Rising numbers of home enterprises are changing Britain's economic landscape. We explore the benefits of escaping the nine-to-five grind to run your own business from a spare room or garden shed

After a four-year campaign Emma Jones, founder of home business website Enterprise Nation, has got what she wanted—a day in recognition of home workers. Home Enterprise Day on November 20 will form part of Enterprise UK's high-profile Global Entrepreneurship Week, sitting alongside days dedicated to women's and social enterprises. Jones believes the recognition is not only an opportunity to publicly raise the profile of people who have set up businesses from home, but a chance to air her grievance with government. She claims it is not doing enough to give these entrepreneurs the support and resources they need.

"In our Home Enterprise Report 2009, we will call on the government, again, to say 'you can't ignore this sector'," says Jones. "Over 60 per cent of businesses are now started from a home base, and the annual turnover of a home business is around £50,000—it's not just pocket money. We're seeing these businesses growing through outsourcing and subcontracting work to freelance colleagues—they're increasing turnover not headcount—yet government contracts, business support, loans and grants are geared towards businesses employing people."

Coincidentally, National Freelancers Day falls in the same month. On November 23, the Professional Contractors Group (PCG) will discuss with experts how Britain's 1.4 million freelancers, contractors and consultants are influencing change as the way they work becomes more sophisticated. The PCG feels that the self-employed are being short-changed by government. One in seven UK workers have chosen to work for themselves, "doing whatever it is they do well", the group says, without wanting or needing to "grow a business", yet they've fallen foul of tax measures such as IR35 and S660A. Both Enterprise Nation and the PCG see this month as an opportunity to bang their drum a little louder.

As any office-based employee who has worked from home will know, it can be a positive thing. Home working enthusiasts will point to benefits such as higher efficiency, a better work-life balance, increased flexibility and a more motivated worker.

Jones claims there are further advantages. As founder of two businesses from home offices, she's well versed in them. For most individuals, cost is the biggest motivator. Operating from a spare room, attic or shed is not only convenient, it means you don't incur extra costs for rent or travel. With no commute, you're saving precious time.

"We've calculated that if you drop a daily commute of 60 minutes each way, you can save up to one extra day every week, which does add up." For many, the key benefit is having the chance to keep a decent work-life balance or, as Jones calls it, "work-life blend".

In the south east, more than half of start-ups are based in the home, says John Grange, a Business Link adviser. The July edition of the South East Business Monitor reported that the strongest driver for operating from home is cost, not lifestyle. Of 437 home-based SMEs, 53 per cent said the ability to keep costs low was their chief reason for home working. Maintaining a good work-life balance was an advantage for at least one in eight. "If you talk to them about why they're starting up a business at home," says Grange, "it's because it's the logical place if you're short of money."

But this phenomenon has wider implications. Dr James Bellini, director of content for The Talent Foundation, which will contribute to the PCG's webcast this month, reckons the next 10 years "could witness one of the biggest societal shifts since the industrial revolution; the emergence of a networked society will see fundamental changes to the way we work".

Home-registered businesses, agrees Jones, have an impact on society, the environment and the economy. "It's a sector bringing economic benefits (operating on low costs, they're increasing profitability and bringing new products to market), social advantages for parents staying at home to be with children, and environmental value because people are staying off roads at peak times."

Working from home not only gives a lifeline for those who have been made redundant, home-based enterprises are also more robust than their larger, office-based counterparts. South East Business Monitor says nearly four out of five are confident of surviving the recession.

Is this halcyon existence too good to be true? On an individual level, Grange notes, if you're going to work from home successfully, you need to think carefully about disadvantages. "You can find yourself getting totally immersed in it [work] and always finding some work to do. It can be a drain. There's also the isolation, the unsociable hours. It can become a slippery slope."

Jones agrees that isolation is a common problem, but "there are online forums that people can go to, to find people who are doing the same as themselves. Also, there are offline gatherings—lunches, conferences, networking events—where you can meet people. That's where out-of-home office spaces such as the IoD come in," she says.

If you've planned what you need to work from home, she adds, there's no reason why it can't succeed. Her advice? Dedicate space to your enterprise. "Some people say when they work from home they never switch off. If you find a space you can walk away from at the end of the day, you feel that sense of work and life separation."

