The Australian Bureau of Statistics reported the number of
home-based businesses (HBBs) at 856,000 as of June 2004. Of these,
198,700 are located in the state of Victoria (ABS, 2005). The large
number of HBBs helps to support a popular estimate that some twelve
percent of households host a home based business, and this proportion is
likely increasing (Jay, 2003). There is now widespread agreement that
HBBs create significant and meaningful employment opportunities. Indeed,
each HBB is estimated to provide, on average, some 2.8 positions for its
operators and employed staff (Hitech Marketing, 1998). Cognizant of
HBBs' employment generation potential, the Federal and State
governments have taken a keen interest in promoting the sustainability
and growth of the HBB sector (Commonwealth of Australia ,2004; Victorian
Small businesses in Australia comprise a significant proportion of
overall business activity, as is the case in most economies. These small
businesses defined as those employing less than 20 people, count for as
much as 96 percent of the total number of businesses in the country and
provide 42% of existing jobs (Peacock, 2004). In June 2004, there were
an estimated 1.269 million small businesses. Interestingly, the
Australian Bureau of Statistics (ABS) report that that some 67% of these
could be classified as home-based as these businesses are actually
conducted from the operator's home (ABS, 2005).
At the state level, the Victorian Government sought information on
the relationship between local government and the HBB sector across the
state to provide a framework for policy and program development for this
sector specifically. Thus a research project was commissioned by the
Department of Innovation, Industry and Regional Development to survey
the attitudes, initiatives and experience of local government
authorities across Victoria in relation to HBBs in their municipality.
The project's aim was, on the one hand, to determine challenges
facing local government in dealing with HBBs, and on the other hand, to
describe initiatives undertaken to nurture this important sector. This
paper reports on the nature of extent of HBB programs and issues and
problems faced by local government authorities (municipal councils) in
contacting and engaging their constituent home based businesses.
To a significant extent, the interest in home-based businesses (or
HBBs) in Australia as a distinct group within small businesses has
occurred because of better understanding of the small business data as
well as more attention to proper definitions of various sub-categories.
For example, the HBB sector as a group within the small business
classification was not clearly delineated in the past. Peacock (2004)
reports that in 1994, the ABS undertook the first study of HBBs as a
component of small businesses, using the definition of a HBB where
"one or more of the operators of the business worked more hours at
home than away from home". From 1997, the sector has since been
better defined and this definition is still currently in use. For
instance, the ABS (2005) report reflects this definition, and describes
the two classifications of HBBs.
1 "Businesses operated at home": where most of the work
of the business was carried out at the home(s) of the operator(s)
2 "Businesses operated from home.": where there are no
other premises owned or rented other than the home(s) of the operator(s)
These HBB classifications are not mutually exclusive as the data in
Table 1 shows (ABS, 2005):
Home-based businesses have been the target of policy interest from
all three tiers of government in recent years. The Federal government
and most State governments now have a policy on home based businesses.
The strong interest in HBBs on the Federal and State levels comes from
the recognition that these numerous businesses provide employment for
operators, their families and other hired staff. For instance, 69
percent of the 856,000 HBBs provided a livelihood mainly for their
operators, 28 percent or 240,000 actually hired one to four additional
staff, and 3.1 percent or 26,000 had between 5 to 19 employees (ABS,
2005). Another reason for interest is the assumption that many HBBs
could have growth potential that could be tapped to facilitate local
Starting a new business is onerous for many people, involving both
cost burdens and risks. Many HBBs are at the early stages of business
development and face difficulties related even to mere survival (Walker
and Still, 2003). Local government authorities have the closest
connection to HBBs. These councils have started to realise the economic
contribution of this sector and are initiating programs to encourage,
sustain and grow these businesses. One of the earliest initiatives in
the State of Victoria was the study commissioned by the City of Casey
and its neighbouring councils in the Southeast Region of Victoria. The
study, prepared by Hitech Marketing Services (1998), involved a survey
of HBBs and recommended action plans for the councils to develop this
Some other Victorian councils followed suit and conducted research
on HBBs within their jurisdiction. Melton and Wyndham councils
collaborated to survey the demographics of their HBBs and emerging
trends within the sector (Melton Shire Council and Wyndham City Council,
2001). The report forwarded suggestions for a role by local government.
