Seventy per cent of all new businesses are started at home, research by AXA Business Insurance and the Enterprise Nation business network has found.

The Home Business Insight Report, a survey of nearly 800 home-based businesses, also revealed that two thirds of home businesses are run by women.

Business services (37 per cent) is the most popular sector for home-based firms, followed by crafts (19 per cent) and retail (10 per cent). Of those surveyed, 79 per cent expect increased turnover in 2014.

Other findings:

  • Growth:
    • 53 per cent of those expecting growth this year will increase the efficiency of existinresources to cope with more work
    • 35 will outsource contracts to freelancers
    • 12 per cent will take on full or part-time employees as a result.
  • Technology:
    • two thirds said that modern technology has been a critical factor in enabling them to run their business from home
    • One in 10 businesses based at home previously had business premises.
  • Finance:
    • more than a third of those setting up business from home didn't need funding to get started
    • those that did were most likely to have funded their businesses through personal savings
    • 20 per cent have part-time jobs in the early stages to avoid the need to seek finance
    • 32 per cent are concerned about finding the additional finance to fund this year's potential growth.

Emma Jones, founder of Enterprise Nation, said:

"Home businesses are playing an increasingly important role in the British economy. The 4.5 million micro and small UK businesses contribute £1.6bn to the British economy - 75 per cent of these are registered as having 'no employees'.

"It's interesting to see these people are not reliant on banks at all. Low start-up costs at home negate the need to take on board complicated routes to finance for these entrepreneurs."