Home is where the business is: Incidents in everyday life and the formation of home-based businesses

Abstract

Home-based businesses (HBBs) represent an increasingly important form of entrepreneurial activity, yet often remain overlooked within academic literature and largely invisible within official statistics. Set against the background of the home becoming a more common place of business, this article unpacks owner-entrepreneurs’ experiences in forming their HBB. By employing Lefebvre’s concept of everyday life and drawing on de Certeau’s work, it examines the trajectories and tactics of HBB owner-entrepreneurs in the Sheffield City Region in the UK. Focusing on the creative industries sector, the article problematises the push/pull, opportunity/ necessity based binary to elucidate how incidents experienced by HBB owner-entrepreneurs affect the formation of HBBs. The motivations for creating HBBs are shown to be complex, comprising personal and work-related incidents which are related to the lived practices of owner-entrepreneurs. Finally, the article broadens the discussion to reflect on implications for public policy and outlines directions for further research into HBBs as an increasingly pertinent field of entrepreneurship.

Keywords

De Certeau entrepreneur everyday life home-based business incidents micro-business owner-entrepreneurs

Introduction

Whereas home is renowned for being where the heart is, it is also increasingly where the business is (Enterprise Nation, 2008), as over the past decade home-based businesses (HBBs) have become an important form of entrepreneurial activity (Jay, 2003; Jay and Schaper, 2003; Mason et al., 2010; Stanger and Woo, 2001). Defined as any business engaged in selling products or services into the market operated by a self-employed person, with or without employees, where HBBs differ from other business activity is that they operate from a residential property rather than maintaining a separate workplace (Mason et al., 2010). Indeed, basing a business at home can provide a range of benefits, not least financial, and in the wake of the 2008 financial climate the prevalence of HBBs has increased steadily. However, while the government is aiming to ‘help many more people start and grow their enterprise’ (Department for Business, Innovation and Skills, 2011), the growth of HBBs remains comparatively under-researched and their significance not widely understood.

The importance of small and medium-sized enterprises (SMEs) remains integral to UK economic growth (Department for Business, Innovation and Skills, 2010; Taylor and Murphy, 2004), and more recently there has been a greater recognition in academic and policy debates as to the importance of micro-enterprises (i.e. fewer than five people) (Keeble and Nachum, 2002; Van Stel and Storey, 2004). While HBBs can include both lifestyle and high-growth businesses, it is increasingly apparent that they represent a key vehicle for commercial enterprise. Yet as Mason et al. (2010) note, HBBs are largely ‘invisible businesses’. This article contributes to the current dearth of research about the formation of HBBs and what we refer to as the ‘incidents’ in the everyday life of owner-entrepreneurs that see them create an HBB.

Focusing on the creative industries, which are well-known as highly projectised (Ekstedt, 1999), this article is based on an empirical case study of HBB owner-entrepreneurs in the Sheffield City Region of the UK. By undertaking a series of in-depth interviews with HBB owner-entrepreneurs in the creative industries, this article aims to understand better the formation of HBBs by analysing the incidents in everyday life that led to the formation of their HBBs. Accordingly, the remainder of this article is structured as follows. The first part outlines recent debates relating to the motivations of entrepreneurs, before discussing the extant literature on HBBs. The second part presents De Certeau’s work as a discursive and analytical framework within which to examine the factors underlying the formation of HBBs in the Sheffield City Region, as well as discussing methodology and associated limitations. The third part examines the everyday life of owner-entrepreneurs in the formation of HBBs, considering the everyday life trajectories and tactics employed. The article concludes by highlighting the complex trajectories of owner-entrepreneurs in the formation of HBBs, and supports the view of Jayawarna et al. (2011) that entrepreneurial activity cannot be understood in terms of an opportunity and necessity-based binary.

Entrepreneurial drivers and home-based businesses

Before outlining the literature on HBBs as an emerging subset of entrepreneurial activity, this section places those discussions within the wider debates in entrepreneurship studies regarding individuals’ motivations to start business ventures. While there are many conceptual frameworks that have sought to understand the complex motivations for engaging in entrepreneurial behaviours, the work of Bögenhold (1987) distinguishes between entrepreneurs motivated by economic needs and those driven by a desire for self-realisation. More recently, building upon this approach, the literature has come to refer to ‘necessity-based’ entrepreneurs pushed into entrepreneurship because all other options for work are absent or unsatisfactory, and ‘opportunity’ entrepreneurs who seek to exploit some business opportunity and are pulled into entrepreneurship more out of choice (Harding et al., 2006; Maritz, 2004; Minniti et al., 2006; Smallbone and Welter, 2004).

One driving force perpetuating widespread adoption of the necessity/opportunity dichotomy has been the Global Entrepreneurship Monitor (GEM) survey. Since 1999, when GEM was established in 10 countries, it has grown to include 85 countries by 2012 and become the largest global data source on entrepreneurship (Minniti et al., 2006). One aspect of the GEM survey examines the factors leading to entrepreneurship, and uses the concepts of necessity and opportunity to explain why people become self-employed. The findings suggest that the ratio of opportunity-driven to necessity-driven business owners is higher in higher-income countries, and that countries dominated by opportunity-driven entrepreneurship have a lower rate of early-stage business failure. On this basis, opportunity-driven entrepreneurship has come to be acknowledged as more desirable than necessity entrepreneurship (Harding, 2003). However, more recently it has been argued that this push-or-pull dualism is too simplistic (Shane, 2009; Smallbone and Welter, 2004), since there are often multiple factors that explain entrepreneurs’ behaviour and these can shift over time. In short, the lived practice of entrepreneurs is more complex and dynamic than can be understood in terms of an ‘either/or’ dichotomy.