Similar approaches have been noted in another report prepared for
Mitchell Shire (Hitech Marketing Services, 2003).
2. LITERATURE REVIEW
2.1 The Stages in Business Development
An understanding of the life-cycle model of small business growth
is important in the development of appropriate policies and programs
relating to support provision by local and other levels of government.
Greiner's (1972) life-cycle model contends that businesses go
through five developmental stages: inception, survival, growth,
expansion and maturity. The model implies that a business firm in a
particular stage of its life-cycle will be characteristically different
from another firm in another life-cycle stage. Such a model is useful
for business operators, who can respond in a proactive fashion with
respect to planning and providing for the required resources to enable
the business to capitalise on opportunities.
Similar to the model set out by Greiner (1972), other authors have
suggested that businesses go through a process of growth, which can be
divided into stages, (Churchill and Lewis, 1983; Scott and Burns, 1987).
The staged approach to describe small business growth and development,
as is the basis of the life-cycle model, seems intuitively reasonable.
Whether firms go through all these specific growth stages is however
debatable (Storey, 1994). For instance, Carson et al., (1995) describes
a range of internal and external factors that could influence a
firm's progression in this lifecycle model. Internal factors
concern the goals and personal characteristics of the owner manager that
have a considerable impact on the future of the business. The owner
manager can make a deliberate choice to control the growth of the
enterprise for purely personal and lifestyle reasons. Or on the other
hand, the choice could be to remain entrepreneurial, thereby actively
seeking growth opportunities.
Then there are the factors of owner abilities and their capacity to
capitalise on opportunities, which Morrison et al. (2003) suggests are
key variables in identifying small firms that will grow further. They
also propose that these operator capabilities can be enhanced by
targeted external support to the business. Ali et al. (2001) build on
this proposition by identifying elements relating to both "smart
business operator" and "good business practices" that are
essential for businesses to draw on available support, and hence, be
able to take advantage of growth opportunities.
Other contributions that may help inform government policy for
small business support come from economists (Jovanovic, 1982; Frank,
1988; Reid, 1993) who have expressed the view that there is much
"adaptation" or learning required on the part of the business
operator as the business develops and grows. This adaptation process
suggests that the business' development at various stages could be
characterised by changing resource needs, managerial and leadership
demands, knowledge and information needs, as well as systems and
2.2 Small Business and Support Programs
Previous studies on obstacles to small business participation in
support programmes (Sims et al, 2002; Hull, 1987) suggest that lack of
awareness of support services was an impediment to small business
growth. Hull (1987) also found that business support programmes have
failed to consider the individual attitudinal and behavioural
characteristics of small firms, the business characteristics of
individual firms, and the specific and often unique nature of the
support provision needed. This was seen to have hindered business
participation in such programmes.
It is important to recognize that there are various obstacles
facing support service providers in dealing with small businesses. Gibb
(2000) describes economic factors that inhibit the delivery of
appropriate support such as the costs of establishing credibility with
these businesses and customisation of such support. Similarly, Kearney
(1998) refers to the cost of incorporating flexibility in the delivery
mechanism to suit the business operator. Government funding support is
implied to overcome these hindrances. Beyond financial assistance, there
could be an intermediary role which was originally defined by Hull
(1987) as linking local firms on one hand and various local, regional
and national resource-providing institutions on the other. An issue
addressed in this paper is: Do local councils provide an effective
intermediary role for small firms, particularly home-based businesses?
