One of the mistakes I find service providers make on a regular basis is drawing a bright yellow line between home and business users.

Two caveats to this post. First, in many markets this makes great sense. If you are selling furniture you better segment between home and business users. If you are a general contractor same thing.

Second, with respect to Internet services (access, hosting, mail, domain names, etc.) there is some segmentation necessary for larger "small businesses". Here think about the same type of businesses that used to be serviced by Novell's army of Netware consultants. Businesses with usually 50 < employees < 500. They do have some (but not all) unique needs.

There are three points I want to make here. First, for many small businesses their needs are identical to those of home users. A little hosting, a little mail and access with a domain name to keep it all easy to find and use. Think about a $25-$75/month bundle of services all in.

They both want it to work ALWAYS and both are unwilling to accept less (nor should they). And for every "mission critical" business email or website there is a timely romantic email or little league schedule on a website that MUST be available now. If stuff isn't working people get mad and may find an alternative supplier.

Both groups need help using these services. They are equally clueless and equally in need of your fine counsel.

Second, a huge and growing segment of the population has NO difference between work and home. They work at home. Sometimes they relax during working hours. Sometimes they work during what would normally NOT be working hours. These people, SOHO, need all the services they need all the time. You cannot market to them separately. This segment is also the wave of the future.

The last point I would make here is that having a residential base usually leads to business accounts. Back in the day we  (a long load but a nice trip down memory lane for me) would regularly get to bid on business against the "business-focused" ISPs (at the time usually Netcom Canada and PSI) because we were providing dialup to the President or decision-maker of the business. We usually got the account. These segments feed each other.

The point I am trying to make here is for the vast majority of potential customers there is no need to differentiate between business and residential users and most distinctions ("higher level of service") are artificial anyway.

It is the size of the bundle, not where you use it.