Home Based Business Strategy for Inner Melbourne

Home-based business has been touted by some as the "wave of the future", and by others as a consequence of poor job security.

Our client group, the Inner Melbourne Area Consultative Committee and four Inner Melbourne Councils, were keen to understand the scale and scope of the growth in home-based business in their region.

Essential Economics was engaged to create an information base that could lead to informed debate and to provide a strategy that local government could use to improve the economic contribution of the home-based business sector.

We were able to scope the size of the home-based business sector in the region with reference to existing reports and judicious use of statistics. Our analysis of problems and opportunities facing home-based businesses was developed through extensive consultation with home-business operators and a wide-ranging literature review. We were able to demonstrate that:

• There are an estimated 9,500 home-based businesses in the Inner Melbourne Area, comprising 21% of all businesses in the region.
• Approximately 23,000 people are employed in home-based businesses, about 15% of the resident labour-force in the region.
• The number of home-based businesses has been growing at 3% per year since the early 1980s, with more rapid growth over the past five years. At recent rates of growth, by 2011, we estimate that approximately 1 household in 10 will contain a home-based business.

We were also able to describe the reasons for the growth in home-based business (and very small business more generally). And we were able to map concentrations of micro-businesses throughout the region, a useful exercise in itself with a wide application for cluster planning and network development.

Our strategy for development of the sector was based on the themes of

• Raising awareness
• Improving networking
• Improving the transition from home to commercial space
• Improving planning and urban design

The action program around these themes is now with the four local Councils. We expect to see elements of the action program being developed over the next several years.

Further information:

Peter Chaffey, Economic Development Manager, City of Melbourne
Anthony Jacobs, Business Development Executive, City of Port Phillip
Paul Cherednichenko, Business Development Manager, City of Stonnington
Gary Cattran, Business Development Officer, City of Yarra