Conducted on behalf of Whittier Alliance, 612/871-7756. Sponsored by Neighborhood Planning for Community Revitalization, Center for Urban and Regional Affairs, University of Minnesota

Brothers, John

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CURA RESOURCE COLLECTION 
Center for Urban and Regional Affairs 
University of Minnesota 
330 Humphrey Center 
Whittier Alliance 
Home-Based Business Results 
by John Brothers 
November 1995 
Neighborhood Planning for Community Revitalization 
(NPCR) supported the work of the author of this report but 
has not reviewed it for publication. The content is solely 
the responsibility of the author and is not necessarily 
endorsed by NPCR. -
NPCR is coordinated by the Center for Urban and Regional 
Affairs at the University of Minnesota and is funded in part 
by an Urban Community Service Program grant 
administered by the U.S. Department of Education. 
NPCR 
330 HHH Center 
301 19th Avenue South 
Minneapolis, MN 55455 
phone: 612/626-1020 
e-mail: nelso 193@maroon.tc. umn.edu 
Whittier Alliance Home-Based Business Results 
Presented by John Brothers: 
Undergraduate Research Assistant 
to the 
Whittier Alliance Neighborhood Association 
November 29, 1995 
9 
Table of Contents 
Acknowledgments Page 1 
. Executive Summary Page 2 
Purpose of Study Page 4 
Scope and Methods Page 5 
Conclusions and Recommendations Page 7 
Appendices: Page 9 
Home-Based Business Survey ' 
Home-Based Business Survey Results* 
10 
Acknowledgments 
I would like to thank the following people for devoting time and 
expertise to providing information, advice and assistance to undertake 
this study: Mark Anthony, President of the MN Home-based Business 
Association; Michelle Bloom, Powderhorn Neighborhood Association; 
Kris Brogan, Associate Director of the Whittier Alliance; Nilesh 
Chokhani, assistant with the study; Pat Dinehart, Whittier Alliance 
Executive Director, Dr. Stephen Hoffman, political science professor at 
the University of St. Thomas; Ann Hopkins, Whittier Alliance board-
member; Sasha Peterson, Marcy-Holmes research assistant, and Lisa 
Thomas, a real sown-to-earth secretary with the Whittier Alliance and 
a barrel of thanks 10 the whole Whittier Alliance organization. Your 
work is making the Whittier Alliance a place where all people, not just 
in Whittier, can see community and appreciate the word 
"neighborhood". 
1 
... ---._ - . 
Executive Summary 
A survey of home-based businesses has been completed for the 
Whittier neighborhood in Minneapolis to determine the needs for 
ho~e-based businesses in that area. The study was founded by the 
Neighborhood Planning for Community Revitalization (NPCR) program 
V 
through the University of Minnesota and employed John Brothers, an 
undergraduate student at the University of St. Thomas majoring in 
Political Science and Public Administration, to identify home-based 
businesses, conduct a survey and make recommendations to the 
Whittier Alliance as to ways in facilitating a home-based business 
network and to create an outlet to start a home-based business 
chapter in the Whittier AHiance organization. 
"Home-based htJ.sinesses are a large and growing component of 
employment nationally, and home-based business entrepreneurs 
comprise between 8% and 20% of the national working population, or 
between 10 million and 24 million people (the count varies according to 
the source, partly because ·home-based businesses are difficult to 
define and locate, and because the federal government does not 
regularly attempt to count them). National trends such as corporate 
downsizing, telecommunication advances, and need for greater 
worktime flexibility has contributed to the growth in home-based 
businesses and home work generally" (Sasha Peterson, Marcy-Ho.Imes 
neighborhood survey report). 
Within the Whittier neighborhood, 184 home businesses were 
identified. Judging from national figures there are actually between 
800 and 1200 home-based businesses in Whittier. 
2 
. Most home-based businesses were artist-related or business 
consulting orga:t;iizations, though there was great variety in all of the 
home-based businesses. Most of the surveyed were men, and there 
were more entrepreneurs -that worked full-time than part-time. Most 
people were working out of there home primarily because of the 
flexibility and low overhead of conducting a business. 
The major advantage of owning a home-based business in 
Whittier was the neighborhood's valuable accessibility to downtown 
and Uptown. The major needs identified were for networking and 
access to business loans and areas of marketing. Respondents wanted 
more funding through loans so that they could advertise. 
