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.

Pros and Cons of Siting a Business in a Historic District Versus a Strip Mall

The trend since the 1950’s has been to site new retail businesses in suburban areas, and not in central core historic downtown districts. The growth over the last half century in America has been to be where the population is and was moving. Downtown’s were and continue to still be dying. Over the last decade or so the historic downtowns have become popular destination stops for the customers to drive, walk or bike to and for suburbanites to shop, dine and relax. Most successful downtowns are not “cookie cutter” in they are not strips with large asphalt parking lots in front with a few trees and shrubs linearly placed to comply with zoning laws. Downtown’s are not only old buildings but collections of memorable events from days gone by, and in many downtowns of days now gone forever. So why would one consider opening a business in a downtown location?

Very well, let us get started. On one side you will find the “Pro”, the positions in favor:

The number one point in support for creating a business in a historic downtown district is if the local government is inclined to save and rehab. the area there often are programs set up to aid in rent, upfits, and marketing support. In many situations the rent is going to be less than what one pays in a newly built strip mall which can be a strong benefit. Many malls are owned by large corporate entities and have a rigid formula for what the rental income must be. The buildings in a downtown are often owned by private parties and/or descendants/children from the original owners and have no fixed costs so they can work with the tenants on rent and set asides.

The secondary positive point is customers like to visit points of interest. Customers like stories of the history, being informed of those who were there and what their individual histories were. They like to know where and how a town developed. The customer can brand not only with the store but with the location, which does not happen in a strip mall..

The third positive point is many downtowns have merchants who band together to help each other and to promote the location as much as they promote their own stores. There can be a collective effort to market the downtown location..

A 4th support point in favor is going to be that most downtowns are pedestrian friendly. People can walk leisurely to the shops and stores, dine outside on the sidewalks, and enjoy shopping at leisure, not elbow to elbow in a crowded mall..

Lastly, the 5th point is many downtowns set themselves apart by having activities going on such as festivals and events. Vendor booths, food stands, bands playing, farmer’s markets all are highlights of having a business in a downtown district. The area is alive and has a personality unlike strip centers..

And alternatively, to help keep this balanced, there’s Con; Against:

The primary point against creating a business in a historic downtown district is most do not have a large amount of drive by traffic such as strip centers on major thoroughfares. If drive by and car access in and out are crucial to the business then best not to be downtown. Downtown is a place where the main street is 100 years old, narrow and often delivery trucks are stopped in the road making the traffic pace much slower..

The second point in contra will be unless there is some provision to allow a slower time frame for the building to come to code then the cost of renovation to comply with codes can be super expensive for the tenant or property owner. Many buildings in historic downtowns have been rehabbed many times over in the course of their existence. Each “fit up” is an adventure with old wires, new floors, cut off pipes being discovered and to go from that point to 100% compliance with building codes designed for new buildings can be a financial nightmare.

A 3rd significant point against is even with high upfit costs there often are restrictive covenants imposed upon the area by local, national and state historic conservation groups. The community feels they have an interest in preservation and set higher standards which usually result in restrictions on what and how a store can be up-fitted..

4th point in contra will be much smaller square footage to work with. Most downtowns do not have existing spaces to handle chain grocers, big boxes, or car dealerships. These type stores bring to them lots of foot traffic but they require large 100,000 sq. ft. buildings and parking for 100’s of cars. Anything that large would destroy the downtown simply by it’s size in most historic downtown districts..

Fifth and finally, last point in contra will be often the historic downtowns have special taxes on the properties that other areas of a town do not. This means the taxes get passed on in rents often. The tax may be used to promote the area but in some situations those same taxes go into a general fund and are not used to enhance the businesses in the special tax districts..

So there we have some of the arguments for each side.

So, in the final analysis is creating a business in a historic downtown district a good thing? or a bad thing?

It depends on your type of business and your overall objectives. Many downtown business owners choose their locations because of the pace of life, quality issues and for many it’s civic pride to be part of a history, to add to the quality of that history and to preserve the good from those who preceded them. Often downtown’s biggest strengths are the character of those who choose to try. It creates an air of excitement that customers can build off of, enjoy and continue to visit over and over, bringing new friends to show off “their town”.

Downtown Sarasota

Downtown Sarasota contains a small, walkable shopping and dining district a few blocks from the Sarasota Bayfront, east of Tamiami Trail. While Sarasota is a city, the sidewalks are not busy like most cities, unless there’s a farmers market or arts festival downtown. So it feels more like a small town during the day. At night, however, downtown Sarasota comes alive with people out and about, enjoying the many live music venues and restaurants.

Here are highlights of the various districts that make up downtown Sarasota.

FIRST STREET

The Sarasota Opera House, Selby Library, and Whole Foods Market Centre create a cultural and shopping spine along First Street. The Opera House, in soft tones of peach and cream, was extensively renovated last year. It sets a classical European tone and is very popular during Season. Ceviche Tapas Bar & Restaurant, First Street Chop House, Bijou Cafe, and Florida Studio Theater (on Palm Ave at First Street) are all situated in old buildings with character, forming a cozy downtown theatre district.