This article contends that to understand the multiple factors that explain entrepreneurial behaviour requires exploring the inherently dynamic and contingent incidents that affect the everyday life of these individuals. Jayawarna et al. (2011) views entrepreneurs’ behaviour as related to three related aspects of their life course: first, the individual’s career, shaped by family background, education and work experience (career life course); second, the role of the individual within a specific household (household life course); and third, the individual’s experience in mobilising resources and achieving business outcomes (business life course). Building upon research into the everyday life of entrepreneurs, and in keeping with critiques of explanative typologies (see Gartner, 2010; Gartner et al., 2008), this article focuses on the factors influencing prospective owner-entrepreneurs in the formation of HBBs.

Over recent decades the clear demarcation that existed between spaces of home and work in the industrial age has come to be blurred (Dart, 2006; Felstead et al., 2001; Surman, 2002; Tietze et al, 2009). When coupled with the transformation of labour markets, this has opened up opportunities for small business formation, with home-based work now accounting for around 11 percent of the workforce in the UK(Mason et al., 2010). The home has increasingly become a place of work as the number of individuals engaging in economic activity from their residence has continued to increase, and includes an ever more diverse range of occupations and sectors(Felstead and Jewson, 2000; Pink, 2001; Tietze and Musson, 2005). Whilst the notion of HBBs is not new, generally it has been on the periphery of mainstream small business research. One of the earliest studies by Peacock (1994) described 200 HBBs in Australia, finding 76 percent of HBBs were owned by males, 55 percent were one-person businesses, and 57 percent were more than five years old. This suggeststhat HBBs were more than an evolutionary phase in the development of small business, and represented a distinct sub-group in their own right. Although much HBB research has focused on Australia, where they form the largest segment of the micro-business sector (see Breen, 2010; Jay and Schaper, 2003; Peacock, 1994; Redmond and Walker, 2010; Walker and Brown, 2004), increasingly HBBs have become the focus of research elsewhere. The findings of Clark and Douglas’ (2010) study of HBBs in New Zealand attests to heterogeneity in terms of age, size and product range, although found thatover one-third of HBBs operated on a part-time basis with the owner-entrepreneur either running another business or in other employment. In contrast Mason et al. (2010) assert thatthe majority ofHBBs in the UK arefull-time enterprises employing other people, and although only a minority achieve significant scale this does not infer a lack of ambition.Indeed, whether part-time or full-time, HBB owner-entrepreneurs have been found to work more hours than their counterparts with a designated place of work outside the home (Good and Levy, 1992; Jay, 2003).

While the existing literature presents a varied portrait of HBBs, as their number has increased so they have become a more sustained focus of academic and policy debate (Ruiz and Walling, 2005). Distinguishing between HBBs, home-based work(ing) and the self-employed is not a simple task, with the GEM survey estimating that 66 percent of UK businesses operate from home (Thompson et al., 2009). The government’s annual Small Business Survey gives a lower figure of 51 percent, but this is based on the proportion of businesses for which the home was the main location for start-up (Department for Business, Enterprise and Regulatory Reform, 2007). These figures are also consistent with Dwelly et al. (2006), who found that 56 percent of those registered self-employed in the UK were home-based, yet despite inferring the importance of the home, there are no explicit findings related to HBBs in particular. One notable exception is Mason et al. (2010) who, in their analysis of the Federation of Small Businesses membership, found that HBBs account for 36 percent of all businesses and constitute a growing segment of the small business population. Indeed, Mason et al. predict that the home, and with it HBBs, will become an increasingly important form of business activity for three key reasons. First, the ageing population is likely to see a growth in semi-retired people running HBBs, while the younger ‘digital’ generation is increasing likely to set up HBBs. Second, the increasing cost of commuting will see more people work from home – a trend which in part explains the prevalence of HBBs in rural areas. Third, the inexorable rise of powerful new technologies will foster new opportunities to develop businesses from home, a situation in which the physical location of the labour is increasingly unimportant. The increasing numerical significance of HBBs has been translated to their economic significance, as they have generated a positive impact on their local economies. In particular, those rural areas with concentrations of HBBs have been found to demonstrate higher levels of economic prosperity. Given the emphasis on entrepreneurial society and for entrepreneurship to act as a catalyst for economic development (Audretsch, 2007; Wennekers et al., 2005), there is a need for public policy both to recognise and to afford greater credibility to the contribution of HBBs.

The use of the home as a workspace can provide a considerable advantage in creating a business. For example, it can reduce start-up costs, but arguably establishing an HBB depends upon clients accepting the home as the space in which business will take place, and more broadly, accepting HBBs as serious business entities. Although there has been heightened interest in HBBs, there has been comparatively less research into the reasons for establishing HBBs. Of those studies which have addressed this topic, Peacock (1994) found that 55 percent of respondents cited lower costs as the primary reason for establishing an HBB, with the other reasons being convenience (20%) and family or domestic reasons (18%). Similarly, Walker and Brown’s (2004) study of Australian HBBs in the property and business services sectors found the impetus of owner-entrepreneurs included a range of both economic and lifestyle drivers. With only limited research into why individuals establish HBBs, the central aim of this article is to unpack and understand the factors underlying the formation of HBBs from the perspective of the founding owner-entrepreneurs. Having reviewed the literature, the next part of the article presents the conceptual framework through which the empirical findings are analysed, together with a discussion regarding the methodological considerations involved within the wider research project.

Conceptual framework

The empirical project examines the reasons why individuals form HBBs by understanding the everyday life of HBB owner-entrepreneurs and examining the relationship between society and the individual. These two spheres, society and entrepreneur, constitute what Lefebvre (2000, 2006) referred to as the meta-level and micro-scale respectively, and the dynamic between these two spheres is articulated clearly in the burgeoning literature on the ‘entrepreneurial economy’ and ‘entrepreneurial society’ (Audretsch, 2007; Audretsch and Thurik, 2000). However, to focus on the everyday life of HBB owner-entrepreneurs in their entirety is beyond the scope of this article; instead, we draw on the work of De Certeau (1984), which distils two important mechanisms that elaborate the dynamic between the meta-level and micro-scale.