Jones also suggests getting your technology organised. Cheap and powerful IT has made it easier for more home enterprises to launch. "It's now as simple as a mobile phone and a laptop, but make sure you use all the free applications that are out there," she says.

But for society, what will be the long-term effect of thousands of people leaving the workplace to work from home? Grange asks: "How will this affect the economy? Take it to extremes—what happens to transport, the service industry, the local sandwich shop? I don't know."

So while there are economic and environmental benefits, there are also repercussions: what happens to corporations when the entrepreneurially minded among their workforce start up on their own? What is the effect on workplace culture when there are fewer people to interact with and learn from around the coffee machine? Our smooth transition into the next industrial age depends on how well we answer these dilemmas.

Gift of a five-to-nine job

Who Barbara Steadman
What www.anothergorgeousday.co.uk
Advice Get support from your family

Barbara Steadman is what they call a five-to-nine worker—she has a part-time job as finance director in a local college by day and runs her online giftshop at home in the evenings and at weekends. Feeling the need to do something completely different after maternity leave, she cashed in an endowment to fund a home enterprise. With the help of Women in Rural Enterprise and a Web design company, she's been in business for a year.

As a mother of two young children, she reckons flexibility is the best thing about home working—she can put in the hours, but on her terms. Being her own boss also appeals: "I don't have to get people's OK, I make a decision and make it happen. You move quickly and test the market," she says. "I like the variety—I do the PR, the website, the accounts, the packaging, the shows. It's a business that I'm excited about."

Because Steadman's a college director, she had to get her employer's permission to start a business. But the college benefits from her new skills. "It's enhanced my role," she says. "I get involved in the small-business forums, which helps the college because they're learning what training [small business] people want from them."

In 18 months' time, Steadman expects to commit to her business full-time. Family support has been crucial, and she couldn't do without her network. "I meet up once a month with another group of ladies who run their own business. We discuss how we've moved on. You get their perspective."

I do mum things as well as work

Who Emma Warren
What Portfolio Directors
Advice Give yourself space and time

Having co-led a management buyout as finance director and gained IoD chartered director status, Emma Warren is well placed to advise SMEs on how to develop strategic thinking, install best practice, manage accounts and network effectively. "There's a real energy in the SME market in the south west," she says. "Because they tend to be home-grown, owner-managed businesses they're not big enough to take on a full-time finance or strategy director. But firms with a turnover up to £7m benefit from that [level of support] at an early stage."

Warren runs her £200,000-turnover business with a co-founder and three other employees from a garage at home, but it started off "from a laptop on a settee". Because she's worked in a big-office environment, Warren says she made sure that she had access to the resources found at larger organisations. From early on, the business had a server "so that everybody could work from home", and the office is fully networked. She says it's easy to take advantage of free software while retailers such as PC World will set up a home office.

 "One thing I say to people is create space. Set yourself up like you're going to work; give yourself the mindset." And the benefits? "It gives me the opportunity to do mum things. Setting up a business is hard but this way I can work long hours and be flexible. I can have tea with the kids and come straight down to work in the office."

Driving a second career

Who John Batchelor
What www.ur1stcar.com
Advice Know what you can do yourself, and when you need help

Having worked in the automotive industry since school, John Batchelor knows a thing or two about cars. When he realised there was no obvious first port of call for young people (and their parents) looking for advice on buying a first car, learning to drive and passing the driving test, he spotted a tempting business opportunity. With the blessing of his employer, he began to develop a website in the evenings.

A graphic designer friend helped Batchelor devise the site. "I could have learned [Web design] but it probably would have taken 10 years and someone else would have got there first," he says. "So I decided to concentrate on having the clever ideas, and found a cost-effective way of getting it working."

Batchelor says he would probably miss the everyday personal contact if he was working on ur1stcar.com full-time—"sending emails to people isn't the same"—but he gets a lot of satisfaction out of the start-up, which is different to his 9-5 job.

"Starting something from scratch, coming up with the idea, developing it—it almost didn't seem like work because it was so unlike my day job," he recalls. The challenge now is to commercialise the website further: "What I'm looking to do is develop contact with people who offer products and services that will be of interest to visitors and develop those.
When they buy, I get a commission."

Working from a spare room at home, he says it's important to maintain a distance between his two roles. "I separate them as rigidly as I can. And the two seem to work quite well together," he says.