Several people felt that help with taxes and banking was pivotal 
in the success of their business. A few individuals also expressed 
interest in acquiring some sort of technical support and some interest 
was shown in finding more office/work space for their business. 
Home-based businesses have many needs ranging from financial 
to stress, but there are clearly underlining themes. Many areas of 
assistance already exi,st in Minnesota including the University of St .. 
Thomas Small Business Center, Minneapolis Technical College 
Busine~s Consulting Center, West Bank Community Development 
Corporation, west Bank Community development Corporation, 
American Association of Home-based Businesses, as well as several 
neighborhood organizations in Powderhom Park, Richfield, and St. 
Paul. 
3 
Purpose of Study 
The Whittier Alliance, through the Whittier Business 
Association, undertook a study of home-based businesses in it's area 
to determine the business needs and their economic impact on the 
neighborhood. 
A grant was applied for and received from Neighborhood Planning 
for Community Revitalization (NPCR), a program administered by the 
University of Minnesota and the Center for Urban and Regional Affairs. 
John Brothers, a undergraduate· student at the University of St. 
Thomas, was hired to carry out the study. 
The purpose of the study as defined by the NPCR in it's 1994 
annual report states: 
"The research assistant will locate the home-based businesses 
and conduct interviews and then develop recommendations for 
supporting these busipesses as part of the neighborhood economy". 
4 
Scope and Methods 
The study covered the geographic area defined as the Whittier 
neighborhood in Minneapolis, for which the boundaries are: Stevens 
Avenue on the east, Lake Street to the south, Lyndale Avenue to the 
, west and Franklin Avenue to the north. This area includes 12,951 
residents with 11 % owner occupied housing. 
The study sought to include all people within this area who were 
self-employed from the home, worked out of the home for more than a 
single employer selling a product or service, part or full-time. All those 
who could be accurately identified were counted, and of those, all who 
agreed to be interviewed were. 
About half of the businesses were identified through word of 
mouth among residents, either at neighborhood meetings or referrals 
from home-based business owners. About half were identified through 
a mailing list maintained by the Minnesota Secretary of State of 
assumed business names. 
Only 182 businesses were identified and 33 were surveyed. 
There were 159 names that appeared to be operating out of homes in 
the study area which were part of the 1994 Minnesota Secretary of 
State's list of assumed business names. Registering on this list i~ 
only a requirement if a business operates under anything but the 
person's name. All but 25 businesses on the list could be contacted 
because they had moved or the phone number was unavailable or 
disconnected. In spite of a poor identification rate, the list may 
suggest a bare minimum of home businesses which exist, and 
indicates that the estimate of hundreds of home-based businesses 
may be accurate. 
5 
Once identified, oral interviews were conducted among all those 
who were willing to participate using a standardized set of 15 
questions. Questions were both open-ended and specific. All the 
interviews were conducted by phone. 
Survey questions addressed demographics of business owner; 
perceived advantages and disadvantages of working from the home; 
specific needs in several areas: marketing, management, financing, 
professional service needs, skills to run the business, space ·needs, 
and interest in a home-based business association. 
Survey design was based on a preliminary understanding of the 
potential needs of home-based businesses from research and 
discussion conducted by John Brothers, who used various research 
methods supplied by the staff at the Minnesota Center for Survey 
research and the staff of the University of Minnesota's Humphrey 
Institute. 
It was very difficult to locate the home-based businesses. While 
there are between 800 and 1200 home-based businesses in the 
neighborhood, only 182 were identified. This difficulty is probably due 
to the lack of visibility of home-based businesses, absence of official 
tracking, confusion over the definition of a home-based business and 
home-based businesses' reluctance to be identified due to long hours 
worked and fear of federal and state regulations. 
Because the sample size is small, 33 within the neighborhood, 
responses from subsets of the sample are not statistically significant. 
Therefore, much of the conclusions based on this data will show areas 
and types of need much more accurately than it will estimate specific 
magnitude of need. 
6 
Conclusions and Recommendations 
Conclusions: 
1. There is a mix of full/ part time and of starting, growing and 
established businesses. This suggests that home-based businesses 
are ~ ongoing, stable part of the neighborhood _economy. This mixture 
also bodes well for starting a sub-committee on the Whittier 
Neighborhood Business Association because it allows people to learn 
from each other and make sound business decisions in concern to this 
subject in the future. 
2. Their is substantial interest in organizing a Whittier Neighborhood 
Home-based Business Association. 