By differentiating between ‘strategies’ and ‘tactics’, De Certeau (1984) distinguishes between forms of everyday practice. Strategies are understood as formal power relations that target and affect specific external groups, which De Certeau describes as typical of politics, whereas tactics are the actions or ways of operating employed by individuals as a means to preserve and/or enhance individual interests: namely, the identification, creation and exploitation of opportunities. These traits resonate with debates relating to creation and discovery which are at the crux of entrepreneurship debates (see Davidsson et al., 2005; Fletcher, 2004). As De Certeau states:

[A] tactic depends on time – it is always on the watch for opportunities that must be seized ‘on the wing’ … It must constantly manipulate events in order to turn them into ‘opportunities’… This is achieved in the propitious moments when they are able to combine heterogeneous elements … in which the opportunity is ‘seized’. (1984: xix)

The above quote aptly frames the study of HBB owner-entrepreneurs who, in terms of the wider literature, represent what De Certeau refers to as ‘trailblazers’ in blurring the boundaries of home and work. This article specifically considers the trajectories and tactics employed in forming HBBs, rather than the strategies defining the institutional framework in which they operate. That said, the two cannot be considered as entirely separate, so the conclusion reflects on how these domains relate. Therefore, the empirical project focuses on what De Certeau (1984) refers to as the ‘opaque reality of local tactics’ of HBB owner-entrepreneurs, by examining the everyday life incidents encountered that led to the formation of their HBBs. This relates to wider debates concerning the importance of self-efficacy in entrepreneurial pursuits: that is, the capacity to ‘mobilize the motivation, cognitive resources, and courses of action necessary to exercise control over events in one’s life’ (Bandura and Wood, 1989: 364).

Method

Methodologically, one difficulty in researching HBBs has been their ‘invisibility’, which resonates with and explains the opaque reality of the tactics employed by owner-entrepreneurs. This is because, as described above, much existing research has been based on people working from home, a category that includes both employees and business owners. As such, in order to explore and unravel the trajectories and tactics of owner-entrepreneurs, this article assumes a qualitative approach in order to understand better the formation of HBBs by using a case study of the Sheffield City Region. While the case study approach provides a basis for such exploratory research, this does mean that the findings are not generalisable. It is on this basis that the empirical project sought to capture some of the subtleties that previous analyses of large surveys have failed to capture. However, as Ericsson and Simon (1993) note, one limitation of this approach is that the recall of the circumstances surrounding the formation of the HBB may be embellished and/or distorted. However, in order to suppress this limitation associated with recall, repeat and interrelated questioning was used to increase accuracy and reliability, while Gass and Mackey (2000) also consider that accuracy can be increased by the rigorous interpretation of content by the researcher. Flanagan contends that ‘recalled incidents can be relied on to provide adequate data’ (1954: 341), in order to understand how incidents affect individuals’ experiences.

The empirical focus of this article is drawn from a wider study, of which the creative industries subsector was the only one with sufficiently high numbers of HBBs to analyse. The sectoral focus of the study, as defined by the Department for Culture, Media and Sport (2001), includes ‘those industries which have their origin in individual creativity, skill and talent which have a potential for job and wealth creation through the generation and exploitation of intellectual property’ (2001: 5). While the standardised definition of the creative industries spans 13 sectors, the empirical cases here were limited to advertising, architecture, crafts, design and software in order to provide greater comparability of the 21 HBB owner-entrepreneurs interviewed. While the sample is not representative of all HBBs in the creative industries, the diversity of the HBB owner-entrepreneurs studied, according to gender and age as well as including HBBs with and without employees, does provide a robust basis from which to uncover valuable insights into the incidents affecting the formation of HBBs. Focusing on HBBs in the creative industries rather than aggregating HBBs from different sectors serves to eliminate any sector-specific idiosyncrasies that might not be apparent from the sample. However, the intention is to extend the study to incorporate other sectors and undertake comparative analysis.

The wider project of which this article is a part is a study of economic resilience in the Sheffield City Region, a location that experienced economic problems following the decline of the coal, steel and manufacturing industries in the 1970s and 1980s. Despite signs of limited economic growth during the 1990s the region’s revival has been reliant on the public sector, and with a historically low business-to-population ratio Sheffield is not renowned as an entrepreneurial city: indeed, it has been described as one of the least competitive city economies in the UK (Huggins and Thompson, 2010). The start-up rate has been consistently lower than the average for England and the Yorkshire and Humber region, and the recent global financial crisis saw Sheffield’s economic performance plummet still further. However, the prevailing downsizing of the public sector has made entrepreneurship and the virtues of self-employment a more attractive option amid rising unemployment.

Data collection

In order to examine the incidents affecting the formation of HBB owner-entrepreneurs, defined as the founding entrepreneur of a business based in the home, semi-structured face-to-face interviews were conducted with 21 HBB owner-entrepreneurs. The interviews were undertaken in an open-ended and reflexive conversational style to probe the incidents occurring in the everyday personal and work lives of the interviewees which led to establishing an HBB. The questions were based around common themes concerning the personal background, work history and process of starting the HBB, and the use of repeat questioning sought to ensure greater accuracy and reliability of the data generated. Akin to previous research by Bygrave (1994), the aim was to identify the incident that led to, or triggered, the formation of an HBB; however, the focus here is not on the occurrence of the incidents per se, but rather the trajectory of everyday life in which they occur. Since all of the interviewees identified between one and eight incidents, the interviews showed that it is more accurate to discern the series of incidents that affected the everyday life trajectory of an individual and which culminated in becoming an HBB owner-entrepreneur.

