Local Government Support Programs for Home-Based Businesses: Challenges and Strategies

Abstract

Small businesses play a significant role in the Australian economy, yet an increasing number of them are home based and relatively small operations. These home based businesses, (HBBs) actually account for some 67% of the small business sector in Australia. Due to their large number, they are a politically and economically important grouping, thus attracting policy attention from various levels of government. Previous studies of home based businesses reveal that HBBs do face significant problems and could benefit from government support. Local government is the obvious first contact point with HBBs. However, HBBs contacting local government is not common, as these businesses prefer to remain anonymous as much as possible. These firms are often wary of government contact due to a belief that it will lead to some restraint on the business and because these HBBs are not readily identifiable, it is a difficult task for local government to engage with them.

This paper reports on a study of the role local governments play in facilitating and supporting the home based businesses in the State of Victoria, Australia. It involved telephone interviews with representatives of all of the local government jurisdictions in the State together with a survey of their websites. In-depth interviews were subsequently undertaken with 20 selected councils running local support programs. This study reports on the various forms of assistance provided to home based businesses. The findings indicate that the levels of assistance provided are related to the perceived level of need for employment-generating business activity in the local municipality. The paper analyses the various forms of assistance and identifies specific forms of assistance that are more likely to be associated with supporting the development and employment generating capacity of home based businesses.

Keywords: home-based business, support programs, local government