In Victoria, Breen and Bergin-Seers (2003) reported on a study of
small firms to investigate the nature of the take-up of Government
business assistance services. Small firms surveyed were found to be
confused about the type of services available and which level of
government provided the service. Further, while there was broad
agreement that these businesses require support, there appeared to be a
misconception that the available assistance services from Governments
were perceived to be predominantly for information on compliance and
regulation issues, and do not include business operation and development
support, as is actually the case. This perhaps explains why there is a
low uptake of these assistance services offered by Government. Breen and
Bergin-Seers (2003) argue that a lack of communication is a major cause
of this confusion.
2.3 Recognising and Supporting Home Based Businesses
Though home based businesses account for more than two-thirds of
all small businesses in Australia, this sector is not well understood
and research on this sector is only now gaining momentum. A reason for
the lack of attention to HBBs is because they have often been assumed to
be hobby or artisan types of businesses, operated on an ad-hoc part-time
basis, mostly by women and often out of the metropolitan area. With this
perspective, HBBs do not conform to mainstream business (Walker, 2003).
A sense of isolation, or a feeling of being alone and without
support, is to be expected among HBB operators. Working long hours and
mostly just by themselves, HBB operators do not have opportunities for
professional support and personal development as would be normal in
larger organisations. Another problem is that HBBs are often perceived
as not "real businesses". They therefore do not have the
credibility of regular businesses, such as those operating in commercial
premises. HBBs are as a consequence of this image problem, handicapped
in attracting customers for their products and services. The
Commonwealth of Australia (2004) recognised the economic value of HBBs,
owing to their large number, and has encouraged local government in
particular to address problems and needs in the HBB sector. Many
Councils are involved in the provision of support for businesses, with
funding either by themselves or jointly with other government agencies
or industry organisations (Breen and Bergin-Seers, 2003). Councils and
other Government stakeholders need to understand the territory in their
quest to support the important HBB sector. First, government must learn
to communicate with this group, a task which is not easy as HBBs prefer
to keep a low profile (Peacock, 2004).
The other challenge for government is identifying appropriate
support programs. The staged small business life-cycle model discussed
earlier provides a starting point in identifying the assistance scheme
appropriate to the particular stage of the business life. The staged
model implies that as businesses progress from one stage to the next,
their characteristics, and therefore their needs, change. HBB operators
are also expected to exercise different types of adapting behaviour
depending on what stage their business is at so that they can exploit
The study collected data using pre-arranged telephone interviews
with representatives of all 79 councils across the state, and then
follow-up in-depth interviews with 20 of these councils. All councils
were contacted by a faxed letter and requested to nominate a suitable
person to discuss HBB related issues with the researchers. The telephone
interviews used a questionnaire guide, and lasted between 30 and 45
minutes. The phone interview was designed to collect information on the
council's interest, experiences and development programs in
relation to HBBs. Supplementary surveys of council websites were also
conducted. Based on the information gained, in-depth face-to face
interviews were conducted with 20 councils that displayed some degree of
interest in HBBs and reported specific initiatives for the businesses in
The face to face interviews were conducted by two researchers and
lasted between 60 and 90 minutes. Following a semi-structured format,
the interviews collected more detailed information on the context of
HBBs in the municipality, the specific projects undertaken by the
council for HBBs and the rationale behind these initiatives. The
interviews were tape recorded and were later transcribed by a third
person not present at the interview. During the visit to the Council
offices for the interviews, Council reports and other relevant
publications were collected. These documents were later referred to in
preparing individual reports of interviews. In some instances, telephone
follow-up calls were made and web-sites were revisited to verify some
4. FINDINGS AND DISCUSSION
4.1. Challenges faced with engaging HBBs
Making contact with HBB operators has reportedly been problematic
with councils due to their low profiles and their being dispersed in
residential locations. The general non-mandatory registration of HBBs
was also cited. The difficulty was demonstrated in an example where one
council tried to conduct a survey of their HBBs. The council had no
choice but to form its HBBs sampling frame by listing one at a time,
those businesses listed with the Yellow Pages and other general
directories, which have addresses in residential locales without visible
commercial activities. An address given as a Post Office Box was another
assumed indicator that the business is home-based.
