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Published in Home-Based Business News, Fall 1995
Tabloid Newspaper

Home-Based Businesses Rise 16 Percent in a Year

By Sam Vigil Jr.

The estimated number of home-based businesses in the Portland-Vancouver metro area jumped 16 percent in the past year, according to a rough survey by Home-Based Business News (HBBN), nearly doubling the previous year's increase of nine percent.

While hard numbers for home-based businesses are difficult to ascertain, many home businesses are licensed within their respective communities. But city officials continue to indicate that an even larger number are not licensed.

According to HBBN's survey of the licensing departments in 12 communities in and around Portland, the number of estimated home businesses is up about 16 percent, to 25,066, up from 21,608 in the same 12 communities in a survey conducted last year. (As of press time, home-based business figures were not available from the City of Portland.)

The total number of licensed businesses is up only 8.75 percent from 54,207 in 1994 to 58,967 in all 13 communities, including the City of Portland. The total number of licensed home businesses is up 12 percent from 6,878 to 7,700 for the same 12 communities surveyed last year. The 1994 survey showed a 13.5 percent increase over 1993's figures based on 13 communities.

Ascertaining these statistics can be a somewhat tricky business. Although nearly all the communities surveyed require home-based businesses to be licensed in some manner, most don't formally keep track of these businesses, either just lumping them in with all commercial and retail businesses, or tracking only "home occupations" if the licensee classified the business as such. In Beaverton, for instance, a licensing official said they know most of the city's businesses are home based. But unless the applicant checks the "home occupation" category, the city doesn't know if the business is home-based. Applicants frequently choose other categories, such as "wholesale," the official said, that describe the type of business, whether or not it is home based.

Many communities just aren't keeping track of home-based businesses, and many officials are reluctant to hazard a guess for any number of reasons. While officials were usually able to come up with the total number of business licenses issued, most were unable to give accurate figures for the number of licensed home businesses. The reason cited most often was that the tracking software wasn't flexible enough to readily spit out the numbers in these requested categories even if applicants could choose to list a business as home-based.

On the other hand, new software is helping some achieve hard numbers. The City of Tigard's figures, for instance, were spewed out by new software that has been installed since last year's survey making records of renewals more up to date. When compared with last year's 3,500 business licenses, 1995's figure of 2,488 appears to show a decrease in the total number of current business licenses. Tigard's licensing officials, however, say that last year's figure was probably inflated by including businesses no longer in existence that had not been removed from the paper-based record keeping system. Home-based businesses, however, show an increase of 32 percent to 593 home occupations, one of the highest, over last year's 450.

Other communities, such as Gresham, openly encourage home-based businesses and are therefore actively tracking home-business numbers.

The survey also shows that the number of licensed home businesses may not increase at the same rate as retail/commercial businesses. In Oregon City where the total number of licensed businesses increased by about one-third, the number of licensed home businesses only rose about 15 percent. One reason Oregon City officials gave was that some home businesses moved from a home base to a retail/commercial space, citing examples such as ceramics, crafts and automobile broker businesses.

The largest increase in licensed home businesses may be in Lake Oswego, rising by about 53 percent from 1,400 in 1994 to 2,137, according to one official. The number of licensed home businesses is about half the total of all business licenses, the same official said. That growth seems to be under dispute within the licensing department, since the numbers vary depending on who you talk to. A second official said the numbers weren't that high. But to be sure, both agreed you'd have to hand count from a computer printout of all licensed businesses.

The figures for the area's second largest growth areas, Gresham, include businesses licensed both inside and outside of the Gresham, but are licensed by the city, Gresham licensing officials said. Most of the home-based businesses outside of Gresham are contractors. Gresham's home-based businesses are up an estimated 36 percent from 700 to 950.

Tigard's numbers, as mentioned earlier, are the third highest, rising by 32 percent.

Vancouver ranks fourth with an increase of about 28 percent in licensed home businesses from 1,400 to an estimated 1,700.

When asked why so many cities don't actively track the growing numbers of home-based businesses, Association of Home Businesses (AHB) President Tom Boothe said home workers largely go unnoticed.

"I think part of it might be that by their nature small businesses are disparate, small, discreet and lack a single voice," Boothe said. "At the local level officials don't need to attend to them as they do more organized local entities.

"One of the goals of AHB is to create a voice for the isolated solo entrepreneurs who might otherwise go unnoticed."

This continuing growth trend in home-based businesses is the result of two other continuing trends, according to Z-Axis Marketing's Jerry Fletcher, an AHB board member: "downsizing" and "outsourcing" -- cutting back on staff and hiring outside contractors and consultants.

"The reason for outsourcing (and downsizing)," Fletcher says, "is the need for these companies to be more efficient on paper."

However, the bottom line efficiency is short-sighted, he says. "By focusing on the short-term, companies can threaten long-term relationships," such as potential repeat customers.

Fletcher says companies are discovering the value of the top line -- the overall marketing and sales activities that cultivate long-term relationships and repeat customers. In the process, companies are discovering they need the experts who can deliver top line results. But as a result of downsizing, many of these experts who were once employees are now consultants servicing several companies.

"As those people are only available part time," Fletcher continues, "the company's top line still suffers.

"The smart SOHO (small office, home office) people will develop long-term relationships" with companies who need their services.

And the way to do that, says Fletcher, who is home-based, is to over-deliver. "The real key is that the company gets more than they ask for -- 'undersell and over deliver.'"

Number of Businesses Licenses and
Home Business Licenses Compared

Community

No. of Business License Issues

No. of Licensed Home Businesses

Est. Total No. of Home Businesses

Beaverton

4,688

200

1,500

Forest Grove

250

40

142

Gresham

3,800

950

3,128

Hillsboro

2,193

541

2,029

Lake Oswego

2,137

995

2,884

Milwaukie

1,400

560

2,106

Oregon City

1,600

400

800

Portland

29,887

12,810

24,339

Tigard

2,488

593

2,020

Tualatin

1,080

241

820

Vancouver

6,364

1,700

6,575

West Linn

2,300

1,380

2,760

Wilsonville

789

100

302

TOTALS 58,967 20,510 49,405

 % increase
over last year

 8.75

8.66

11.25

 

 
     
 

 

 
 

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