The number of home business activities that were registered with the Ministry of Commerce and Industry until the end of June 2020 reached 7706 activities. The Secretary of the Commercial Register at the Ministry of Commerce and Industry confirmed, "The Ministry encourages the owners of home business, small, medium and large enterprises to promote their products and use modern methods and technologies in marketing to them inside and outside the Sultanate, with a commitment to be within the framework of home business licenses" [1]. The number of commercial registrations done in the Ministry of Commerce, Industry and Investment Promotion reached 1,860 during the second quarter of the year 2020. The statistics department of the ministry said that of these registrations, there were 972 for an individual business, 296 for limited liability companies, 216 for individually owned companies, 101 for investment companies and 99 for household businesses, 96 for non-profit organization companies, 44 for joint liability companies, 23 for street vendors, 12 for limited companies and one for a branch of an international company [2]. Ministry of Social Development (MoSD) targets 1,000 such families to train them in marketing and modern selling skills. The initiative will last three years in all governorates of the Sultanate. This year, it will target ten governorates. It will conduct around 11 workshops targeting about 330 people every year. Specialists will explain modern marketing methods, service development, product packaging and marketing via social media. They are seeking cooperation from colleges and universities, the Ministry of Health and Oman Chamber of Commerce and Industry [3]. Home business owners can obtain a home business license electronically via self-service RO for three years. It is worth noting that the number of home business licenses amounted to 7,795 licenses as of April 30, 2020 [4]. The Authority for Small and Medium Enterprises Development (Riyada) has issued a detailed statement on incentives offered to owners of Small and Medium Enterprises (SMEs) with a view to writing off SME license fees. The incentives target SMEs operating in the sectors of manufacturing industries, agriculture and fisheries, services, logistics and related activities, according to the Ministry of Commerce and Industry and Investment Promotion. The incentives are a one-activity, one-time offer to Riyada card holders. It is a condition (for exemption from government license fees for the target activities) that the licenses be issued for the first time. It is not allowed to sell, transfer or modify the commercial register of the beneficiary SME for a period of three years, except in the case of transfer of the commercial register to a full-time citizen who is a holder of the Riyada card or in the case of cancellation of the establishment by the cancellation of its commercial register. According to this statement, the beneficiaries are exempt from payment of all government license fees. Holders of Riyada cards are also exempt from payment of labour license fees for new activities specified in the sectors covered by the incentives, towards a total of 5 workers and for a single activity. The exemption does not cover payment of fees for renewal of existing government licenses across all sectors [5].

Home Based Business

Home Based Business (HBB) is a small business that operates from the business owner's home office [6]. Home businesses are having a very small number of employees, usually all immediate family of the business owner, in which case it is also a family business. Home businesses generally lack shop frontage, customer parking and street advertising signs Helmrich [7]. The use of the home as a business pace can provide a considerable advantage in establishing a business. For instance, it can reduce initial capital requirement, but arguably forming a home based business rely heavily upon clients accepting the home as the space in which business will take place and more broadly, accepting home based business as serious business entities Evangelista and Savona [8]. Home-based businesses can be any business, either product or service, production and/or sales [9]. According to Clark and Douglas [10], In spite of being ‘microscopic’ in size, HBB were operating with sales across the full spectrum of geographic regions from local, to regional, national and international. HBB is defined as “any business or self-employed person that uses a residential property as a base from which they run their operation-consciously doing so instead of running a separate workspace/shop/office” [11].

Home Business in Oman

Home business is a new tributary to the national economy, as they reduce unemployment rates and job opportunities, which have recently increased with the outbreak of the new Coronavirus, which has led to many losing their jobs and jobs, due to the months-long closure in most countries of the world. The Sultanate of Oman is witnessing widespread activity in the emergence of a large number of home businesses, which benefit from the remarkable development in advertising and electronic marketing methods spread on the Internet and social media. Home business began to receive government support through long-term loans, with the aim of continuing on the ground and developing them, to become registered and legal companies with greater income for the Omani family. Although the idea of home business is old in Oman, it has started to gain greater popularity during the past few years, as it requires much less capital than the common commercial project and work on it starts from the house with tools available or easily obtainable. The number of home businesses increased by 6.16% in 2019 and reached 1687 businesses registered with the Omani Ministry of Trade and Industry, which confirms the interest of Omanis and residents in them. With the outbreak of the new Coronavirus and the imposition of curfews during the first six months of 2020, the Omani government recorded 7,706 new home activities, a very large increase compared with the past few years combined, as many people took advantage of staying at home to revive their skills and started small projects. They promote it on the Internet and social media, with delivery service and at competitive prices [12].