Council officers also confirmed that their major barrier to a
better understanding of HBB characteristics and needs is the negative
view many business operators have about councils. This view results in
behaviour ranging from caution to avoidance by HBBs of any form of
council intervention. One interviewee, who described the view of a local
HBB operator, best expressed the sentiment:
"If the council is interested in you, it can't be for
A recurring message was that HBBs prefer not to be identified and
wish to remain anonymous, as they are unsure of the motives of local
government in wanting to make contact with them. This image problem can,
for many councils, represent a serious impediment to effective service
"They think that they are going to be regulated, or that we
are going to find out that they are not complying with the rules."
The general suggestion from the local government officers was that
while HBB operators may have such a view, it is essentially unfair. They
also assert that their modern-day councils are much more proactively
engaged with the community and business constituency. To these
HBB-supportive councils, the first steps in engaging their HBBs are
obviously to make contact with them, dispel their fears and build trust
for council initiatives.
4.2. The level of Local Government interest in home businesses
The phone interviews served to assess individual council's
interest in HBBs. The research team evaluated the information collected
and rated each council using a five point scale, from 1 (very low
interest) to 5 (very high interest). Results of ratings for the 79 local
councils are presented in Table 2.
Twenty two councils comprising 28% were rated as having high or
very high interest in HBBs. The top 11 which had a rating of 5 have
shown a strong commitment to supporting HBBs and have been running a
number of projects to support the sector for some time. Those with a
rating of 4 have expressed clear interest in HBBs but have a limited
range of HBB-targeted initiatives, which are mostly in the early stages.
Those with a moderate interest rating of 3 state that HBBs could be
important to them but at are still to show definite plans on how they
could support HBBs.
On the other hand, those with a rating of 2 (classified as having
some interest) are supportive of HBBs but do not see themselves planning
anything definite for these businesses in the near future. Those with a
rating of 1 (very low interest) have given very little thought for these
home based businesses. Councils, who have ranked with the lower 1 or 2
ratings, are mostly resource-strapped councils who do not have the staff
and funding to plan, much less implement support projects for HBBs.
On the question of what drives councils' interest with HBBs, a
few of the HBB-supportive councils reported that in the past, they gave
preferential assistance to large employers. However, a string of
closures of such large companies in the last ten years has left behind
social and economic problems for the affected municipalities. With this
unpleasant experience and the general difficulty in obtaining new big
investors, interest has emerged for sustainable small-medium enterprises
(SMEs) and more recently, HBBs.
Three factors were identified that appeared to be related to the
degree of councils' HBB interest: 1) location in highly populated
dormitory suburb, 2) the area's business profile, and 3) previous
involvement with community business revitalisation programs.
A majority of councils that are proactively pushing for the
development of HBBs tend to be located in highly populated
municipalities and where there is an absence of large businesses to
provide employment in substantial numbers. These councils with
populations of more than 50,000 are mostly outer metropolitan ones,
located in dormitory suburbs with significant numbers of residents who
travel outside these suburbs for work. Councils in these areas affirmed
that they support HBBs as they generate local jobs and support the local
The business profile of the area was found to be a significant
influencing factor on the degree of councils' interest in HBBs. Of
the councils which were rated low on the HBB interest scale, some are
metropolitan councils but with large industries or more land for
industrial development. These councils (with large industries within the
municipality) prefer to direct their economic development attention to
existing large businesses and prospective investors.
Some councils, which rated highly on the HBB interest scale have
taken advantage of the State Government's StreetLife program, which
is aimed at business stimulation at the community level. These councils
have matched the amount of State funding available and initiated
projects that either involved home based businesses from the start, or
evolved at some stage, to give this sector more focus. Thus, having the
set-up and experience to engage HBBs, these councils are inclined and
motivated to pursue further development of this sector.
