Home-Based Firms, E-Commerce, and High-Technology Small Firms: Are they Related?

This article demonstrates the importance of home-based businesses to the U.S. economy. These firms produced 10% of all receipts of the small-business sector in 1996, and their numbers have grown rapidly. This article examines what kinds of businesses are being run out of the home but concentrates on the subset that may be called truly entrepreneurial: the firms that gross at least $1 million and have employees working in the home. Different sections of this article contrast the characteristics of firms run out of the home with the motivations and backgrounds of their owners. The influence of the Internet on these entrepreneurial firms is also explored, as well as regulations that may be preventing a faster expansion of home-based activities.