MISSISSIPPI STATE -- Economic development is high on the priority list across the South, but some experts believe a contributor to this success is being overlooked.

Home-based businesses annually bring millions of dollars to the rural economies of the South. These are the earliest business form, and offer rural communities the opportunity to develop local assets and keep residents in the community.

These findings were recently released in a Southern Rural Development Center publication titled "Home-based businesses: Implications for the rural economy of the South." The Center, headquartered at Mississippi State University, released the publication written by Pamela Brown at Texas A&M University and Glenn Muske at Oklahoma State University.

"Home-based businesses fit so seamlessly into the community that they simply are not noticed for what they are -- functional and contributing micro businesses," the publication states.

In rural southern communities, the three important factors economic development depends on are individual entrepreneurial spirit, local initiative to embrace change and a quality of life that people desire.

"Home-based businesses embrace all three of these components because they are based on the creative, entrepreneurial energy of individuals," said Brown, Extension consumer sciences specialist with TAMU.

Despite their importance to local rural communities, Brown said home-based businesses are often invisible.

"They tend not to be members of Chambers of Commerce, and they don't have a sign out front announcing their presence," Brown said. "They're busy doing their own thing."

While many home-based businesses thrive under these conditions, the danger is that they will isolate themselves from their community and think too narrowly about their market.

"Fear often keeps a home-based business person from reaching out. They don't know how to handle the bigness or how to garner more capital," Brown said. "When they reach a crossroads, they may choose to pull back because they are uncertain about their capabilities."

The majority of home-based businesses earn less than $25,000 a year. Many provide supplementary income, but conservative estimates are that these businesses generate more than $10 billion of income annually in the South.

Muske, Extension home-based and micro business specialist at OSU, said in 1989, 40 percent of home-based businesses were service-oriented while 60 percent offered a product. By 1996, those percentages had switched.

"We're definitely seeing a service economy," Muske said. "There is more service development than product development among home-based businesses."

While many people start a home-based business to bring in extra dollars, others do it for personal fulfillment.

"The main reason people operate a home-based business is control. 'I have a passion and I want to be in control of my own life.' Running your own home-based business allows control, family time and esteem. It's the American dream of owning your own house and owning your own business," Muske said.

One of the challenges facing rural communities in the 21st century is community economic development. Home-based businesses are an important part of the communities' success and survival.

This publication, "Home-based businesses: Implications for the rural economy of the South" can be viewed online at http://www.ext.msstate.edu/srdc/hot/hot.htm. For copies or more information, contact the Southern Rural Development Center at (662) 325-3207.