4.3. Programs and Strategies for engaging and supporting home
Reaching as many of the hidden HBBs is the common objective of
interviewed councils. There were several media used to achieve this,
which include disseminated brochures, mail-outs, the Internet and CDs,
networking sessions and visits by council officers.
Brochures. Brochures seem to be a popular medium for councils in
delivering their message to HBBs. A range of publications from modest
three colour hand-outs to glossy publications were observed. Whatever
the format, the brochures similarly convey to HBB operators that
government recognizes the many benefits that they bring to local
communities. It also informs them of the existing State-wide regulations
relating to HBBs, and assures them that as long as they comply with
these regulations, they have all the right to continue operating without
council intervention. Finally, it invites them to participate in council
activities designed to foster the sustainability of their businesses.
Building trust for the council's efforts is an underlying
objective in the way the brochure is written and distributed. This theme
is deliberately pursued and is likewise observed in the use of other
media to reach out to HBBs. The local government's message is
delivered mostly through the Economic Development group within the
Council. This conveys a statement that this message is about promoting
business and not about regulation. This hopefully puts wary HBBs on a
less defensive mode.
Some councils have incorporated the effort of contacting HBBs as
part of a business promotion program, which is branded and prominently
bannered throughout the municipality, such as Business Melbourne. This
is designed to put a positive, appealing tone to the council's
message. The brochures are distributed to HBBs in a non-direct way, such
as display racks in council front offices or in even more neutral
locations such as community libraries. The idea is to use a soft, rather
than direct approach in contacting HBBs.
Mail-outs. One council that was interviewed felt that the best way
to reach HBBs is to include an invitation to HBBs to register with the
council with the annual property rate notice mail-outs. With some 80,000
properties in the municipality, this planned initiative is expected to
deliver the council's message of support and invitation conceivably
to all HBBs resulting in the identification of a greater number of these
The Internet and CDs. The emergence and increasing prevalence of
information technology has been valuable in engaging HBBs. As discussed
previously, HBBs' use of computers and connectedness to the
Internet support this proposition. Councils have reported the increasing
use of their websites to deliver information. The more pro-active
councils have a dedicated webpage catering to HBB audiences. One council
officer described the website as a way to provide and access information
in an anonymous, non-threatening manner.
Home based businesses are also being identified and engaged with
the hosting of on-line directories. Through this self-registration
functionality for HBBs, a few councils have requested permission for
them to council bulletins via emails. Opt-in email from the council
allows the distribution of relevant and timely information on business
services that are available.
The absence or unreliable state of broadband services dampens the
potential offered by the Internet for councils to engage HBBs, other
businesses, and their constituents, in general. Issues were consistently
raised by councils in regional areas and interestingly, even those in
outer metropolitan municipalities. A few councils have accepted the
situation and have come up with the dated, yet still acceptable,
alternative of disseminating information via the use of CD-ROM disks.
Hence, information on council services, business listings and training
materials are provided in CDs and sent by post to identified businesses.
The use of CDs has found an innovative application with one council
disseminating specific information for businesses involved with food
preparation. The council has developed a CD to highlight some of the
issues faced by food businesses, including home catering. The CD allows
a food proprietor to tour virtual premises and learn about best
practices in facilities design, and the storage and preparation of food.
It contains about 120 photographs and helps to simplify the legislation
that food proprietors must comply with daily. This format of delivering
information, using a good amount of visual elements, is especially
helpful in the culturally diverse municipality.
Networking Events and HBB Associations. The hosting of networking
events is a common practice used by councils to draw out HBBs. The
council starts by advertising such events in the local press to catch
the attention of HBBs. These networking sessions are typically breakfast
meetings where there are interesting speakers giving inspirational
talks, small business workshops conducted by training consultants or
presentations by specialists on particular issues like taxes.
