The Changing Economy: A Demographic & Vertical Industry Profile of the SOHO Business Market (1-4 Employees)

Despite being home to the most nimble and untraditional businesses in the US, the SOHO business market suffered greatly in last year's economic down turn. This market shrank in size and growth dramatically, falling to just over 8.2 million firms, down more than 7% from the year before. Though micro-businesses like these are able to respond to market changes more quickly than their larger competitors, in difficult times, these are the businesses that generally suffer greatest.

Luckily, these businesses are also the first to benefit from improvements in the economy, with In-Stat/MDR expecting the SOHO business market to show positive growth this year. This market is expected to grow to more than 8.3 million firms, employing nearly 18 million workers. Over the next several years this market should show steady growth and is expected to reach more than 9.5 million businesses by 2006.

Executive Summary

Methodology

Forecasting Techniques

Definitions

Structured Research Sources

Technology Adoption Panel (TAP) Research

US Census Published and Tabular Data

US Bureau of Labor Statistics

Bureau of Economic Analysis

Department of Commerce

Change in Scope of Demographics

SOHO Business Demographics

Number of Firms

Number of Employees

Work Environments

Employment by Primary Location, 2002-2006

Remote and/or Mobile Workers in the US Market

Telecommuters in the US Business Market

Internet-accessing Telecommuters in the US Business Market

Internet-accessing Telecommuters in the SOHO Business Market

Remote Branch Offices in the US Business Market

Remote Branch Offices in the SOHO Business Market

Perceptions…

Perceptions at the End of 2001

Impact on Expected IT Spending

Expected Areas of IT Investment

Demographics by Vertical Industry

Firms

Establishments

Employment

Segmentation of Firms by Industry

Segmentation of Establishments by Industry

Segmentation of Employees by Industry

Mining

Definition

Demographics

2001 In Review

Mining in the SOHO Business Market

Construction

Definition

Demographics

2001 in Review

Construction in the SOHO Business Market

Manufacturing

Definition

Demographics

2001 in Review

Manufacturing in the SOHO Business Market

Transportation, Communication, and Utilities

Definition

Demographics

2001 in Review

TCU in the SOHO Business Market

Wholesale Trade

Definition

Demographics

2001 in Review

Wholesale Trade in the SOHO Business Market

Retail Trade

Definition

Demographics

2001 in Review

Retail Trade in the SOHO Business Market

Finance, Insurance, & Real Estate (FIRE)

Definition

Demographics

2001 in Review

FIRE in the SOHO Business Market

Services

Definition

Demographics

2001 in Review

Services in the SOHO Business Market

Government

Definition

Demographics

2001 in Review

Government in the SOHO Business Market

Conclusion

List of Tables

Table 1. Number of Firms - SOHO Businesses, 2002-2006

Table 2. Number of Employees - SOHO Businesses, 2002-2006

Table 3. Employment by Primary Location- SOHO Businesses, 2002-2006

Table 4. Number of Remote & Mobile Workers - US Business Market, 2002-2006

Table 5. Number of Telecommuters - US Business Market, 2002-2006

Table 6. Number of Internet-accessing Telecommuters - US Business Market, 2002-2006

Table 7. Number of Internet-accessing Telecommuters - SOHO Businesses, 2002-2006

Table 8. Number of Remote Branch Offices - US Business Market, 2002-2006

Table 9. Number of Remote Branch Offices - SOHO Businesses, 2002-2006

Table 10. Number of Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 11. Number of Mining Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 12. Number of Construction Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 13. Number of Manufacturing Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 14. Number of TCU Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 15. Number of Wholesale Trade Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 16. Number of Retail Trade Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 17. Number of FIRE Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 18. Number of Services Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

Table 19. Number of Government Firms, Establishments, and Employees by Industry - SOHO Businesses, 2002

List of Figures

Figure 1. Number of Firms and Employees (in Millions) - SOHO Businesses, 2000-2006

Figure 2. Employment by Primary Location (% of Employees) - SOHO Businesses, 2002

Figure 3. Perceptions of Economic Performance - SOHO Businesses, Q4 2001

Figure 4. Expected Impact of Perceived Economic Changes on IT Spending - SOHO Businesses, Q4 2001

Figure 5. Areas of Planned IT Investment in 2002 - SOHO Businesses, Q4 2001

Figure 6. Segmentation of Firms by Industry - SOHO Businesses, 2002

Figure 7. Segmentation of Establishments by Industry - SOHO Businesses, 2002

Figure 8. Segmentation of Employees by Industry - SOHO Businesses, 2002

Figure 9. Number of Firms (in Thousands): Mining - US Business Market, 1996-2003

Figure 10. Number of Employees (in Thousands): Mining - US Business Market, 1996-2003

Figure 11. Number of Mining Firms, Establishments, and Employees - SOHO Businesses, 2002

Figure 12. Number of Firms (in Thousands): Construction - US Business Market, 1996-2003 26

Figure 13. Number of Employees (in Thousands): Construction - US Business Market, 1996-2003

Figure 14. Number of Construction Firms, Establishments, and Employees - SOHO Businesses, 2002

Figure 15. Number of Firms (in Thousands): Manufacturing - US Business Market, 1996-2003

Figure 16. Number of Employees (in Thousands): Manufacturing - US Business Market, 1996-2003

Figure 17. Number of Manufacturing Firms, Establishments, and Employees - SOHO Businesses, 2002

Figure 18. Number of Firms (in Thousands): TCU - US Business Market, 1996-2003

Figure 19. Number of Employees (in Thousands): TCU - US Business Market, 1996-2003

Figure 20. Number of TCU Firms, Establishments, and Employees - SOHO Businesses, 2002

Figure 21. Number of Firms (in Thousands): Wholesale Trade - US Business Market, 1996-2003

Figure 22. Number of Employees (in Thousands): Wholesale Trade - US Business Market, 1996-2003

Figure 23. Number of Wholesale Trade Firms, Establishments, and Employees - SOHO Businesses, 2002

Figure 24. Number of Firms (in Thousands): Retail Trade - US Business Market, 1996-2003

Figure 25. Number of Employees (in Thousands): Retail Trade - US Business Market, 1996-2003

Figure 26. Number of Retail Trade Firms, Establishments, and Employees - SOHO Businesses 2002

Figure 27. Number of Firms (in Thousands): FIRE - US Business Market, 1996-2003

Figure 28. Number of Employees (in Thousands): FIRE - US Business Market, 1996-2003

Figure 29. Number of FIRE Firms, Establishments, and Employees - SOHO Businesses, 2002

Figure 30. Number of Firms (in Thousands): Services - US Business Market, 1996-2003

Figure 31. Number of Employees (in Thousands): Services - US Business Market, 1996-2003

Figure 32. Number of Services Firms, Establishments, and Employees - SOHO Businesses, 2002

Figure 33. Number of Organizations (in Thousands): Government - US Business Market, 1996-2003

Figure 34. Number of Employees (in Thousands): Government - US Business Market, 1996-2003

Figure 35. Number of Government Firms, Establishments, and Employees - SOHO Businesses, 2002