Editor’s note: This article was first published in June 2013. The 69% figure, the survey of more than 6,000 US entrepreneurs, and the shares of unpaid family helpers (23%), family on the payroll (21%) and those expecting to hire over five people (37%) are from then, as is Richard Branson’s “more than 200 companies”.
When American entrepreneurs decide to start a business, contrary to what you might think, they don’t begin with a luxurious office in New York’s financial district. According to the latest Global Entrepreneurship report, 69% start their business from home. The study interviewed more than 6,000 US entrepreneurs: most of them were just starting their business, others had already been working from home for three years, and others had already made the leap to renting an office or setting up in commercial premises.
The model entrepreneur for many is Richard Branson, whose company was born in his own home and who, years later and with more than 200 companies created, still says he doesn’t need an office and runs his businesses from anywhere in the world with nothing but his laptop.
(Read: 8 tips for starting a business from home)
Most new entrepreneurs don’t look for outside investors or venture capital, because they say they would feel under pressure to deliver results. Starting this way, the investment is minimal, and with dedication and perseverance the results come.
23% have an unpaid family member (at least not on the payroll) helping temporarily until the business gets going. 21% have one or more family members on the payroll. 37% expect to hire more than five people in the next five years.
And so the new smart American entrepreneur is born: someone who takes advantage of the new services offered by the technology age and of the new companies emerging to help us outsource parts of the business, such as payroll, taxes or legal obligations, as well as a virtual assistant for occasional needs.
What are the advantages of starting a business from home?
Many of these entrepreneurs say the main advantages are independence and low start-up costs, since you can take things more slowly without worrying about how you’re going to cover the bills that come with an office.
Once the business starts growing, that’s when we can consider investing in it or looking for investors, not least because we then have a business that’s already up and running, and investors take that very much into account when negotiating the terms of their investment.
There are companies that rent out offices by the day or by the hour, for when we need to receive an important client or meet with our freelance collaborators.
The big advantage today is that part of our sales, or at least one way of making our product or service known, can be done online, and nobody knows whether our company is based in our living room or in an office building.
As we explained in our article “Differences between Hispanic and American entrepreneurs“, Hispanic entrepreneurs still find it hard to feel like real business owners unless they have a company with an office and a secretary.
Times have changed, the rules of the game have changed, and now any initial debt has to be measured down to the last millimetre. Not every business can be started at home, but if an idea can be started in our own home, why not start there?
Further reading
- How to start a business with no money
- 9 marketing strategies for small businesses on almost no money
- 6 no-investment business ideas for young entrepreneurs
Featured image: User:David Shankbone, CC BY 3.0, via Wikimedia Commons.