Networking events appeal to HBBs not only for their knowledge
benefit, but perhaps more so in that these events allow operators to
meet peers and share experiences and information. Councils are aware of
the sense of isolation felt by many HBBs, a downside of running a
home-based business, which generally does not provides the opportunity
to interact with colleagues. Thus, as they deliver important benefits to
HBBs, networking events give councils an attractive and effective window
to draw out and identify HBBs and engage them in ongoing information
dissemination, support and feedback activities.
A few councils have decided that for the long term, it is best if
HBBs can form their own association to represent their cause and to
manage their activities. While these councils initially do most of the
preparation for the networking sessions, they gradually turn over the
responsibility to a core of HBB operators who show interest in taking
lead roles in a formally organised association.
Two schools of thought have been noted in a council's
relationship with HBB associations. One council wants to maintain a
direct hold on the association by being part of the committee running
ongoing activities. The reasoning for this is to have greater assurance
that the council's objectives are effectively pursued. On the other
hand, another council believes in maintaining an arm's length
distance to the association and confine the council's role to
providing regular funding, information and occasional advice. The
association is however expected to present the council with its business
plan and provide periodic feedback. This council believes that with this
scheme, the HBB association appears independent in the public view, and
as such, becomes more attractive to prospective HBB members.
Visits to HBBs. One council felt that a direct approach to HBB may
work. Using an easy-going friendly tone, the council's Economic
Development officer hopes to meet with identified HBBs and win their
trust. This could be time-consuming but the results have been positive.
Some HBBs visited have started participating in council projects.
Another council has taken the idea of visits to HBBs further by
providing opportunities to legitimise the business. This council has a
program of visits to HBBs to discuss issues with the business operator
and then to certify that the business is compliant with local
regulations. This provides evidence for the HBB to use, should any
neighbours complain about the business activity. It also provides some
comfort to the council that it is promoting compliant businesses when it
takes a stance that is supportive of HBB development. An added benefit
of this approach is the widespread promotion of the idea that HBB
operation is allowed as a right within the planning provisions.
4.4 Business Support Programs and Activities
Many of the services provided at the local level would be classed
as generic business support and did not specifically target the home
based business sector. This applied even to those councils that rated
'high' to 'very high' in their interest in HBBs and
had specific policies and strategies for the HBB sector. Such generic
services were widespread in availability and accessed by all businesses,
home-based or otherwise.
There was a wide range of services identified in the follow-up
interviews with the twenty councils. Some Councils demonstrated a clear
and strategic agenda for HBBs within their economic development
framework. However, the general picture revealed that while business
support was seen as important, few Councils were able to clearly
articulate their underlying objectives and the expected outcomes from
such programs. Many of these programs were funded by the State or
Federal governments and those councils best able to make a case tended
to be funded at various levels.
The lack of well defined program objectives and parameters made it
difficult to match the programs into the five business developmental
stages in the small business life cycle model (inception, survival,
growth, expansion and decline). Closer examination of the services
reported by the councils revealed that the programs were related to the
first three stages in the life cycle model. Thus, the three categories
of support were defined as: (1) start-up support, (2) survival support,
and (3) growth support.
Start-up support services are those that relate to the pre-setup
and the setting-up stages of the business (or the inception stage in the
life cycle model). At this stage, information needs are likely to be the
highest and would involve meeting of tax and regulatory requirements,
including planning scheme and council by-laws. This information was
provided through websites using links to government portals and through
hardcopy brochures. Councils are active at this stage and play a
'facilitation' role. For the operator the information needs
are diverse and include the assessment of risk and business potential.
