Once upon a time, the concept of a home-based business often brought to mind the housewife toting plastic containers and make-up solutions door to door. While this type of business proved to be very profitable for some, it also had a limited appeal.

This perception has been quickly changing as home-based businesses have spread into various industries, with a widespread demographic as owners. And, as the U.S. economy is facing a possible recession, the silver lining for the upcoming buying season may come from the tech-purchasing power of U.S. home-based businesses.

 

A recent study by AMI-Partners, a consulting and research firm, found that spending on IT and telecom products and services by U.S. home-based businesses (HBBs) is expected to reach approximately $52 billion.

 

“The home-based business is rapidly becoming a significant sector that vendors need to pay attention to,” says Antara Jaitly, Senior Analyst at AMI, in a Thursday statement. “More people may look to operating a home-based business as a means to supplement their income or fulfill personal aspirations.”

 

According to Jaitly, “The approximately 15 million PC-owning U.S. HBBs are expected to drive $32.7 billion in IT spending during 2007 with a projected increase to around $35 billion in 2008 and $19 billion in telecom-related spending in 2007 which is forecasted to increase to $19.5 during 2008.”

 

Robert Takacs, Vice President at AMI, also noted in Thursday’s statement: “These HBBs plan to spend on a wide array of hardware, software and telecom-related products and services ranging from PDAs and smart phones to PCs, printers, software applications, security and storage products and high-speed broadband services.”

 

Vendors including HP, Microsoft and Dell tend to resonate well with these HBB owners. Google (News - Alert) also scored high marks in online services. For those utilizing the retail outlet for PC purchases, retailers such as Best Buy, Staples and Office Depot/Max were mentioned. Almost one out of four HBBs buy their PCs directly from the manufacturer.

 

The HBB market in the U.S. has seen a proliferation of service-oriented businesses. The Internet has played a pivotal role, spurring an increase in the use of websites and Internet-based electronic marketplaces such as eBay (News - Alert), which have enabled small service-focused businesses to flourish.

 

According to the AMI study, the average U.S. HBB owner is highly educated, with over 3 in 5 having at least a college undergraduate degree. These individuals tend to be in their late forties and have been in business for about seven years. More than four in ten mentioned that their HBB attributed to more than half of their total annual household income.

 

“With median HBB annual revenues equaling $62,000, HBB revenues are 30% more affluent than the median U.S. household income of $48,200,” says Jaitly.

 

According to Takacs, “Another noteworthy finding is that a majority of HBBs were started as a result of lifestyle choices. We see four distinct formation kernels driving HBB creation. These reflect the mindset of the founder, define HBB growth goals and illuminate distinct IT spending choices.”

 

“There is a distinct HBB psyche which is a synthesis of the owner profile, buying power and formation drivers. For marketers, understanding this psyche is critical to effectively targeting this segment,” Takacs added.

 

With the technologies available to individuals today, it is likely that the U.S.-based HBB market will continue to grow and play a pivotal role in the technology market. As a result, many companies will do well to focus certain aspects of their strategies on targeting this sector and providing the solutions they need to become and remain successful.

 

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