3. Home-based businesses in Whittier serve a variety of employment 
needs: overhead for artists, convenience for residents with business 
pertaining to downtown and Uptown. 
4. While home-based businesses have a variety.of needs, there are 
several common themes: marketing, business advice, help with 
taxation, loans and financing. 
7 
Recommendations: 
1. Start a local home-based business association. This could meet 
with or a separate, less structure group than the Whittier Business 
Association. 
2. Incorporate the attached Home-based Business Directory with the 
Whittier Business Association Directory, and add these Home-based 
Business members to the Business Association mailing list. 
3. Utilize the Minneapolis technical College's low business assistance 
program. They offer three months of ongoing help with marketing, 
business plans, financial projections, and whatever else is needed, for 
$150 flat fee. Jack Oman, contact person. 
4. Contact the University of St. Thomas' Small Business Association 
on ways to market, find loans and help with taxation. Call 962-5000 
and ask for the Small Business Association. 
8 
'WHITTIER-ALLIANCE HOME-BASED BUSINESS SURVEY 1994/95 
A. Home-based business Survey 
Transcript of introductory cornm~nication 
(Hello ! My name is Nilesh Chokhani. I am the research ssistant for the Whittier 1· 
Alliance. The Alliance has asked me to do a survey of home-based businesses in _ 
our neighborhood. The purpose of this survey is to help business in a variety of 
ways such as with loans, networking, marketing etc. I assure you that all · · 
responses will be kept confidential. 
· B. L First, what is the name of your business? 
2. What kind of products and/or services do you offer ? 
3. Is your home-based business your only source_of income? 
1. Yes 11 
2. NO 22 
3. NAGO Other Income Sources ___ _ 
4. Are you the only owner ? How many people are employed at your home-based 
business (including yourself)? · 
# ___ people 
5. What is the most important advantage and most important disadvantage of 
working out of home in general ? 
Advantage ______ _ 
Disadvantage ______ _ 
6. What is the most important advantage and disadvantage of working out of a 
home in the Whittier neighborhood ? 
Advantage _______ _ 
Disadvantage _______ _ 
7. Do you feel that the Whittier Alliance can play a more significant role than its 
current involvement with the neighborhood home-based businesses? 
.1. Yes 11 
2. NO 22 
3. NA00 
4. DK33 
8. Do you work full-time or part-time? 
I. Full-time 
2. Part-time 
3. DK33 
9. What other services would you like to have in your neighborhood related to 
your home-based business? e.g. more copy centers, restaurants, etc. 
I 0. Please rate the following business needs on a scale of 1 through 4. 1 being a 1 
ow need; 4 being an important need. 
Very Important Somewhat Not Very Not important 
4 Important Important at all 
. 
3 2 I 
Networking 
Business Loans 
Marketing 
Le2:al services 
Banking services 
Accounting 
Helo with Taxation 
Business develooment consulting 
Office/Work soace 
Technical suooort 
Stress Management 
11. Have you ever applied for a loan? 
Yes 11 
NAOO 
12. Was it approved? 
Yes 11 
NAOO 
N022 
DK33. 
N022 
DK33 
13. What loan amount would be most helpful for your business 
C. 1. Would you like to generate a higher income for your business? If so what do 
you think is going to be the major barrier in achieving this amount? 
Yes 11 
NAOO 
N022_·_ 
DK33 
If Yes 11 then approximate range ______ _ 
"Impediment 
2. Optional : Racial & Demographic Information 
White 
Black_. 
Asian-American 
Native-American 
Hispanic_ 
Other 
3. Would you be interested in being listed in the Whittier Neighborhood Home-b 
ased business. directory ? 
Yes 11 
NA00 
NO22 
DK33 
4. Would you like to be or1 the mailing list of the Business Association ? 
Yes 11 
NA00 
NO22 
DK33 
5. Which of the following age groups do you belong to.? 
Below 18 
Between 18-23 
Between 23-28 
Between 28-33 
Between 33-38 
38 and above 
6. Do you have 
Less than high-school education_· _ 
High School Education _ 
Some college_ 
Bachelor's degree_ 
Some graduate education_ 
Ph.D. 
