Relocating Britain’s home businesses into professional working spaces could create 670,000 new jobs for the UK economy and generate additional profits of £3.3bn, according to a new report into home-based enterprises.
The study, by telecommunications firm Vonage UK and the Centre for Economics and Business Research (Cebr) think tank, uncovered the growing contribution of home businesses, with 2.7m operating in 2017 – up 40 per cent since 2000.
Survey findings found that almost one in five business owners operating from home wanted to relocate their company, expecting turnover to increase by a fifth on average a year after moving.
The leading factor for entrepreneurs eager to move into a commercial property was the desire to professionalise the company. This was followed by a need of a bigger space for supplies and inventory.
Home-based enterprises in London and the South East of England were most likely to seek a new business base, followed closely by those in the North of England and the Midlands.
However, survey respondents cited high real estate costs as the biggest obstacle to relocation.
The study also uncovered subtle differences between business owners keen to find an external base for their company and those happy to stay put. Entrepreneurs looking to relocate on average had 17 per cent higher turnover and employed one more person.
Commenting on the research, Simon Burckhardt, managing director at Vonage UK, said home businesses were often overlooked as an “important driver” for Britain’s economy, but were restricted from realising full potential.
“The home businesses of today are the pipeline for tomorrow’s larger businesses,” he said. “Therefore, it’s crucial to identify the challenges and obstacles preventing them from stepping up and to take the opportunity to address their needs – and meet them.”
He added: “We are at a critical juncture for the country, as plans are underway for our exit from the European Union. We must support our ambitious home businesses in reaching their potential.”
Nina Skero, head of macroeconomics at the Cebr, said the ambition of many home business owners at a time of economy uncertainty was “encouraging” at a time of slow economic growth.
“The findings point to the huge potential of these businesses and we must do more to break down barriers, such as the high cost of real estate, which could hold them back,” he said.
“Home businesses and SME’s are vital to the health of the economy and it’s important that they are given the support to allow them to scale.”
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