39% of Scottish businesses based at home

February 10th, 2015 Category: Commercial

A significant proportion of Scottish businesses are based at home, new research has found.

A report published by the Federation of Small Businesses (FSB) revealed that home-based firms also sustain around one in five private sector jobs and turn over £19.7 billion a year.

Of the 188,000 home based firms in the country, two-thirds employ at least one other member of staff.

Professor Colin Mason from the University of Glasgow was one of the people who carried out the study, along with Dr Darja Reuschke of the University of St Andrews.

The catering, leisure, tourism, hotels and entertainment industries accounted for the highest proportion of home based businesses.

Some 1,000 businesses were analysed. Of those, 39 per cent were home-based and an additional 19 per cent were owned businesses that grew out of the home.

Speaking about the findings, professor Mason said: “Policy makers 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 ten per cent of private sector turnover and 17 per cent 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.”

For the majority of those firms examined, home is seen as being the permanent base for their operations.

One of the most common reasons for being based at home is due to the cost, cited by over half (56 per cent) of firms.

Over a quarter (27 per cent) said they wanted to avoid commuting.

However, although working from home has obvious advantages, it also has a number of disadvantages, as it makes it more difficult to interact with clients on the business premises, and makes it harder to keep track of and monitor staff members.

Therefore, for the majority of firms, investing in office spaces will continue to be the most practical solution.