Statement of the Problem

There are many home based business owners who register with Sanad Office. But at the same time there are many home business units running without registering with Sanad Office. The researchers through their direct observation could identify that there are unregistered home business owners in Nizwa. The study is aimed to identify the factors affecting the registered and unregistered home business owners in Nizwa. The study will focus on the importance of urging home business owners to open commercial registers through which they can preserve their rights and expand on the local and global market in the future and the benefits for both parties. Educating home entrepreneurs on the fundamentals of marketing and its importance to enter the market, so that they can remain in the market among many competitors and their role in improving the efficiency of Oman economy and encouraging local participation and international competitiveness.

Objectives of the Study

• To identify the major factors that affect home business owners

• To compare the factors that influence the registered and unregistered business units.

• To analyze the reasons for the reluctance of unregistered home business owners to register with Sanad Office

• To identify the sources to educate home entrepreneurs about the importance of marketing and thereby to support Riyada

Literature Review

Zainab [13] identified factors influencing home- based business performance like owner’s gender, sources of finance, information and communication technology, age of business, managerial know-how, customer and innovation plays a significant role in the performance of small business in which home based is one. Home-based business has great potential of becoming large businesses if properly managed and will contribute towards economic development. Most businesses actually start off as small enterprises and often from a modest home-base, so the decision to grow and potentially move from a home-base has personal implications for the owner-operator in relation to aspects such as additional risk, both of a financial and emotional nature. Home-based businesses are a large component of the business sector in Australia and they are the biggest single sector, accounting for 58% of all businesses [14]. Women make up 33% of small business operators in Australia [14] and they do tend to operate at the small end of the small business spectrum. Non-financial measures of success used by business owners, such as autonomy, job satisfaction or the ability to balance work and family responsibilities [15-18] are subjective and personally defined and are more difficult to quantify. Assibey et al. [19], sought to find out the nature of finance on micro, small enterprises in Ghana, like a loan, grant, or self -raised finance mattered for their productivity edge and growth, suggest that where the nature of enterprise’s start-up capital was loaned or debt finance, compared to grant finance, the enterprise is associated with a higher productivity edge. Kallerberg and Leicht [20] examined that women were no more likely to fail in business and were just as successful as men, suggesting that the process underlining small business is similar irrespective of the gender. The procedures involve in operating a small business is almost the same and can manage effectively by both genders depending on their enthusiasm to move the business forward. Fairlie and Robb [21], suggested that female-owned businesses are less successful than male-owned businesses because they use less start-up capital, have less prior work experience in a similar business and less prior work experience in a family business. Daskalakis et al. [22] while identifying financing practices and preferences for micro and small firms in the United Kingdom, outline the major sources of funding business that is equity financing, debt financing and grant financing and further suggest that regarding equity financing, firms depend heavily on their own funds and would not raise new equity from sources outside. Astebro and Bernhardt, [23], opined that a bank loan is likely to improve the survival chances of a new small business for many reasons. Start-up company survival based on owner human capital, loan sources and wealth as well as industry and company characteristics showed indeed that having a bank loan is a significant positive predictor of the survival of start-up companies. Therefore, the source of funding business is a major determinant of business performance. Small business that depend on bank loan tend to have high performance that those with grant from government agencies and other donor agencies. 

Research Gaps

The researcher has identified that previous studies focused only on specific factors that affects home based business units. There are many studies on small and medium enterprises. All the studies overlooked the Home based business units. The factors and challenges of home business owners in Oman is not addressed in previous studies. This study focuses on the factors that affect home based business and also the registered and non-registered units are addressed in this study.

It is a descriptive study as it covers the factors affecting home business owners registered and non-registered. The study area selected for this research is Nizwa. The period of study is from February 2021 to April 2021. According to National Center for Statistics and Information (NCSI), the total number of small scale units registered in Ad Dhakliyah is 600 from January 2020 to November 2020. This is taken as the sampling frame. The sample size is determined as 234 units. These samples are collected from registered and unregistered home business owners from Nizwa. The sampling method adopted is simple random sampling method, where in the home owners are contacted on a random basis. Data is collected from primary and secondary sources. Primary data is collected with the help of a structured questionnaire shared online using Google form in both English and Arabic. Pilot study is conducted among 15 respondents to identify the validity of the questions. Coefficient of variation is used to find the most consistent and reliability of variables. Hypothesis is tested by using Chi-square test. 

