Cottage Industries

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Cottage industries is a term that was prevalent during the eighteenth and nineteenth centuries to describe the home-based system of manufacturing. This term is also used today to refer to goods or services that are produced at home. Sewing, craft production, sales and marketing, typing, bookkeeping, and auto repair are just a few examples of home-based employment.


Rural families were some of the first to become involved in the cottage industry. They added to their agricultural income by making products at home. Merchants provided the raw materials to the families, collected and marketed the finished product, and then paid the family a percentage of the price charged to the end consumer. Some of the items made by these at-home workers were cloth and clothing, shoes, cigars, and hand-decorated items.

Cottage industries developed in cities around 1870, resulting in the harsh tenement housing system. Immigrant families lived and worked in these crowded, unsafe apartment buildings. They worked for extremely low wages, usually making garments. This system lasted until around 1920, when better management of factories made home-produced goods less competitive.

Hand-decorating of items, sewing, and other highly specialized activities still operate as cottage industries today. Economists point to the rise of a new type of cottage industry whereby people can stay at home to perform work on their computers that formerly had to be done at the office. Telecommuters is another term used more frequently today to refer to home-based employment. Many jobs that used to require workers' physical presence in the office can now be performed from home. Running a business from home today requires only a couple of phone lines with call forwarding and call waiting, a computer with e-mail and a modem, a fax machine, a copier, and office supplies. For executives on the go, a cell phone and laptop computer can keep them up and running from just about any location.


There are many reasons that people choose to work from their homes. They can be experienced or inexperienced, young or elderly, healthy or physically challenged, single or married, with or without children.

Many mothers and/or fathers of young children find it more productive, more cost-effective, and safer to keep their children with them while they work at home. They can have the flexibility of arranging their job around their family's needs. Many parents enjoy being able to spend time with their children during the day. Parents maintain responsibility for the safety of their own children and can keep abreast of how much they are learning, know who they are playing with, and save money on day-care expenses at the same time.

Another reason people choose to work from home is that they do not have to commute to and from their workplace. By not commuting to work, they can save on wear and tear of their vehicle, get lower insurance rates, and spend less money on gas.

Working from home also saves money that would normally be spent on a workplace wardrobe. Much more informal clothing can be worn when working at home. Not spending money on uniforms, suits, and/or dresses provides more money for other expenses.

Home employment gives control of one's life to oneself. There is freedom and flexibility in setting work schedules. Parents can be home for their children, there are no commuting hassles, and no one looks over shoulders or determines break time. The individual, not the employer, determines the work schedule. A parent has the flexibility of scheduling work flow around school activities such as field trips and sports activities.


Despite all of the benefits, home employment is not for everyone. For example, those who start their own business must be able to generate work. There are advertising costs involved in getting the company name out to the general public. Careful consideration should be given to the possible advertising avenues to use. Advertising can be very expensive and may not generate enough business if it does not reach potential customers. People who do good work but cannot get others to recognize this or cannot do well in promoting themselves may be spending more than they are earning.

Detailed record keeping is a must for the self-employed as well as the work-at-home person. Some deductions are available only if the business is making a profit, while others are used yearly to determine expenses. Depending on the type of business a person wishes to become involved in, start-up costs need to be considered and information gathered on the best equipment/tools necessary. Some businesses may require a starting inventory, while others do not. When considering start-up costs, one should shop wisely and consider purchasing used equipment and supplies. This will save money for other expenses, and the depreciation on these items will be more reasonable. Advertising, mileage expenses, cost of supplies, phone, electricity, and entertainment are just some of the expenses for which records must be maintained. Tax laws can and do change frequently. The person who is unsure about what records need to be kept should contact a tax adviser for detailed and up-to-date information.

Another factor to consider before deciding to work from home is motivation. One must be able to set one's own schedule and follow through on it. If a person is used to working for someone else and having supervision and direction provided, it can be very easy to let work slide. Setting goals and following through on them is a necessity when working for oneself.

Finally, one should check local authorities before starting a home-based business as towns vary greatly in their local ordinances. They will explain any rules the town has established regarding home-based businesses and give guidance in the necessary paperwork or approval process.


For those people who wish to become self-employed and work out of their home, there are several organizations available to help get started.

One major resource for the self-employed is an association called SCORE (Service Corps of Retired Executives). SCORE is a nonprofit group sponsored by the U.S. Small Business Administration that has provided successful, free business counseling since 1964. SCORE matches volunteer counselors with clients needing their expert advice. It also maintains a national skills roster to help identify the best counselor for a particular client. SCORE is made up of more than 13,000 retired or active executives and has more than 400 chapters nationwide. These executives volunteer their time, skills, and experience to help the self-employed get started in their own business or help those who are already in business when they have problems or need advice. SCORE also offers many seminars and workshops and posts this information at its local chapters. Since its inception, SCORE has advised, counseled, and mentored more than 300,000 small businesses, helping nearly 4 million Americans with face-to-face counseling, e-mail counseling, and training. For more information on SCORE, contact a local chapter personally or visit its Web site at

Home Employment Resource is an organization dedicated to helping people who want to work at home. It provides information on companies nationwide that hire people to work from home. A partial listing of jobs that have been available to the home-employed include typists, graphic artists, auto appraisers, editors, reporters, financial analysts, cartoonists, claims processors, photographers, proofreaders, recruiters, and writers. There are many jobs available for home-based workers if one knows where to look. This organization assists in contacting the companies that hire work-at-home people. The Web site for Home Employment Resource is

The Independent Homeworkers Alliance (IHA) is an organization dedicated to helping people who want to work from home. The IHA offers its members valuable benefits that are designed specifically for the work-at-home person. Included in its database are more than 43,000 job listings. Membership and maintenance fees that are charged to members are applied directly to the organization itself to improve, enhance, and add to the existing services provided to its members, who number more than 27,000. More information about Independent Homeworkers Alliance is available through their Web site at

There are also home study schools that offer training in fields such as medical billing and claims processing, medical transcription, bookkeeping, and paralegal work. For more information on home-study schooling, contact At-Home Profession America's First Home Study School for Work-at-Home Careers, 2001 Lowe Street, Fort Collins, CO 80525.


"Home Employment Resource". Retrieved October 15, 2005, from

"IHA". Independent Homeworkers Alliance. Retrieved October 15, 2005, from

"SCORE 'Counselors to America's Small Business" Retrieved October 15, 2005, from

The World Book Encyclopedia (2005). Chicago: World Book, Inc.

Julie A. Watkins