Survival support services correspond to the second stage, when
business activity has commenced and market interactions are beginning to
be established. The survival phase objectives involve financial
breakeven and normally, operators earn no more than survival income. The
support needs are for market development, time management and business
skills training. The most common services provided by local councils in
this stage included providing local business directories, organising
business seminars and facilitating network formation. Networks were seen
by both councils and operators to be of critical importance at this
Growth support programs are designed to help the HBB operators to
steer their business operation through stages of growth in turnover and
clientele. It may involve new pressures relating to division of
available human resources and tasks to meet new business needs. There
are greater demands on financial resources because of increasing
overhead costs and working capital requirements. Often the business
dynamics undergoes change as additional staff members are hired and
functions are delegated. Thus, the business operators would still be
experiencing significant pressure despite having passed the survival
stage. A few Councils which were providing support consistent with this
stage of business development were offering activities such as training,
research or network development, but these were targeted to and
specifically designed for HBBs.
Table 3 presents the range of services offered by the councils
within these there categories. There was no measure of the effectiveness
of the services carried out as it was beyond the scope of this research.
The classification of the service into a corresponding support category
was based on the nature of the support provided and how useful they were
at meeting the business needs during that particular stage of
development. Generally, the support infrastructure for the first two
stages (start-up and survival) appears to be well established and
information about services provided is readily available. Only 11 of the
20 Councils interviewed have some local research data on HBBs.
Generally, the sector was not well understood and while there was a
clear interest in developing and supporting HBBs, only a handful of
Councils were able to demonstrate a good grasp of issues and problems
facing HBBs. The survival support programs were more likely to be
generic in nature and not specifically targeted to HBBs. For example,
only a few councils had developed a HBB manual to provide specific
information for their local HBBs. These manuals were considered to be
popular for existing and prospective home business operators. Further,
while there were a few exceptions, many of the support services provided
by councils, such as network formation and business seminars were
generic in nature and not specifically targeting or relating to HBBs. It
is difficult to say whether generic business support programs are
appropriate for the HBBs without undertaking a research on the
businesses themselves. User feedback received by Councils indicated that
such programs could be of value to HBBs; however, another observation is
that the extent of HBB participation in these generic programs appears
to be quite limited.
Growth support services were reported by a small group of councils
whose interest in HBBs were observed to be significantly higher than the
rest. These councils have implemented HBB-specific support services and
are located in the outer fringes of the metropolitan area, characterised
by high populations. These councils also tended to have a small
commercial sector, comprised mainly of retail. There is a strong belief
within these councils that HBBs can make a significant contribution to
economic activity and employment in their area. The rate base of these
councils provides for the availability of financial resources to allow
the employment of staff whose sole focus is the introduction of specific
programs targeted at HBBs. These tailored programs, such as site
visitations, creating synergic networks and helping individual
businesses with marketing, are labour intensive and require professional
management. Initiatives of this type are underpinned by a relationship
building strategy and are well placed to deliver more business-growth
support assistance. The effectiveness of these initiatives is reported
to be positive, but is yet to be tested.
4.5 Strategic Business Support
Councils have learnt from many years of business support provision
that in developing support programs and in delivering such support, it
is important to articulate goals and expected outcomes at the outset.
For example, if an important policy goal is to identify and support HBBs
with growth potential, then individualised programs specific to one or a
group of similar firms would need to be developed. If the aim is to
achieve an increase in the number of HBBs, then start-up and survival
programs would be more appropriate, complemented with mentoring
programs. While it is tempting from the point of view of costs and
convenience to do what others are doing and in the same way as others
are doing it, purpose and objectives should drive the design and
introduction of support programs. This implies the need for local HBB
research, which is not generally undertaken.
The understanding of the various business development stages and
corresponding requirements is important from two perspectives. Firstly,
as pointed out, it will enable the creation of appropriate support
services that meet specific needs. Secondly, businesses can be supported
in the transition from one life-cycle phase to the next. For instance,
facilitation programs can be delivered, such as mentoring, marketing of
innovations, building networks and alliances, and supporting entry to
new and foreign markets.
