because people frequently start businesses that are here today and gone tomorrow." Also consider the problem of people operating multiple dbas from home--according to Miller, these people dramatically over-inflate the trend.

Definition is another sticky issue, says Joanne H. Pratt, owner of a homebased management consulting firm for telecommuters. "A lot boils down to self-image. Sixteen years ago, [many homebased businesspeople] thought of their business activities as a hobby," Pratt explains. "But that's changed."

Numbers are also often skewed by professionals such as architects, lawyers and doctors who work from home but don't consider themselves "entrepreneurs." Others who may not assign themselves the label of homebased business owner include independent contractors and people whose second career blossoms into a full-fledged business.

While survey respondents may be confused by classifications, the researchers themselves grapple with another serious restriction: budgets. "Everybody wants a number," says Miller, "but not many will pay for it."

What about the government? Isn't it the government's job to collect statistics? Not necessarily, says U.S. Census Bureau demographer Phillip Salopek. "Competition to get questions on the Census is fierce, so the only things that end up getting on are those that are [legally] required," explains Salopek. Consequently, unless a federal agency needs the data to operate a program or Congress mandates inclusion, questions about homebased businesses won't appear on the Census.

But this doesn't mean the government won't collect the information. The questions can be included on the monthly Current Population Survey . . . for a price. Salopek says that while the point of this survey is to calculate unemployment, private organizations can and do pay to have questions added. But there are limits, he warns. "The survey is a sample of 50,000 households, and at that level, you won't get reliable data," says Salopek.

The bottom line? We need accurate numbers to clearly demonstrate the impact this sector is having on corporate America and our individual communities. Before we can determine these numbers, however, someone must be willing to step up to the plate and finance a survey that's large enough and detailed enough to clear up all the confusion.

*19.6 million self-employed people work from home.
*54.6 million people do some job-related or income-producing work at home.
(source: cyber dialogue)

Contact Sources

Cyber Dialogue Inc., (212) 255-6655,

Joanne H. Pratt Associates, (214) 528-6540,

U.S. Census Bureau, (301) 457-2454.

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