The Difference Between Small Business and Home-Based Business

Post by: Jennifer Baszile

Many entrepreneurs mistakenly assume that small business and home-based businesses are the same. They are not. In fact, small business and home-based business operate on two entirely different business models and are defined in unique terms.

Ever wondered what’s the difference between small business and home business? For new entrepreneurs it’s an important question that too many people forget to ask. After lots of thought, research, and consideration here’s the essence of the matter. The short answer is scale versus lifestyle.

Small businesses are what the name implies: small-scale operations. They have a handful of employees, minimal profits and operations. Small businesses do not dominate their industry, or even play a major role. Even though small businesses create countless jobs in the economy and are a source of innovation, they are, by definition, peripheral. Many new and aspiring entrepreneurs use the term small business when they really mean home-based business.

The home-based business model is entirely different than the small-business model. A HOME-BASED BUSINESS IS A MODEL DEFINED BY LIFESTYLE. Don’t be fooled by the "home" in home-based business. It’s not a model that revolves around place. Even though the primary office location is at home, home is a concept open to interpretation.

The internet has revolutionized the home-based business model and has made it truly and completely portable. Your home can be anywhere in the world. Feel at home on the beach? Wonderful. Want to make Argentina home for six months? Fine. You can run your business.

Home-based business is quaint only if you want it to be. The best news is that it has no limitations in terms of the scale of the enterprise or potential profits. Home-based businesses eliminate most of the downsides of small business. No more panic about making rent or payroll in lean times. No more exorbitant production or manufacturing costs. No more doing business in the minor leagues of the industry. With the right training, proper business model, and plenty of community support, there’s nothing small about home-based business.