This paper reported on assistance provided by Victorian local
government for home based businesses (HBBs). This assistance is
motivated by the fact that the HBB sector is large in numbers and makes
a significant contribution to economic activity and employment
generation. While there was general interest among the 79 municipal
councils for this sector, some 28 percent of these councils have already
been proactively providing assistance and support services. The
knowledge of what the leading councils are doing for HBBs may provide an
impetus to their colleagues in other areas to increase their commitment
HBB-supportive councils have pro-actively employed practical and
creative measures to reach HBBs, such as brochures, mail-outs,
networking events and visits. To draw out these "hidden
businesses", the principal theme of these measures is the
deliberate building of HBBs' trust with council efforts. Thus, the
soft, non-direct and pleasant approach is preferred. Playing a specially
important role is information and communication technology (particularly
the Web) in disseminating council information and support services to
the majority computer-equipped HBBs. And those HBBs with poor broadband
or internet services can still benefit from informative compact disks
prepared by some councils.
A conceptual understanding of the range of HBB assistance and
support measures provided by councils was underpinned by the small
business life-cycle model. It was found that the observed council
initiatives only cater to the requirements of the first three
development stages of inception (or start-up), survival and growth. A
frequency distribution analysis of these services, however, revealed
that they were predominantly skewed to the start-up and survival stages.
There were minimal initiatives reported for the growth stage, which
would involve specific or even firm-tailored support.
The analysis pointed out the apparent lack of strategic
consideration in the design and provision of HBB assistance. In
particular, there ought to be an articulation of council objectives
after considering their local HBB sector. Finally there is a need for
councils to pursue regular information-gathering research with the HBBs
in their municipality in order to better inform the development of their
The findings have broad application across the local government
sector helping to better understand the economically significant HBB
sector and inform new policy development. These findings will also be of
interest to firms that provide consultancy and training services to home
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Shameem Ali, Victoria University, Melbourne, Australia
Rafael Paguio, Victoria University, Melbourne, Australia
John Breen, Victoria University, Melbourne, Australia
Shameem Ali is a researcher with the Centre for Tourism &
Services Research and a Lecturer in Marketing at Victoria University,
Melbourne, Australia. His research areas are small business,
entrepreneurship, innovation and marketing strategy.
Rafael Paguio is a researcher with the Centre for Tourism &
Services Research and a Lecturer in Finance at Victoria University,
Melbourne, Australia. His research areas are small business finance,
entrepreneurship, small enterprise policy and strategy formulation.
John Breen is the Director of the Centre for Tourism & Services
Research at Victoria University, Melbourne, Australia. He specialises in
small business research and policy advice for governments.
These authors agree to this submission and confirm that this
article has not been submitted to or being considered by any other
Home Based Businesses in Australia, June 2004
Operated from home 820,000
Operated at home 281,000
Operated both from and at home 231,000
Total HBBs operating either from home or at home 856,000
Rated Level of Council Interest in HBBs
Interest Level Number Percentage
Very low 6 7.6
Some 31 39.0
Moderate 20 25.0
High 11 14.2
Very high 11 14.2
Total 79 100.0
Table 3: Council Support Services for HBBs Classified According to
Business Life-Cycle Stage
(N = 20
Offer website link to Government business information 20
Provide brochure/checklist to help understanding of 12
Develop materials to encourage local business start ups 13
Offer website links to support agencies for business 16
Receive general enquiries via email 7
Develop a HBB manual 2
Conduct research on local HBBs 11
Provide local business databases/directory 18
Identify local needs for support and training (generic) 18
Facilitate network formation (generic) 17
Make HBB a priority in economic development strategies 8
Organise business seminars (generic) 17
Include HBB development in policy documents 1
Support local HBBs to build their websites 1
Undertake visitation program to address issues 2
Develop networks for subsets of local HBBs 2
Survey local HBBs regularly 2
Organise business planning training for HBBs specifically 3