The SOHO as an Online Business Model for the Small Business Entrepreneur of the Future

Sometimes to understand the future we have to have some historical perspective.

We often forgot that before the 19th century, and prior to the industrial revolution, nearly all offices were small offices and/or home offices, with very few exceptions. Now that small business and the self-employed represent the backbone of the current economy, it seems that history does indeed repeat itself.

The US economy no longer is dominated by giant corporations. The US Small Business Administration (SBA) reports that fully 99% of all independent enterprises employ fewer than 500 people. This accounts for 52% of the US workforce according to the SBA.

Additionally by the end of 1999, the service sector had grown to 104.3 million jobs, representing 81% of non-farm employment, and the goods-producing sector, which includes manufacturing, construction, and mining represented 25.2 million jobs, or only 19% of non-farm employment.

I do not know how many farm related jobs there are, but I do know that 81% and 19% add up to 100%.

This tells me that since at least the year 2000 probably over 80% of jobs are now service related and less than 20% of us are now employed in manufacturing. That means as a nation we do not really manufacture much any more. Can you say trade deficit?

We no longer have an industrial economy, just like we will never again have an economy based on agriculture.

The advent of the personal computer in the mid 1990s, along with breakthroughs in voice and data communication, created opportunities for businesses to decentralize and allowed for a return to the trend of the small office concept.

Since the end of the 20th century the term “SOHO”, an acronym for “Small Office/Home Office” has come to be used to define this important business niche.

New technologies will continue to create a demand for individuals who work from home or in a virtual office. Many people are now employed as consultants, independent contractors, or organized as small business entities with very specialized services designed for the project outsourcing of larger companies, often not even industry or country specific.

The SOHO or online virtual office is not just for consultants and independent contractors any longer. The members of many other occupational ranks, and especially online business owners now help comprise this diverse sector.

A large array of products and services also are designed specifically for the “SOHO” market. Many books are published specifically targeted to this business model, everything from general business advice to guides on setting up fairly sophisticated computer systems, telecom systems, and Internet and Intranet systems.

The small business entrepreneur generally has demanded and usually has always benefited from high technology, allowing small business to be competitive.

So, if you do not own a farm, chances are that in the future you will be working in the service sector and quite possibly from your home office. This probably holds true in most other developed countries as well, due to an increasingly underemployed labor force and shrinking job markets.

The online virtual office is here to stay and is for anyone that seldom needs an office. If you own a laptop with wireless connectivity you may be lucky enough to work pretty much anywhere, if you have access to the Internet.

But let’s take it one step further for those who would dream of living where they wish, and working online from wherever they are. Work is no longer necessarily site specific.

Is it really just a dream? Not any more.

More and more people are finding that with increasingly more affordable technology, VoIP services, videoconferencing, and reliable worldwide courier services, they at one time or another may find themselves working from a beach, or a mountain top…and in some cases may rarely have to make an appearance at the traditional office again.