Technology Key to SOHO Popularity
The rise of the SOHO--small office/home office--has mirrored advances in computer technology, and that is no accident. The availability of powerful, affordable desktop PCs, inexpensive software and an array of low-cost peripherals has made it possible for most of today’s SOHO entrepreneurs to compete with corporate America.
“Without the technology that’s available today, most SOHOs couldn’t be efficient enough to survive,” said Roger Parker, a small-business expert who started his first SOHO business 20 years ago. Improvements in technology, he said, have made it possible for more kinds of businesses to succeed as SOHOs.
The numbers tell the story. Interest in both home computers and home offices has exploded since the mid-1980s. The growth in home offices has outpaced that for PCs, but the accessibility of the computers has definitely fueled the trend.
According to figures from the New York market research firm IDC/Link and the Electronic Industry Assn., the percentage of U.S. households with a personal computer grew about 120% between 1986 and 1992, while the number of Americans with home offices shot up 190% in the same period. From 1992 to 1995, the percentage of homes with PCs grew 15%, and the number of home offices grew 20%.
Another study by IDC/Link found that 58.8% of all small offices are equipped with a personal computer, while only about one in five people without a home office has a computer at home. In the last 12 months, the SOHO market has spent $4.6 billion on high-tech purchases, including computers and related equipment.
Those looking for a career change can equip themselves to work from home for as little as $3,000: That will buy a personal computer, an inkjet printer, a fax machine and some software. An extra phone line and a connection to the Internet global computer network wouldn’t hurt, either.
Popular SOHO occupations include financial consulting, marketing and advertising, graphic arts, public relations, real estate and writing. Many of these careers are more high-tech than the average corporate job.
“SOHO workers tend to be technically savvy out of necessity, because they are the ones that are using technology so that they can compete on a level playing field with larger businesses,” said Jennifer Doctor, executive director of the group SOHO America.
They are also more apt to upgrade their equipment sooner and have become an important market segment for purveyors of hardware and software alike. In fact, the very term “SOHO” was invented by industry marketing executives.
In addition, small-office owners have more freedom than their corporate counterparts to experiment with the latest technology. They are consequently more likely to purchase what they need, unlike corporate employees who must wait for a decision by committee before going out to buy the latest software.
“Small-office owners are much more likely to buy portable PCs. They define work by their own terms,” said George Ehinger, publisher of Small Business Computing. “In a corporation, the one with the laptop might be breaking the rules. But in a small business, they are the ones making the rules.”
The rise of the World Wide Web--the graphics-rich portion of the Internet--could provide a second big boost, because companies large and small can compete on nearly equal terms in cyberspace.
“The emergence of the Internet as a communications and commerce tool has been a tremendous boost for this market,” Doctor said. “The Internet is the greatest leveler in business because no one knows just how large you are.’
Karen Kaplan covers technology and careers for The Times and Jennifer Oldham is a Times researcher. They can be reached at karen.kaplan@latimes.com and jennifer.oldham@latimes.com
