A recently released report uses 2002 federal income tax data for sole proprietorships to analyze the impact of location on net income.
In 2002, home-based businesses earned 35% of the receipts earned by non-home–based businesses and had a net income of 59% of non-home–based businesses. However, home-based companies earned a higher return on gross revenues — 36% versus the 21% earned by non-home–based businesses.
The sample included 1.6 million profitable non-farm sole proprietorships that took a home office deduction and 1.9 million that deducted rent for other business property. The report was developed under a contract with the Small Business Administration Office of Advocacy. For more details, go to www.sba.gov/advo.