Diagonally across from the Sarasota Opera House is Selby Public Library, designed by Hoyt Architects. It floats like a big white circus tent supported by elephant-leg columns. At least that’s how it looks to this observer. Inside is a very modern, airy, natural-light-filled library with lots of Internet-capable computers, free wi-fi for using your own laptop, a spacious children’s section entered via an exotic-fishtank archway, and large collections of books, CDs, DVDs, periodicals, fiction and non-fiction books.

Whole Foods Market Centre incorporates upscale ground floor retail shops, upper-floor condominium apartments, a parking garage, and a Whole Foods Market with lots of outdoor seating. This is one of the best places in downtown Sarasota to enjoy a bite while you watch the passing scene. There’s a takeout food bar and an indoor cafe, too. Whole Foods Cafe and the Main Street corridor all offer free wi-fi in downtown Sarasota.

MAIN STREET

Stretching from Rte 301 on the east, to the Sarasota Bayfront on the west, Main Street is the spine of downtown Sarasota. The section between Rte 301 and Osprey Avenue is busiest during weekday business hours, as most of its business comes from office workers related to banking, law firms, and the courts, which are all concentrated in that part of downtown. On the corner of Main Street and Rte 301 is the Hollywood 20 Movie Theater complex. There’s a branch of the Sarasota YMCA in the same building.

From Orange Avenue west to Gulfstream Avenue, you’ll find an eclectic selection of international cuisine, from Greek to Spanish, Vietnamese to Thai, Chinese, Italian, American, French, Pan-Asian, and Fusion. There’s a health food store with supplements and a branch Post Office, art galleries, an Apple store with a cafe, bakeries, and clothing stores from women’s fashions to Brooks Brothers.

During Season, Main Street hosts many arts and crafts festivals, a biker rally, and celebrations of major holidays with rides and food vendors.

In the evening, you can bar-hop around Main Street, checking out the live music at numerous venues such as Mattison’s City Grille, Sarasota Vineyard, Pastry Arts, The Box Social, and The Gator Club.

LEMON AVENUE

Every Saturday, from 7AM to 1PM, year-round, Lemon Avenue from First Street to State Street is the epicenter of the Downtown Sarasota Farmers Market, where approximately 50 vendors offer oodles of fresh produce, including lots of organics; flowers and plants; arts and crafts; prepared foods to take home or take out; baked goods; gluten free foods; meats; and cheeses. It’s one of the best people-watching and dog-parading events in town.

The main downtown bus depot for SCAT (Sarasota County Area Transit) is located on the corner of Lemon Avenue and First Street.

STATE STREET

It’s easy to miss State Street, quietly perched one block south of Main Street. State of the Arts Gallery shows work by artists who are all local and self-supporting with their art. Much of the work shown there is large-scale, museum quality. On S. State Street, one block west, European Focus is a colorful shop with lots of intriguing gifts made by artisans in Europe. From “bouncies” — dolls that bounce up and down on springs — to French linens, to Bavarian “smokers”, to ceramics and tours of Europe, this is a unique Sarasota store. Next door to European Focus is Sarasota Candle, a local manufacturer that also has a booth at the Downtown Sarasota Farmers Market.

PALM AVENUE

This is downtown Sarasota’s “Gallery Row”, with everything from handblown glass to elaborate jewelry to paintings, sculpture, and hats. There’s a First Friday Artwalk that takes place along Palm Avenue from 6-9PM, when the galleries stay open late and offer refreshments and live music. Caragiulo’s Restaurant is on Palm Avenue, with indoor and outdoor dining. At the corner of Main Street and Palm Avenue, Epicure is a favorite spot to sit outside and relax with friends over lunch or dinner.

BURNS SQUARE

Burns Square, at the south end of Pineapple Avenue, is part of downtown Sarasota, but it’s separated by a two- block walk alongside non-descript office buildings, so it feels like a separate district. It shares the First Friday Art Walk with downtown. Here the buildings are low and charming with bright stucco colors and a changing array of intriguing shops. Awesome Orchids, Parkland Art Gallery, Malika’s Imports, L-Boutique, Jack Vinales 20th Century Classics, and Citrus Cafe are all worth a look. Behind Pineapple Avenue, Burns Court reveals Sarasota’s art film house, Burns Court Cinema, and Owen’s Fish Camp restaurant. On Saturdays, there’s a small, independent, outdoor artists’ market on Pineapple Avenue in Burns Square.

SARASOTA BAYFRONT

At the far east end of Main Street, Marina Jack restaurant and marina ties downtown Sarasota to Sarasota Bay. The restaurant is surrounded by the scenic Bayfront Park, which includes a walking path, children’s playground, O’Leary’s Tiki Bar & Restaurant, lots of free parking, yacht basin and small beach for launching rowboats. You can sit on a swinging bench and watch the tide go in and out, look across at the stunning John Ringling Bridge, or take in the glorious Gulf sunset.