The Home Entrepreneur Systems Model: A Grounded Theory of Home-Based Business Needs and Practises

The aim of this research was to enhance understanding of home-based business at both an individual level and a societal level. Since the 1980s the working environment in Australia has undergone significant change. Traditional full-time employment has steadily declined while the number of small businesses and self-employed people has steadily increased. Home-based businesses make up an estimated 67% of all small business in Australia and estimates of their numbers continue to rise. They now play a significant role in the Australian economy and have attracted the interest of academics and policy makers alike. While existing empirical research has mapped out many of the general demographics of home-based business operators and of the sector, there are no grounded theories which offer deeper understanding of the home-based business phenomenon. A review of existing home-based business literature identified four areas of concern: a lack of theory underpinning home-based business research; a narrow research focus across studies; sampling difficulties due to the hidden and inaccessible nature of home based businesses; and inconsistent definition and consequent lack of conceptualization of home-based businesses across studies. This research sought to address these concerns. The findings are presented as a theory which is grounded in data which consisted of direct accounts of the experiences of home-based business operators. Qualitative interviews were conducted using storytelling techniques in order to ensure a broad research focus while examining a wide variety of home-based business experiences. Purposive and theoretical sampling was used to enhance the sample diversity and capture data that were as rich and varied as possible. And finally, to explore the conceptualization of home-based business, this research did not limit research participation to those who met an a priori definition, but was open to anyone who self-identified as a home-based business operator. The research question, which was refined as the qualitative study evolved, became: What needs are met through the operation of a home-based business and how do these needs interplay with home-based business practise? Grounded Theory methodology was employed in all stages of this research, so that analysis and theory construction took place throughout sampling, interviewing and transcribing, coding the data, describing the coded data, modelling and writing the findings. Data were gathered through 19 semi-structured interviews with home-based business operators practising in the Cairns area of Far North Queensland. The participants were drawn from a growing pool of home-based business operators (final count 127) who volunteered to be interviewed. The volunteer pool was established through media releases, industry partner contacts, requests made at industry sponsored, home-based business seminars and through snowballing. As volunteers were added to the pool they were contacted and further information regarding their personal and business circumstances was gathered. This information was used to inform purposive and theoretical sampling and also helped demonstrate the diverse nature of home-based businesses. When interviews were conducted they were transcribed and analysed for themes; as themes were identified they were assigned codes and data from existing transcripts was grouped together under the emerging codes. Coded data was continually reviewed to look for new themes and connections between themes to develop theory. A coding system was eventually developed through iterative cycles of description, conceptual ordering, and theorising. Interviews continued until data reached a point of theoretical saturation, where no new data were found which could not be fully authenticated through the emergent theory. The findings of this research are presented in the form of a systems model of needs entitled the Home Entrepreneur Systems Model. This model relates to home-based business operators who seek more than "making money" through the practise of their home-based businesses. The model consists of two features. The first is a dynamic multifaceted home-based business practise which is located at the core of the model. Four unique dimensions of household, business, family and home were identified as essential constructs which all contribute to the experience of home-based business practise. With the dynamic nature of these dimensions, home-based business is better understood as the verb "practise" rather than as a noun. The second feature of the model contains five interconnected lifestyle needs which orbit home-based business practise. These needs were identified as security, autonomy, balance, meaning and community. The last two of these needs do not appear in previous home-based business research. All elements of the model are interrelated and considered to be part of a system which is held together by a focus of home entrepreneurship. The Home Entrepreneur Systems Model presents a holistic view of home-based business and offers a new approach to conceptualising and understanding home-based business. The model contributes to understanding the home-based business phenomenon in several ways. It allows greater conceptualisation of home-based business which has important implications for future HBB research. Recognising a home entrepreneur focus as separate from a traditional business entrepreneur focus has implications for future directions of entrepreneurship theory and its integration with HBB research. The model also offers insights into the diverse range of home-based businesses and how they are often part of mixed income sources. It highlights the need for future research into the growth of home based business as an income supplement rather than the sole livelihood of operators. This research provides a theory which will need to be examined across cultural, gender and class differences within Australia as well as overseas. As the research was conducted in a region where tourism is a dominant part of local industry, the theory should also be examined across regions with varying economic activities and lifestyle concerns to test the transferability of the Home Entrepreneur Systems Model and gain a deeper understanding of home-based business.