|
GCSE / Level 2 Revision Notes
Production & operations -Technology and locating a startup
The widespread adoption of low-cost, easy-to-use information technology solutions means that many entrepreneurs start their businesses at home.
In fact, pretty much everyone who starts a business does so from home, at least whilst they develop the business idea, conduct market research and decide whether or not to launch.
You might be surprised to learn that:
- In the UK, the home is the most popular location to start a business
- More than 60% of businesses are started from home; equal to more than 1,400 each week
- There are 2.1 million home based businesses in the UK contributing £364 billion in turnover to the UK economy (remember that, in total, there are about 4.5 million separate businesses in the UK)
- The highest growth in home business is coming from mums, young people and the over 50’s
- The fastest growing sectors are business & professional services, personal services, online trading, food and domestic energy
- 86% of home business owners want to grow their business, without leaving home.
Running a business from home has various advantages and disadvantages:
| Advantages |
Disadvantages |
Free (or minimal cost). This is the big advantage! Remember that most start-ups are short of cash! |
Requires greater self-discipline – it is easy to get distracted! |
Very little travelling, although customers and suppliers might still need to be visited |
Work is often interrupted – e.g. by callers to the home or by family |
Work can be combined with domestic tasks and responsibilities (e.g. child care). This can mean significant cost savings |
Work never goes away – it is difficult to separate work from home life |
Reduced risk and a lower break-even point for the new business – no commitments to rentals and lower overheads |
Potentially lonely – lack of simulation from colleagues |
Environmental benefits – lower carbon footprint |
Working from home can give a poor impression to potential customers |
You can wear what you like! |
Some hidden costs – e.g. extra household insurance, potentially higher capital gains tax when the house is sold |
Basing a start-up at home is not ideal for every kind of new business, though the statistics suggest that it is appropriate for most. There are several things a start-up can do which makes home-working more successful:
- Dedicating a separate room or area to work. A loft conversion, converted garage or other out-building is ideal
- Home-based entrepreneurs use quiet places such as libraries when they need to do creative tasks (such as writing)
- Coffee shops are increasingly used for meetings and work
- Informal and formal social networks of home-based entrepreneurs help alleviate the problem of loneliness and isolation
|