-, 
7. Are you a home-owner r 
I. Yes 11 
2. NO 22 
3. NA00 
4. DK33 
8. How long have you owned this business in the Whittier Neighborhood? 
D. I. What was your income last federal year from your business 
negative income ____ _ 
$0-6,000. _______ _ 
$6,000-$12,000 ____ _ 
f' 
$12,000-18,000 ____ _ 
$18,000-24,000 ____ _ 
$24,000-30,000 ____ _ 
$30,000-36,000 ____ _ 
$36,000-42,000 ____ _ 
$42,000-48,000 ____ _ 
$48,000 and above·_· ___ _ 
2. What other concerns do you have about your business ? 
3. How could agencies in the neighborhood, Mpls., County, help your business? 
Results of the Whittier Neighborhood Business Survey 
The existence of 182 home businesses were confirmed in the 
Whittier neighborhood and 33 home businesses were surveyed. 
Results discussed will be for the 33 home businesses in the 
neighborhood only. 
1. Is your home-based business your only source of income? 
l. Yes (69%) 
2. No (31%) 
2. Are you the only owner? 
Sole Proprietor (88%) 
Partnership (12%) 
3. How m~ny people zre employed at your home-based business? 
39% have employees 
4. What is the most important advantage of working out of your 
home? 
flexible (24%) 
convenience (21 % ) 
own boss (18%) 
5. What would be the most important disadvantage of working out of 
your home? 
hard to seperate house from work (24%) 
stuck at home constantly (21 %) 
distractions (15%) 
professionalism (9%) 
6. What is a important advantage of working in the Whittier 
neighborhood? 
location (36%) 
enjoy area (15%) 
assessibi l_ity (12%) and diversity (9%) 
7. What would be a disadvantage of working in the Whittier 
neighborhood? 
crime (51%) 
no money (12%) 
perception of crime (9%) 
8. Do you feel the Whittier Alliance can play a more significant role 
rn the current involvement with the neighborhood home-based 
business? 
Y~s .(45~) 
No (24%) 
declined to answer (24%) 
didn't know (6%) 
9. Do you work full. or part time? 
Full (75%) 
Part (21%) 
Dant'. Know (3%) 
10. Please rate the following business needs on a scale of 1 to 4. 
being low need and 4 being a high need. 
Networking: 
Very Important( 4 )-48% 
Somewhat important(3)-24% 
Not Very Iniportant(2)-21 % 
Not Important(l)-6% 
Business Loans: 
4-27% 
3-27% 
2-27% 
1-18% 
Marketing: 
4-27% 
3-27% 
2-30% and 1-15 % 
Legal Services: 
4-12% 
3-33% 
2-18% 
1-27% 
Banking Services: 
4-18% 
3-27% 
2-27% 
1-27% 
Accounting: 
4-12% 
3-16% 
2-36%. 
1-36% 
Help with Taxation: 
4-18% 
3-21% 
2-36% 
1-24% 
Business Development Consulting: 
4-6% 
3-21% 
2-24% 
1-48% 
Office/Work Space: 
4-15% 
3-18% 
2-30% 
1-36% 
Technical Support: 
4-6% 
3-27% 
2-36% 
1-30% 
Stress Managem~nt: 
4-3% 
3-24% 
2-15% 
1-57% 
11. Have you ever applied for a loan? 
Yes-45% 
No-51 % 
NA-3% 
12. Was it approved? 
Yes-30% 
No-15% 
NA-54% 
13. What is the biggest barrier m acheiving a higher income for your 
business? 
U.S. economy-18% 
employees-15% 
money-15% 
clientele-9% 
· 14. Racial and Demographic information: 
White-87% 
Black-6% 
Hispanic-6% 
15. Which of the following age groups do you belong to: 
18-23-3% 
24-28-6% 
29-33-6% 
24-38-36% 
39+-45% 
16. Do you have: 
High School Education-9% 
Some College-27% _ 
Bachelor's Degree-45 % 
Some Graduate-6% 
Ph.d.-!2% 
17. Are you a home owner? 
Yes-75% 
No-21 % 
NA-3% 
18. How long have you owned this business in the Whittier 
Neighborhood? 
1-5 years-48% 
6-10 years-36% 
11+ years-15% 
Average length of ownership-.6 years 
19. What was your income last federal year from your business? 
negative income-9% 
$0-$6000-15% 
$6001-$12,000-15%. 
$12,001-$18,000-6% 
$18,001-$24,000-12% 
$24, 001-$ 30·,000-9% 
$ 3 0, 001-$ 36,000-3 % 
$36,001-$42,000-6% 
$42,001 ~$ 48,000-3 % 
$48,001 and above-12% 
NA-9% 


Whittier Alliance Home-Based Business Results.

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