At the point of forming an HBB we contend that a ‘critical incident’ (Flanagan, 1954) or ‘tipping-point incident’ (Gladwell, 2002) occurred, although we make reference to these concepts in a processual sense rather than methodological as they were intended. Our methodological approach was closely aligned with that of Flanagan’s critical incident technique, although it did not follow the five methodological steps sufficiently to be considered as employing a critical incident technique approach. Specifically, the semi-structured conversationalist interview style used was not in keeping with the more detailed planning specification and data collection detailed by Flanagan. This approach enabled a real dialogue to be created between the interviewer and the interviewee, with both being active in meaning and knowledge production. Informed consent was sought from each of the participants. All participants were informed that all data generated in the interviews would be anonymised, including their personal and business names and location of interviews. During the interviews, the interviewer sought to engage in the ethics of negotiation by creating dialogic relationships with all the participants. While informed consent was gained from all participants, the researchers throughout this research project have been careful to take into account the fact that negotiating and maintaining consent is a fluid and ongoing process that is more complex than simply adhering to ethical procedures (Sin, 2005).

Data analysis

The interviews were analysed using thematic analysis to draw out common themes. Crang identifies the importance of qualitative research as ‘seeing economic activity as a set of lived practices, assumptions and codes of behaviour’ (2002: 648), an observation particularly poignant given the focus here on the everyday. An iterative coding process culminated in categories being established, which were deemed to be neither over-generalising nor too specific relating to the incidents. Once the coding nodes were established the interview data was coded independently by two researchers and any discrepancies were revisited and then coded. The ultimate goal of the empirical study was to capture the small details of life and understand how these mundane yet concrete actions affect the everyday. In this article the focus is on how those small details affect the trajectories and tactics that culminate in the formation of HBBs. In many respects this also represents another point of departure from the critical incident technique, where there has been an emphasis on the application of findings as a means of measuring performance, problem solving and so forth.

Findings

Trajectories and tactics of HBB formation

While there has been some academic research on the role of tipping points within entrepreneurship studies (Massetti, 2008; Tjosvold and Weicker, 1993), until now there has been a lack of research examining the incidents that give individuals the impetus to be entrepreneurial. More broadly, we also believe that there is utility in phenomenological terms of studying specific incidents, as ‘focusing on specific events enables the participant to provide a fuller, more detailed description of an experience as it was lived’ (Thompson et al., 1989: 138). The focus here is on those incidents in everyday life that gave the owner-entrepreneurs interviewed the impetus to form an HBB, teasing out the reasons pushing and/or pulling them to act entrepreneurially. As shown in Table 1, the 21 HBB owner-entrepreneurs interviewed cited 107 incidents that were divided into broad organisational categories of ‘personal’ and ‘work’ which, despite a degree of functional overlap, represent distinct social spheres of everyday life. In coding the 107 incidents, 15 sub-categories of incident were established, seven of which related to personal life and eight to work life. In addition to the incidents that led to the formation of HBBs, the interviewees were asked to identify the tipping point following which the HBB was created.

Table 1.

Incidents initiating formation of HBB.

	Incident leading to establishment of HBB	Respondent																					Total incidents (critical incidents)
	Incident leading to establishment of HBB	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21
Work Personal	Experience (i.e. accumulated skills/knowledge)			•			•	•	•				•	•	•	•	•	•	•		•	•	13
	Confidence			•			•	•	•				•	•	•	•	•	•	•		•	•	13
	Desired autonomy/self-employment		•	•			•	•	•			•	•	•			•		•	•		•	12
	Improved lifestyle/flexible hours						•		•		•		•	•	•	•				•	•	•	10
	Age			•									○					•		•			4(1)
	Domestic/family care arrangements				•					•	○							•		○	○		6(3)
	Increase income/make more money				•			○			•	•										•	5(1)
	Redundancy/made unemployed			○			○			○						○	○		○			○	7(7)
	Employer offers freelancer contract								○						○	•	•	○	•		•		7(3)
	Other offers of freelance work				○				•				•	•	•		•				•		7(1)
	Former employer restructuring/personnel changes									•				•	•	•		•	•			•	7
	Disillusioned/unhappy with current employer							•		•				○						•	•	•	6(1)
	Niche created/discovered	•	○									•		•						•			5(1)
	Sector changes in the creative industries	○										•				•							3(1)
	Previous partnership ended					○						○											2(2)
	Total	2	2	5	3	1	4	5	5	4	3	5	7	7	6	7	6	6	6	6	7	8	107(21)

The findings show that the number of incidents is broadly balanced between personal life and work life overall, accounting for 59 percent and 41 percent of incidents respectively. Interestingly, all apart from three of the HBB owner-entrepreneurs cited both personal life and work life incidents, of whom two referred to incidents in their work life and one who referred to incidents in his personal life. This finding highlights the entwined interdependence of personal life and working life, and affirms that these spheres of everyday life cannot, and should not, be considered in isolation when understanding the formation of an HBB. When it came to the tipping point or critical incident, 16 out of 21 owner-entrepreneurs identified a work life-related incident as the reason why they established their HBB. Clearly, there are contingencies associated with the incidents, which contingency theory explains as related to individual characteristic traits and the importance of the entrepreneurial environment, but these need to be understood in relation to the individual (Gilad and Lavine, 1986; Storey, 1994). While not employing a contingency model per se, the incidents are considered as ‘contingency-like’ in how they shape the trajectories of HBB formation.

Personal life incidents

Much of the academic literature views incidents related to personal life or other domestic situational factors as pushing people into entrepreneurship out of necessity. However, the seven incident categories relating to the personal life of the HBB owner-entrepreneurs interviewed cannot be simply classified as either push or pull factors, since there is often evidence of both. Moreover, such incidents relating to an individual’s personal life are also the outcome of other socio-economic characteristics and experiential competencies, such as education, experience and age (Block and Wagner, 2010; Giacomin et al., 2007). This section considers the personal life incidents of the HBB owner-entrepreneurs interviewed.

