Home-Based Businesses Turn to Web for Survival

In the current economic environment, home-based businesses (HBBs) in the United States are increasingly turning to the Web to boost business, according to a study by research firm Access Markets International Partners, which specializes in midmarket IT, Internet, telecommunications and business services strategy. The study found social networking sites, Websites and Voice over Internet Protocol (VOIP) technologies are playing an increasingly prominent role in the survival of the HBB.

AMI’s study revealed that over half of HBBs in the U.S. use social networking sites, product-focused forum sites and blogs. A significant number of those who are using these types of media utilize them for building customer relations and promoting their business. The study found HBBs are also increasingly aware that web sites are a powerful tool to expand both market share and revenue opportunities; hence the number of U.S. HBBs that have a web site grew significantly in 2009.

“As with many U.S. businesses HBBs have been experiencing decreasing revenues and cash-flow issues,” said Yuki Uehara, a research analyst at AMI-Partners. “In the past HBBs had focused on more improving internal efficiency such as IT security, data backup & management (back-office functions). Presently we are seeing a shift to reaching out to clients and prospects and communication (front-office functions) to keep baseline revenue and/or catching every possible sales opportunity.”

Another area that improves efficiency and reduces cost is the implementation of a VoIP communication system. The number of U.S. HBBs using VoIP technology has increased by 48 percent in 2009. The study suggested the need for HBBs to cut costs thereby maintaining an adequate cash flow has directly hit the areas of telecommunications and business travel. VoIP providers such as Time Warner, Optimum Lightpath, Verizon, to name a few, are offering “very attractive” bundled VoIP and broadband internet access packages, AMI’s report noted.

“U.S. HBBs are having a difficult time surviving. However, HBBs are realizing the advantages of investing in technology that improves their business and brings tangible results in the short run,” the report noted. “For IT vendors and service providers, it is vital to pin-point the needs of U.S. HBBs and target the HBBs that are proactively investing in those technologies.”

Uehara said current penetration of VoIP technology is still incipient, but strong interests by U.S. HBBs suggests a “vast opportunity” for VoIP providers in 2010. “On the business travel front, video capability over instant messaging (Skype, AOL’s AIM, and Yahoo’s Messenger) and web conferencing (MS Live Meeting, WebEx, etc.) will continue to help defray the cost of staying in contact with clients and vendors in the HBB market in 2010,” Uehara said.