Should You Run A Small Business From Home?

Starting a home based business can be a financial lifeline when starting out. With your longest commute being 30 seconds and your overheads significantly reduced by getting rid of rent it’s a very appealing option. However, not all small businesses are suitable to be run from home and you may be more successful basing your startup in a workshop or unit. Carefully consider the pros and cons before setting up a business behind your front door…

Advantages Of Running A Business From Home

• Flexibility

Being your own boss at home means you can fit running a business around your lifestyle and family. If 9-5 isn’t your style or you want to use your break to run errands, operating from home allows you to manage work without the constrictions of office hours.

• Low-cost

The financial risk is minimised extensively when you’re not forking out for workspace rent each month. In the beginning when cash is tight, saving money by working from home can make or break the business. You won’t even have to pay business rates unless the room is used exclusively for non-domestic purposes. You also won’t have to worry about planning permission unless, according to the Gov website, your business falls into the following categories:

1. Your home is no longer used mainly as a private residence
2. There is a marked rise in traffic and people calling
3. Your business involves activities that are unusual in a residential area
4. You disturb the neighbourhood at unreasonable hours or create other nuisances such as noise or smells.

It doesn’t even cost too much to upgrade from a domestic insurance to a business insurance policy. Since it is vital to be covered by business insurance even whilst at home, this is reassuring to new startups.

(Remember, saving money is all well at the beginning is a good idea, but if you need extra space for your business to grow and thrive then it’s worth investing.)

• Change Of Environment

With Wi-Fi spots in many public places, if you start getting cabin fever you can always take your work out with you for a refreshing setting change. Jessica Williams set up her bakery business from home, and stresses ‘that change of scenery is absolutely vital, and you will be amazed at the effect it will have on your mindset and productivity.’ Taking your laptop to the local coffee shop or library for a quieter atmosphere will help massively if you get restless in the living room!

• No Commute

The time you save on a busy commute can be better spent put into your work or relaxing to destress before you sit down and start. Saving money on petrol and travel passes can’t hurt either!

So, what type of business can be based from home?

• If your business would otherwise be based in a standard office, it’s probably suitable for your home. Elizabeth Anderson from The Telegraph put recruitment, graphic design, consultancy and freelance writing in their ‘Highest Paid Jobs You Can Do from Home’ list, and it doesn’t stop there! Any online business idea can be executed from home if all you really need is a laptop and a phone.
• If you’re making a smaller product and have the space to do so at home then there won’t be a need to waste cash on external premises. Baking, cookery, jewellery and even candle making businesses are all examples of successful home business.
• If you will primarily be working from other people’s properties (e.g. cleaning, hairdressing or repairs) then a home office as a central admin hub will save you unnecessary expense.
• Childminding, tutoring or pet sitting businesses are generally based within your home, however, research the insurance and tax issues which may arise from the stream of people coming in and out, and be conscious of traffic/ parked cars on your street.

Disadvantages Of Running A Business From Home

• Your Home Isn’t Suitable

Sometimes the nature of business means running it from your home isn’t possible. Do you need special equipment that won’t fit in your house or garage? Perhaps hiring a workshop might be the best answer. If you have enough space outside, building your own can be a good alternative, but you may need planning permission first.

Maura Thomas is a speaker, trainer and founder of RegainYourTime.com who stresses the importance of creating a suitable workspace for your home business:

‘‘Consider about your physical work space: is it really a work space? Do you have an appropriate amount of space for the tools of your work, such as ample room to comfortably hold your computer and peripherals, some space to write and do work that isn’t computer based, plus storage space for other tools and accessories, like pens, stapler, paper clips, phone, calculator, reference material, unopened mail, glass of water, outlets and USB ports, etc.? If you routinely “work” squeezed into a corner of your couch, the end of the dining room table, or squeezed onto some flat surface in a corner of your bedroom, then you are seriously impacting your productivity. Most workers today are knowledge workers, and therefore our tools and products are information and communication. If you work from home, have you taken this work seriously enough to dedicate some real “work space” in your home, or do you just pick up and move around based on whatever else is happening in your house at the time?’’