The most cited personal life incidents were the importance attributed to having the accumulated skills and knowledge, as well as the experience and confidence, to go it alone and start a business. While distinct, these incidents often were mentioned together, which is consistent with Shane (2000) who describes ‘prior knowledge’ as crucial to the success of a new business start-up. Similarly, Henley (2005) noted the importance of self-confidence and self-reliance in starting a business, and many of the interviewees emphasised this sentiment:

Having worked as a product designer for 15 years I knew the trade, I had the knowledge, but starting my business was a whole other ballgame I had to learn to play, so I started learning the rules. [HBB/INT2/PWRTV]

My ambition was to work for myself, but even with the skills it took me years to get the confidence to actually make the jump from working for [X, former employer]. [HBB/INT16/TV]

Out of the 13 interviewees who cited incidents referring to the importance of experience and confidence, none identified these factors to be a critical incident or tipping point. Therefore, while acquiring the necessary experience in terms of knowledge and skills is important, it is unlikely to lead to an individual establishing an HBB alone. One related recurring point was the belief that one can never have too much experience or be too skilled, and therefore highlighting the importance of other incidents. While the accumulation and acquisition of experience defines the trajectories of the HBB owner-entrepreneurs, the interviews also highlighted the tactics employed to achieve this. Confidence is much less quantifiable than experience, and did not necessarily correlate with an individual’s experience: indeed, there were numerous examples of very experienced individuals who simply did not have the confidence to start a business. Interestingly, while a lack of confidence was found to have held the interviewees back from starting a business, finding the confidence necessary was never cited as the tipping point or critical incident. This supports the view of McGee et al. (2009) that aspiring entrepreneurs need to have self-confidence and self-efficacy in their entrepreneurial abilities before they are willing to start a business – a trait that differentiates entrepreneurs from employees – yet having confidence was not perceived to be a reason to start the business in itself.

In terms of sector-specific experience, in referring to this incident all of the owner-entrepreneurs had worked previously in the creative industries. However, tactically, in developing the necessary experience and competence of the sector, several of the HBB owner-entrepreneurs had sought to take on more strategic roles or responsibilities with their previous employers. This supports the findings of Sørensen and Fassiotto (2011), who observed the importance of good management practice that prospective entrepreneurs learned from their employers, serving as founts of entrepreneurship. However, only two out of the 14 sought any formal business advice in establishing their HBB, thereby affirming the importance attributed to experience over training. This highlights the difficulties from a policy perspective of stimulating entrepreneurship via business support and training programmes, and again highlights the importance of (self-)confidence in establishing an HBB. It also raises a longstanding issue concerning the uptake of business support and training by entrepreneurs (Gibb, 1987, 1997), and is in keeping with the findings of Raffo et al. (2000), who found that entrepreneurs in the cultural industries rarely took up formal business training and support.

Many of the other owner-entrepreneurs referred to the importance of professional and personal (social) networks in establishing their HBB. The importance of networks to entrepreneurs in the formation of new ventures is widely acknowledged (Jack, 2005; Witt, 2004). To this end, the use of formal and informal networks represented a tactic of the HBB owner-entrepreneur in starting the business:

The real challenge for me was the nuts and bolts of starting the business – I had no idea. It was the support of my partner and an accountant who I knew that saw [the business] become a reality. [HBB/INT17/TV]

At the point when [X, former employer] gave me the option of working on a consultancy basis I jumped at it, as I knew there was other work out there … I found myself a solicitor and an accountant and I was literally in business! [HBB/INT8/PWR]

Consistent with Alsos et al. (2003), the ‘Desired Autonomy/Self Employment’ and ‘Improved lifestyle/flexible hours’ were important although not critical to an HBB being established, being cited by 12 and 10 interviewees respectively. Equally, it should be noted that establishing an HBB was not always borne from a desire to be self-employed, and in some instances was borne out of reluctance when relating to work life. Among the incidents cited, age was frequently referred to in relation to experience, although two of the interviewees made the point that if they had not started when they did, they never would have, and as Block and Wagner (2010) argue, age can have a positive impact on necessity-based entrepreneurship – one interviewee simply stated this:

At my age I was unlikely to get another job, so I started my own company. [HBB/INT12/PWR]

Changing family circumstances, including caring for relatives, childbirth and divorce, were less commonly cited, although the following quotations are evidence of how such circumstances enabled these three women to nurture their entrepreneurial ambitions. In the first case, entrepreneurship provided a means of flexible working around rigid family circumstances:

With my other half working away a lot I couldn’t do a nine-to-five with young children, so working for myself and being based at home was the perfect solution. [HBB/INT20/TV]

One owner-entrepreneur used her maternity leave to provide a low-risk basis to establish her HBB:

I was on maternity leave having my second child … I did think about starting a business when I had [first child], but wasn’t confident enough … but this time I started my maternity leave early and set up working freelance. I was determined to make it work, and I did, but I knew I could go back to work if things didn’t work out. [HBB/INT19/TV]

Another interviewee explained how wide-ranging changes in her personal life gave her the strength and belief to become self-employed:

It all happened at once really. I was pregnant, split with my partner and needed to make a living. At the time I didn’t see it as a choice, I just had to do it. [HBB/INT10/PWR]

While these examples support the findings of seminal studies on HBBs, such as Good and Levy (1992) and Peacock (1994) in demonstrating a range of incidents that relate to personal life, unpacking them highlights the reactionary tactics employed to manage the everyday personal life of the incident that saw the HBB created. Indeed, Giacomin et al. (2011) refer to how ‘family influence’ can be an important factor in affecting the propensity to be entrepreneurial.