Analysis of the Study

The analysis of the home based business owners in Nizwa is analysed in detail in this chapter. The sample size determined is 234 and the data is collected from 129 responses. Thus the response rate is 55%. 

From the Table 1 it is identified that 66% are females and 34% are males. The reason for more number of females entering into homebased business is due to lack of employment opportunities for women. Also most of the women feel free to work from home. It is clear that 60% of the home business owners are in the age category of 20 years – <30 years and. About 26% of them are in the age group between 30 to 40 years. About 8% of the homebased business owners are less than 20 years. This shows that there is a drive among the young female population to enter into homebased business and be independent. This is also a good sign of being independent and earning by themselves for their livelihood. The marital status revealed that 36% of the home business owners are single and 64% of them are married. This also shows the growing demand of housewives entering into homebased business units as they can be independent and can manage the business from home itself. About 41% of the home business owners have family members of 6 and more. About 25% of the owners are having a family of 5-6 members. It is observed that the number of large families are the owners of home business units in contrast to the number of small families. The educational status of the home business owners is analysed and is found that 36% of them are educated up to high school level. About 27% of them are diploma holders and 10% are Bachelor holders. This shows that home business owners who started their own business are educated.

Table 1: Demographic Profile of Respondents 

In the Table 2, it is revealed that 40% of the home business owners are engaged in food preparation. About 12% of them are engaged in handmade products. About 19% of the home business owners are involved in design and event management. Thus this analysis showed that there is a good demand for Omani food items in the study area. 

Table 2: Type of Homebased Business 

From the Table 3, it is clear that 41% of the home business owners started within 3 years. About 34% of the home business started within the last one year and this can be attributed to the Corona pandemic that affect global economies. This shows there is a tremendous growth in the home based sector during the last 3 years. This also shows the involvement of young females entering into homebased business units for managing their business and being independent. Only 12% of the business owners are in this business for more than 5 years.

Table 3: Period of doing Homebased Business 

The attributes that influence the homebased business units are analysed through Table 4 with the help of coefficient of variation. Those variables with less coefficient of variation are the most reliable and consistent variable. The most consistent factor that influenced to start the homebased business is that they could manage the business effectively by themselves (24.24) followed by the liking and interest in that business (28.40). Another important factor to start the business is that they feel the risk is low (28.53). It is also analysed that Cost (49.30) and Location (44.01 are not important factors for starting the homebased business units by the people in Nizwa. These two are the least consistent variables to start homebased business.

Table 4: Reasons for Choosing Homebased Business

The support and assistance given by the family members are shown in Table 5. It is revealed that 82% of the home business units are supported by their family members. This is one of the reasons for the success for home buisness during the last 3 years. Home business owners are educated and they are supported by their family members to manage and control the business. Only 1% of the home business owners employed labourers. This also shows that they are able and capable of managing home business by themselves.

Table 5: Assistance in Business

Table 6 show that the time spent for business in a week by the homebased business owners. It is identified that 43% of home business owners spend less than 5 hours/week. About 25% of then spend between 5 hours to 10 hours in a week for home business. About 12% of the home business owners spend more than 25 hours per week. This shows that home business owners in Nizwa are not pressurized due to home business.

Table 6: Time Spent in a Week for Homebased Business 

The researchers analysed the number of home business units registered with Sanad Office. From Table 7 it is clear that 87% of the home business units have not registered with Sanad Office. Only 13% of the home based business units are registered with Sanad Office.

Table 7: Registered with Sanad Office

Table 8 show that the reasons for not registering with Sanad Office by the 112 non-registered home business units in Nizwa. About 35% of the nonregistered business owners mentioned that they are aware of Sanad but they don’t want to register with them. About 20% of the nonregistered home business owners heard about Sanad but they don’t know what to do to get a license. At the same time 20% of the nonregistered owners stated that they feel registration with Sanad is of no use. It is important to note that 25% of the nonregistered home business owners are not aware of Sanad.

