Price, Victoria Sian (2023) Home-based business performance: A study of geography, gender and small business growth in the UK. University of Southampton, Doctoral Thesis, 274pp.
Abstract
With nearly half of all small businesses in the UK now located in or run from the home, it has become arguably the most important of all business locations (Mason et al., 2011). Home-based businesses are of significant interest to those studying the changing nature of work and home and the blurring of the traditionally separated workplace and domestic environments (Reuschke, 2015). Digital technologies, outsourcing and the reduction in importance of economies of scale have become key drivers of business formation in the home (Young, 2015; Reuschke and Mason, 2022). This in turn has moved the location of a significant amount of economic activity out of regional and business clusters, and into the home and its surrounding residential neighbourhoods – often to rural or suburban areas - a trend that has been accelerated by the COVID-19 pandemic (Davies, 2021; Phillipson et al., 2020).
Despite the proliferation of businesses based in the home over the last 20 years, there is only a small (but growing) academic literature which has studied this phenomenon, and very little specific policy attention has been given to these enterprises and their owners. Contemporary research has however revealed their high growth ambitions, highlighting the potential value of home-based businesses for job creation and local and national economies (Mason et al., 2011; Enterprise Nation, 2014). However, this literature has also highlighted that women-owned home-based businesses face significant and gendered challenges in growing their businesses, and may face a ‘performance penalty’ compared to both men/co-owned home-based businesses and women who run their business in a separate premises (Breen, 2010; Daniel and Owen, 2022).
The lack of high-quality, longitudinal and generalisable data available on home-based businesses has led to many untested hypotheses on whether, how, where and for whom home-based businesses can achieve business growth. In turn, this has isolated home-based businesses from key discussions in the small business literature, entrepreneurship and economic geography. In particular, how the location and geographies of home-based businesses and their operations
across different spatial scales may impact on their performance and how gendered business performance may be embedded within both the home and its surrounding neighbourhoods, cities, and regions (Reuschke et al., 2015; Kleinhans et al., 2017).
Combining theories of gender and enterprise from the small business literatures with socio-spatial theories from economic geography, this thesis presents a comprehensive quantitative study of the business growth and performance of UK home-based businesses from 2015 to 2019. The analysis and findings presented in this work utilise the UK Longitudinal Small Business Survey as the primary data source, with additional linked data from the Business Structure Database.
The thesis makes several contributions to academic scholarship. First, the research highlights home-based business performance across multiple measures – firm size, innovation, profit, exporting, and derives a novel typology for understanding the distinct growth strategies of small businesses located in the home. Second, the analysis is able to distinguish, for the first time, the difference in job creation potential between businesses which remain in the home and those which relocate into a separate premises. Third, the research makes a significant contribution to gender and enterprise and women’s entrepreneurship research by dispelling myths and revealing the spatial heterogeneity of growth and performance in women-owned home-based businesses. Fourth, the work reveals the geographies of home-based business growth from remote rural locations to semi-urban areas and major cities, highlighting the significance of urbanisation and agglomeration economies for home-based business growth.
Finally, due to the widespread homeworking which public health measures forced employees and the self-employed to adopt in 2020, there is now a significant policy interest in flexible and homeworking arrangements and what implications these will have for the small business sector moving forward (Mutebi and Hobbs, 2022). However, given the paucity of research on home-based businesses and their growth and performance prior to the pandemic, this research provides a much needed base on which to build policies and support for the growing and significant number of home-based businesses operating in the UK today.
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