As an incident, the desire to ‘increase income/make more money’ was only cited by five out of the 21 HBB owner-entrepreneurs – often as both a push-and-pull factor at once. Such a result would appear to question the importance attributed to maximising economic utility referred to in the literature as a significant reason to pursue entrepreneurial endeavours. As such, it might be a useful direction for future research to undertake a similar study with individuals in the process of setting up their businesses and then, after a given period of time, seek to re-interview them with the aim to elucidate if the importance they attach to different factors changes over time. The response of one owner-entrepreneur highlighted profit as a motive for entrepreneurial pursuits, and described in De Certeau’s terms their tactical commitment to achieve it:

I couldn’t go on working for such a low wage, especially since I knew that I was worth more. So I said to myself that I would work as hard as I need to so I didn’t need to be an employee – if that meant working 100 hours per week, then that’s what I’d do, ’cause it was lining my pocket and not theirs. [HBB/INT7/PWR]

Overall, it can be observed that there is a broad range of personal-life incidents affecting the trajectories of the HBB owner-entrepreneurs. It is quite telling that although 59 percent of incidents related to the personal life of those interviewed, only 24 percent of tipping-point incidents did. While many of the points raised in this discussion are relevant to entrepreneurs more generally, Table 2 shows the responses when asked about the reasons for locating at home rather than in other premises. Interestingly, of the 21 respondents, only four said that they would have started a business in premises other than the home, and of the remainder, 10 stated that it would have been unlikely that they would have started a business if it had not been home-based. The two most prominent reasons for locating at home were that there was sufficient space (17 respondents), and that locating at home was cost-effective and incurred less risk (18 respondents). The home was depicted as an adaptable and versatile space to provide greater flexibility than commercial alternatives, and four owner-entrepreneurs identified the possibility of expanding the business at home either into existing or newly-developed, purpose-built extensions or annexes. This also supports existing research that owner-entrepreneurs harbour aspirations to grow their HBBs.

Table 2.

Reasons for choice of home as premises.

	Respondent
	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21
Having the space	•	•	•	•		•	•	•	•	•	•	•	•	•	•	•			•	•
Cost-effective	•	•	•		•	•	•	•	•		•	•	•	•	•	•	•		•	•	•
Convenient for travel in the Sheffield City Region	•	•	•			•	•	•	•	•			•	•	•	•	•		•	•
Convenient for travel beyond Sheffield City Region			•	•		•	•	•	•				•	•	•	•			•
Near clients	•	•	•			•	•	•	•	•				•	•	•		•		•
Permits work flexibility	•					•				•			•	•	•			•		•
Near previous employer	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•	•
Scope to expand at home base				•					•					•
Other					•							•

In contrast with earlier studies on HBBs, which found that most businesses located at home because of domestic issues (Good and Levy, 1992; Peacock, 1994), the present findings corroborate Mason et al. (2010), who found that most HBBs locate at home due to costs. This was found to be particularly acute, given that the fieldwork coincided with the midst of the financial crisis and perhaps expectedly, as outlined in the following section, explains why a high proportion of critical incidents related to work life. Among other factors, location was cited as an important factor for where the home was, either near to existing clients or providing a commuting base, while a less significant locational factor was being near to their previous employer. As noted above, working flexibility was less significant, cited by only eight respondents locating at home rather than in other premises. Conversely, in several cases, this flexibility of locating at home was considered in a negative fashion, with the interviewees explaining that ‘work is always with you’ [HBB/INT4/PWRTV] and ‘you can’t get away from work when it’s always in the next room’ [HBB/INT11/PWR]. Such views align with the findings of Baines (2002), who found that the home can be an awkward place to work, lacking adequate space to accommodate the competing demands of work and domestic life. Such differences in the viewpoints on this specific factor demonstrate the diversity of incidents affecting owner-entrepreneurs’ behaviour. While being an HBB can provide a number of potential benefits, at the same time the overlap of work and personal spaces can lead to tensions in everyday life as a result of carrying out public (work) roles in a milieu normally considered to be a private (personal) place (Marsh and Musson, 2008).

Work life incidents

The former everyday work(ing) life of the owner-entrepreneurs was slightly less significant in terms of the overall number of incidents to establish a HBB. However, more than 75 percent of the tipping-point incidents still related to work life factors (see Table 1). The most cited work life incident was that of redundancy. Redundancy is often cyclical and closely tied to downturns in the economy, which leads Hytti (2010) to conclude that transition from redundancy into entrepreneurship is likely to become an increasingly normal trajectory. On this basis, redundancy can be understood as a push factor, as the prospect of being unemployed was a highly significant incident in the trajectory culminating in the formation of an HBB, albeit for different reasons. The interviews highlighted examples of necessity-based entrepreneurship, where the decision to start the business was taken in the absence of other alternatives:

[X, former employer] was restructuring the business and my department was being closed … I looked for a job but there weren’t really any other jobs out there … [So] I took up the offer to work for [X] on a freelance basis, and made the most of it. [HBB/INT15/PWR]

In addition, some of the owner-entrepreneurs conveyed their reluctance to become self-employed, but took the tactical decision to do so – in De Certeau’s terms, what might be colloquially described as a ‘survival strategy’. Forming an HBB was regarded as a means to negotiate the economic realities faced in light of redundancy or unemployment. It is important to note that redundancy was not always forced; in two cases it was voluntary, and it was the redundancy package that tactically enabled the HBB to be created. This challenges contemporary debates which have seen negative connotations associated with necessity entrepreneurship generating employment but not always growth (Wennekers et al., 2005). However, necessity also can motivate, and even force a pursuit of entrepreneurship that otherwise would not have been pursued if the founding entrepreneur had remained in employment. The same interviewee as above explained how redundancy was a positive catalyst:

Being made redundant gave me the kick I needed to set myself up as an independent – if I’d not have been made redundant, then I wouldn’t have my own company now … I’m making more money now than I was then and I enjoy it! [HBB/INT15/PWR]

I took voluntary redundancy and the package I got actually gave me the breathing space and resources to set up [the business] … I always wanted my own business, and thought I’d be good at it, but leaving my job to do it was too much of a risk … Anyway, things worked out for the best. [HBB/INT6/PWRTV]