Table 8: Reasons for not Registering with Sanad Office

Table 9 explains how the home business owners are getting the orders. About 81% of the non-registered units and 41% of the registered home business units are getting the orders though mobile application. About 30% of the customers directly meet the registered home business owners and place orders. Only 6% of the customers of nonregistered business unit place orders directly. About 23% of the orders for registered units are through phone calls and 13% of non-registered units get orders from phone calls. Chi-Square is tested and the chi-square statistic is 12.047 which is greater than the table value at 5% level of significance. The p-value is 0.002 and the result is significant as p is less than 0.05. Therefore, it is concluded that there is a significant relationship between getting orders and registered and nonregistered home based business units.

Table 9: Getting Orders from Customers

Table 10 analyses the exchange of the products and services carried out to the customers. About 47% of the registered units and 63% of the non-registered owners stated that customers will buy directly from their home itself. The delivery of goods to the customers range between 23 to 28%. It is identified that 30% of the registered home owners sell their products indirectly though other shops. Only 9% of the non-registered units sell indirectly through shops. Chi-Square is tested and the chi-square statistic is 6.04 which is greater than the table value at 5% level of significance. The p-value is 0.048 and the result is significant as p is less than 0.05. 

Table 10: Selling the Homebased Products

Therefore, it is concluded that there is a significant relationship between selling the products and registered and nonregistered home based business units.

Table 11 shows that the ways of communicating to the customers by the home business owners in Nizwa. Owners of Registered home business units prefer to promote to their customers about their products through Instagram (47%). At the same time owners of non-registered business units prefer to communicate with their customers through WhatsApp (42%). From this analysis it is clear that WhatsApp and Instagram are the popular communication tools for promoting the homebased business products. Chi-Square is tested and the chi-square statistic is 2.91 which is less than the table value at 5% level of significance. The p-value is 0.40 and the result is not significant as p is greater than 0.05. Therefore, it is concluded that there is no significant relationship between communication and homebased business units.

Table 11: Communicating to the Customers

Table 12 shows the major problems or challenges faced by homebased business units. Both owners in registered units (41%) and non-registered units (45%) face a challenge in proper promotion. This means they need good support in communicating to consumers. 35% of the registered home business units and 30% of the non-registered business units face a challenge in financial needs. Similarly, registered units (18%) and non-registered units (13%) need selling support. Thus homebased business units in Nizwa require support in communication, financial needs and selling support.

Table 12: Major Problems or Challenges faced by Homebased Business Units

Table 13 shows that the main requirements/support needed by the home business units from the authorized agencies or bodies.

About 29% of the registered home business units require support for a low rent place and for product selling. About 30% of the non-registered units require support for product selling. About 23% of the non-registered units need support for distribution. About 18% of the home business units require support to enhance their skills. They need more training to perform the business. About 24% of the registered home business and 15% of the non-registered business units need concessional funding. These issues are to be addressed by the governmental bodies or agencies in order to support these micro units. Chi-Square is tested and the chi-square statistic is 5.86 which is less than the table value at 5% level of significance. The p-value is 0.20 and the result is not significant as p is greater than 0.05. Therefore, it is concluded that there is no significant relationship between requirements and support needed between the registered and nonregistered business units.

Table 13: Main Requirements/Support Needed

Table 14 shows that the training needs required for homebased business units. Both the registered units (53%) and non-registered units (58%) owners require training support on how best to sell their products. This supports the findings in the previous table. At the same time 29% of the registered home business units and 25% of the non-registered business units need more training on creating awareness in the market. This is also supporting the results through table. Thus from this analysis, it is evident that home business owners need training support for selling their products and creating awareness in the market. Chi-Square is tested and the chi-square statistic is 0.58 which is less than the table value at 5% level of significance. The p-value is 0.90 and the result is not significant as p is greater than 0.05. Therefore, it is concluded that there is no significant relationship between training and homebased business units.

The willingness of the home business owners to register with government agencies and bodies is analysed. About 77% of the home business owners are willing to register as they expect support for government bodies. About 23% of the owners do not want to register as they do not want any support from these agencies or bodies. It is also revealed that 64% of the business owners are aware of these agencies and 36% of home business owners are not aware of Chamber of commerce, Riyadha, Sanad Office, Al Rafd related to micro unit business. 

It is identified that 92% (10 out of 129) of the home based business units in Nizwa have not received any services from these bodies. This is a striking result to be noted that 92% did not receive any support or service. Only 8% of the business owners received service from these bodies. 

There are 10 business owners who received services from the government bodies or agencies. It is identified that 30% (3 out of 10) received funding service and 20% (2 out of 10) received training service and 50% (5 out of 10) of business owners participated in exhibitions. But it is alarming to note that only 10 out of 129 home based business units received this service.

