Almost three quarters planned to win new customers over the next six months, two thirds were looking to increase turnover and more than half intended to develop new products and services.
The greatest concentration of home businesses is in London, the East of England and the South East. London also leads the way with the greatest number of home business start-ups during the last year, followed by Leicester, Nottingham, Bristol and Coventry.
Although the findings painted a positive picture of the home business market, the authors said the government needs to do more to support and promoting entrepreneurs who run a company from a residential address.
In particular, the report called on ministers to instruct Regional Development Agencies to include home businesses in their economic strategies, change the planning system, encourage local authorities to invest in home business hubs and networking facilities and to give out clear information about planning permission and business rates.
Emma Jones, founder of Enterprise Nation, itself a home-based business, said: "More home business means more dynamism in the economy, less traffic on the roads and tighter social cohesion as parents stay home to run a business and the household."