The push of redundancy as an incident led some respondents to pursue entrepreneurial activities, and thereby inadvertently reduced the gap associated with the pull of pursuing opportunity-based entrepreneurship. This is consistent with Kautonen and Palmroos (2010), who note that necessity-based entrepreneurship can evolve as further entrepreneurial opportunities emerge. The present results suggest that it is not possible to differentiate between the incidents as either necessity and/or opportunity-driven, since each incident is specific to the trajectory of each individual and can include elements of both. As the previous three interview extracts demonstrate, redundancy as an incident incorporates both push and pull factors, combining both necessity and opportunity, so it is best understood as an incident combining mixed motivations (Verheul et al., 2010). In the case of all of the formerly redundant HBB owner-entrepreneurs interviewed, there was a consensus that becoming self-employed was the best option in hindsight, although it was not necessarily the preferred option or trajectory at the time. Indeed, it was apparent from the interviews that over time, a number of necessity-based entrepreneurs had become more opportunity-orientated. Related to redundancy is when a previous partnership ended, although in both cases the former partners went on to start new HBBs – the owner-entrepreneurs concerned explained:

When [Y, business partner] first told me he wanted to retire, I initially panicked about being unemployed – which was stupid, as I was self-employed anyway! I needed a new strategy, so we dissolved the partnership. I set up on my own when he retired and then took someone on to help with the work about six months later. [HBB/INT5/PWRTV]

The business had not been doing great. [Z, business partner] was not that ambitious and I wanted more, so we split. I knew that the [design] business was changing and thought that I could specialise … so I set up on my own. [HBB/INT11/PWR]

As with redundancy, there is an element of necessity associated with these examples where the partnership has ended. In the case of the retiring partner, the interviewee initially conveyed the incident in terms of entrepreneurial push, although quickly came to focus on the opportunity. In the second example, the entrepreneurial ambition of the interviewee is apparent, and having identified a new niche, he/she saw ending the current partnership as a tactic to go it alone. These excerpts also highlight an important point about how an individual’s perception or interpretation of an incident can change: that, is an incident initially viewed as negative came to be recast as positive. If everyday life could be researched in real-time, it would be fascinating to explore how the circumstances around and thinking about incidents evolved, although this is not possible when recalling events that happened a long time previously.

Another incident that was found to be important was the initial offer of work, whether from a current employer or elsewhere, which 10 respondents cited as a factor, and of which four stated the initial offer of work to be the tipping point. As one of the respondents stated:

I’d had a few offers of private work before, but it was only really when [X, former employer] was restructuring following a merger and gave me the option to work for them on a freelance basis, that I realised I could make a real go of being self-employed. [HBB/INT14/PWR]

In this case, the prospect of being an employee initially suppressed this interviewee’s entrepreneurial ambition, chiefly because being employed was lower risk and therefore reduced the incentive to establish a business. Deakins and Freel (2006) refer to the entrepreneur as someone who is prepared to undertake risk in an uncertain world in return for the prospect of reward, and it is interesting how the prospect of work can encourage owner-entrepreneurs to take that risk. Where an employer undertook organisational restructuring and this gave rise to entrepreneurial opportunity, this changed this perception of risk associated with starting a business. Flores and Gray (2000) contend that this trend is likely to become more common as employees become ‘journeymen’ marketing their skills to many buyers – a trend which resonates with the transition from employee to self-employed freelancer described by Ekinsmyth (1999, 2002). However, none of the interviewees citied organisational change or restructuring as a tipping-point incident; rather, they regarded it as affecting their HBB creation trajectory. As an incident, organisational change or restructuring serves to challenge the push/pull dichotomy.

Another important subset of incidents concerns different forms of disruption in the workplace, primarily relating to the organisation and experience of employment. The most prominent of these incidents related to personnel changes with the current employer. Of the seven HBB owner-entrepreneurs who cited personnel changes as an incident, three were related to wider organisational restructuring following an acquisition or merger. While none of the interviewees citing personnel changes and/or organisation restructuring viewed them to represent the tipping point incident, they were regarded as cumulative factors. The following excerpt is from an individual who had explained how he had harboured a desire to work for himself, and although he cited voluntary redundancy as the tipping point, this came about as the result of personnel changes and the fact that he was not enjoying work:

Things were changing at work. There was a new, clueless senior management team … I was just getting fed up with the place anyway, so the day they offered voluntary redundancy I spoke to my wife and applied the next day. [HBB/INT9/PWR]

This supports the findings of Kirkwood (2009), who highlights how job dissatisfaction can serve as an incident in the evolution of the entrepreneurial self: in this case, the redundancy package allowed the interviewee to fund the start-up of his business. While such incidents might be attributed as examples of entrepreneurial push, it is not as simple as designating them as either necessity or opportunity-based since there is an element of both involved. Only one HBB owner entrepreneur cited such an incident as a tipping point, and in so doing explained it as a cumulative tipping point:

I’d not been happy at work for a while. It didn’t matter how well or how hard I worked, I went unnoticed – and worse still, the other staff were poor and nobody cared. In the end I just decided I could do it by myself. [HBB/INT13/PWR]

Here, it was the perception of the interviewee about their own position as an employee and the perceived performance of fellow employees that prompted them to pursue an entrepreneurial career. Again, as an incident this is not easily categorised, since it incorporates aspects of push and pull, and is not immediately motivated by necessity or opportunity. However, this incident did shape this individual’s trajectory and culminate in the formation of a HBB.