Table 14: Training Needs Required for Homebased Business Units

The most important factor that influenced to start the homebased business is that they could manage the business effectively by themselves followed by the liking and interest in that business. Another important factor to start the business is that they feel the risk is low.

About 81% of the non-registered units and 41% of the registered home business units are getting the orders though mobile application. About 30% of the customers directly meet the registered home business owners and place orders. Only 6% of the customers of nonregistered business unit place orders directly.

About 0.47% of the registered units and 63% of the non-registered owners stated that customers will buy directly from their home itself.

Owners of Registered home business units prefer to promote to their customers about their products through Instagram (47%). At the same time owners of non-registered business units prefer to communicate with their customers through WhatsApp (42%).

Both owners in registered units (41%) and non-registered units (45%) face a challenge in proper promotion. This means they need good support in communicating to consumers. 35% of the registered home business units and 30% of the non-registered business units face a challenge in financial needs.

About 29% of the registered home business units require support for a low rent place and for product selling. 30% of the non-registered units require support for product selling. About 23% of the non-registered units need support for distribution. Both the registered units (53%) and non-registered units (58%) owners require training support on how best to sell their products.

Out of the 129 home business owners, there are 112 (87%) non-registered home business units in Nizwa. About 35% of the nonregistered home business owners mentioned that they are aware of Sanad but they don’t want to register with them. About 20% of the nonregistered home business owners heard about Sanad but they don’t know what to do to get a license. At the same time 20% of the owners stated that they feel registration with Sanad is of no use. It is important to note that 25% of the home business owners are not aware of Sanad. 

It is found that females have the highest percentage of owning a home business, with 66 and 34% males. The reason for the increase in the number of females in business from home is the lack of job opportunities for women, so they resort to using their skills to create a source of income. Also, most women feel free to work from home. About 60% of home business owners are in the 20-year-old age group-under 30 and 26% of them are between 30 and 40 years old. The reason for this is that young people seek to depend on themselves to earn a source of income for them during their university studies until they get a job in their field. 

Food preparation projects lead by 40% and this indicates the great demand for Omani food, as well as the ease of this type of business as it does not need large financing.

This study on registered and nonregistered home business units in Nizwa analysed the factors, challenges and support needed to promote and develop these micro units. The study results and recommendations can be discussed and its presented to all government bodies so that they can take sufficient steps to promote small enterprises in the Sultanate of Oman, such as the Oman Chamber of Commerce and Industry, the Ministry of Commerce and Riyada. These results will be beneficial to both government bodies and the home based business units to understand the nature of home-based business more and this will help the owners of home business to develop in the future, which will become for them a prominent role in advancing the economic development in the country. More studies are to be conducted in the area of home business units in Sultanate of Oman so that government can promote and support this sector.

The home business owners can be given a training on marketing especially how to deal with customers and promote their products before starting a commercial activity. This training can be provided by marketing specialization students from Universities:

• The government agencies like Chamber of commerce, Riyadha and Al Rafd should be more responsible in supporting these home business owners to develop them

• A training program can be organized by the Ministry of Commerce to cooperate with the Sanad office in order to educate home business owners about the importance of registering with the Sanad office

• Through this study it is evident that food preparation projects are the major home business units. Therefore, it is recommended that government should cooperate with the owners of home projects. For example, government hotels cooperate with the best home projects in purchasing food from them to present to their hotel guests. A collaborative effort will promote the home business units

• Young Omani women people should be motivated to take advantage of business opportunities in home businesses as there is a tremendous growth in this business for the last 3 years. Therefore, government bodies should integrate with the Universities and facilitate exhibitions and fairs for these units

• The governmental bodies should arrange proper financial support for home business units either directly or integrating with commercial banks in Oman

• The concerned authorities should organize intensive workshops for the owners of home business on preparing a financial plan that helps them control their expenses and how to manage them and use them in the best way as they do not have to withdraw large loans to finance their business. They should also create pages on social media to educate them about the basics of marketing so that they can promote their products without the need for celebrities to resort to social media

• One of the main requirements for home business owners is to increase their sales and marketing of their products. Therefore, exhibitions can be set up for them on a regular basis in cooperation with the malls. This would help them by promoting and selling their products. It is also possible to set up incubators for them by helping them get low-rent shelves to display their products on them to customers. This should be organized by the government bodies

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