• Difficult Neighbours

Even if you just have a few deliveries throughout the day, vans blocking the street can be a reason for neighbours to complain. Any noises, traffic or even smells from what you produce need to be taken into account; let them know in advance that you will be working from home at the beginning of your venture and that it shouldn’t cause much disturbance. Keeping noise to a minimum during unsociable hours will help keep relationships (and therefore your business!) running smoothly.

• Constant Visitors

Will there be a stream of clients at your house? Can you work your way around this problem by visiting them? Music lessons, personal training and tax returns businesses can limit the amount of people passing through and potential noise if you can split between yours and theirs’s.

• Distractions

You must make it clear to family and friends when you’re working so your day isn’t punctuated with interference prohibiting your work. Once you’ve got over this hurdle, the next challenge is avoiding distractions from things inside your house. It’s easy to reach for the TV remote or spend longer than usual in the kitchen when the lines between work and home are blurred. Create a clean and tidy space that will help you concentrate and slip into a productive business mindset.

Minal Patel is the founder of Marketing by Minal and has been running her business from home since April last year. "My biggest tip to help you stay motivated and be productive is to schedule time in your calendar for specific tasks," she told us; "it gives you structure and makes sure you get things done. As you get more things done, you realise you are actually moving your business on and that's a great feeling.’’

• No Business Address

You won’t have the luxury of an office to put on business cards or for meetings. For lots of businesses, this isn’t an issue, however, concerns about professionality sometimes arise for start-ups who can’t afford a fancy address.

This issue can be solved by investing in a PO Box or virtual offices which not only give you a business address but can forward post to your home. Phone answering systems such as Moneypenny or E-Receptionist ensure clients aren’t ringing your home phone (or that your child accidentally picks it up).

If a coffee shop won’t suffice for a meeting, professional rooms and office space can be hired temporarily for a fraction of the price of a permanent office, especially in larger towns and cities.

• Overworking

After starting her bakery business, Jessica realised separating work and relaxation was a major problem.

“I genuinely believe that the home worker works longer hours because they are so desperate to prove they can work from home and still be productive. There’s the constant temptation to work – after dinner, in the middle of the night – and no easy way of getting away from it”

Running a Startup demands lots of hours to be poured into the business wherever it’s based; if the line between work and home is blurred it can be difficult to switch off. For your own well-being, make sure you dedicate time to family, friends and yourself without checking your emails.

• Isolation

The social aspect of working in a large office can be taken for granted, and it takes adjustment acclimatising to working in solitude. You may constantly be talking to people over the phone or meeting with them, but if your business isn’t client based you may crave communication. Set aside fixed times to socialise as a break; whether it’s walking the dog with a friend or going to a class you will come back feeling refreshed and motivated.

Anna Lundberg is a personal coach and business consultant who found that structure was the way to combat the isolation aspect of working from home...

‘‘I would think about what it is about working from home that really appeals to you, as well as what might be challenging for you personally. You can feel very isolated if you’re home alone all day: are you comfortable with that? Would it be better for you to find a co-working space where you can have more social interaction? In my case, I was a little worried about how I would manage to stay focused without the structure of office hours and managers to check up on me – in fact, I’ve had the opposite problem! I’m very self-motivated and engaged in the work I’m doing, so what I’m actually struggling with is taking breaks, allowing myself some proper time off, and pausing to celebrate my achievements along the way.’’ 

What businesses should you consider basing elsewhere?

• Manufacturing parts or products that can’t realistically be done at home probably means you should invest in space for the business to work. Anything from upholstery, carpentry, catering to making clothes or jewellery on a large scale might need a specialist workspace.
• If you’re expanding your business and hiring, you’ll probably need to be together the majority of the time. Investing in external space might help you communicate and work more effectively than working from home.

Weighing up the pros and cons of starting a home business should begin to lead you down the right path. More than often, successful businesses start off at home whilst manpower is down to one or two people and slowly expand into larger areas and workspace as your business grows.