Definition of Small Office/Home Office (SOHO)

Small Office/Home Office (SOHO) refers to small businesses that are often run out of homes, or even virtually. They typically have fewer than 10 employees.

Understanding the Small Office/Home Office (SOHO)

A Small Office/Home Office (SOHO) is considered a microenterprise, and their owners are often self-employed or working remotely. Workers began to telecommute in the 1980s, after the invention of the personal computer. Thanks to cloud computing, the opportunity for office workers to work from home took off after the invention of the internet and has come of age.

In the knowledge economy, an increasing number of businesses are operating out of virtual offices. They might have no physical premises at all or employ coworking arrangements, where self-employed people share office space and services like phone answering, meeting rooms and video conferencing.

SOHOs are usually white-collar professionals, such as entrepreneurs, lawyers, consultants, accountants, bookkeepers and financial advisors, who might not need a formal office to meet clients — or who have a dedicated formal office within their home.

Working from home has become increasingly popular, for both employees and employers. Employers are taking advantage of a much bigger pool of potential workers, as we outline in our Ultimate Working From Home Guide.

In the U.S., in 2018, about half of firms are home-based and about a quarter of the workforce regularly teleworks — especially in the information technology, construction, professional, scientific and technical services sectors. This is a huge market for home office equipment and information technology.