Of the 21 interviews, five explained how they had established a niche in their particular sector: an incident that would appear to embody the notion of opportunity-based entrepreneurship. However, only one of the interviewees cited this as a tipping-point incident in establishing a HBB, stating:

I always wanted to be my own boss … I came up with a unique business idea when I was at university, and the course tutor said I should seriously think about starting my own business … In my final year I was working more on my business than my degree, but now I have the degree and my own business. [HBB/INT2/PWRTV]

This HBB owner-entrepreneur was the youngest interviewee, and their perception of risk was considerably lower, also referring to the fact that they had ‘nothing to lose’ in starting the business. Starting the business at university and operating out of his room in student accommodation was low risk, and provided a means to test the viability of the business without any other substantial personal or working commitments (i.e. family, mortgage, job, etc.). Interestingly, this was the only example of where the niche was ‘created’ by the owner-entrepreneur, thereby highlighting Fletcher’s (2004) distinction as to how such entrepreneurial opportunities come about. All the other owner-entrepreneurs interviewed referred to having ‘discovered’ a niche, whether this was borne out of necessity or otherwise, which supports the work of Van Gelderen et al. (2005), who assert that experience in a given industry helps in identifying and assessing new business possibilities. Indeed, as two of the interviewees noted, discovering their niche was as a result of wider sector changes in the creative industries:

It [advertising] is a fast-moving sector, and you need to respond to the trends – if you don’t, you die. [HBB/INT11/PWR]

I never planned or even really wanted my own business, but things change and I had an idea … If I hadn’t done it when I did, then someone else would have. [HBB/INT1/PWRTV]

The empirical study found that it was more common among the HBB owner-entrepreneurs, who stated that having a niche was the reason for starting their HBB, that the niche was discovered rather than created.

Conclusion

While hitherto HBBs have been largely ‘invisible’ in terms of the official business statistics and have not been a significant focus of academic and political debate, this is set to change with the blurring of the simplistic work/home dichotomy (Wapshott and Mallett, 2012). As such, HBBs represent an increasingly important sector of post-industrial economies such as the UK, and this article contributes to the emergent body of research on HBBs that differentiates them from other forms of business. By examining the complex nature of everyday life, this article focuses on those home and work life incidents that have led to the creation of HBBs and the emergence of a new breed of HBB owner-entrepreneurs. The findings identify the diverse myriad of incidents that led the owner-entrepreneurs studied to start their HBB, and highlights that a high proportion of the owner-entrepreneurs interviewed would not have started a business, had it not been home-based.

This article contributes to the literature by understanding why individuals form HBBs. In unpacking the diverse range of incidents, the complex trajectories of owner-entrepreneurs serve to challenge the view that it is possible to simply differentiate between opportunity-based and necessity-based entrepreneurship. Instead, the findings show that incidents leading to the entrepreneurial step need to be understood in relation to other incidents and the trajectory of the owner-entrepreneur, and therefore go some way to respond to calls for a greater appreciation of the different reasons that underlie entrepreneurial behaviour and advocate the view of the ‘average entrepreneur’ (see also Gartner, 2010). To this end this article adds to the growing literature that seeks to explore the linkages between entrepreneurial motivations and the life course of individuals (Jayawarna et al., 2011).

Suggestions for further research

Given that the empirical focus of this article is the creative industries in the Sheffield City Region, the findings are not statistically generalisable, although they do provide insights into the reasons for the formation of HBBs and highlight the need for developing this work. In keeping with Mills and Pawson (2011), the everyday life incidents have been shown to encompass amalgam factors, although further research is required to understand how these incidents relate to each other. In particular, acknowledging the importance of timing, identified by De Certeau (1984), there is merit in understanding the temporality of everyday life incidents in the formation of HBBs, but also businesses more generally. The Lefeverian concept of rhythm analysis provides a suitable lens through which to extend this research and understand how the timing of incidents relate to each other, as well as other aspects of everyday life (personal and work). Although this article has focused on the tactical formation of HBBs by owner-entrepreneurs in terms of their trajectories, individuals cannot be considered separate from the strategic or institutional spheres of everyday life.

Implications of the study for policymakers

This study was conducted against the backdrop of financial austerity in the UK, at a time when the government is striving to foster economic resilience and growth premised on entrepreneurship. Mason et al. (2010) identify the need for a much stronger evidence base if governments are to develop effective enterprise policy, and therefore this article takes an important step by understanding better the dynamics of HBBs as a subset of small business. More specifically, having a greater appreciation of the experiences of HBB owner-entrepreneurs is necessary if policy is to support prospective entrepreneurs better in establishing businesses, and HBBs in particular. While it is necessary to exercise caution when distilling policy lessons from a single case study, one particular challenge facing policymakers includes overcoming the gap between the provision and take-up of business advice and related training. Where, in De Certeau’s terms, those strategies related to promoting HBBs are effectively developed, the tactical response of more prospective entrepreneurs to everyday life incidents would result in an increase in the number of HBBs. Further research into HBBs and the experience of HBB owner-entrepreneurs would supplement the evidence base that is necessary to develop better policy.

While HBBs have been largely invisible in terms of academic and policy debate, they are an emerging and increasingly important feature of the business landscape. This article has focused on understanding the trajectories of HBB owner-entrepreneurs and the everyday life incidents that led to the formation of HBBs. The lens of everyday life, coupled with the qualitative approach of the empirical project, has illuminated the incidents encountered by HBB owner-entrepreneurs during their life courses, and while these share common incidents, each are subject to their individual idiosyncrasies. It is only by recognising and exploring these idiosyncrasies that HBBs will be better understood, so if this article stimulates further research into the tactics and strategy of everyday life of HBB owner-entrepreneurs, it will have been successful in its contribution.

Footnotes

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Author biographies

Tim Vorley is a Lecturer in Entrepreneurship at the Management School, and Deputy Director of the Research Exchange for the Social Sciences, University of Sheffield. His research interests include entrepreneurship and regional development in the UK, and he continues to pursue work on the resilience of UK regions as well as examining city-regions across south-east Europe.

Peter Rodgers is a Lecturer in Strategy and International Business at the Management School, University of Sheffield. His research interests include both formal and informal entrepreneurship, and he has previously published widely on transition economies. He is also working on several projects examining the transformation of the Sheffield City Region.

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