Q&A: Home is Where the Heart—and the Business—Is
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Q: I have worked in the corporate arena for a decade but want to start my own home-based business. I know there are risks, but what is the downside of being my own boss from my house?
A: For productivity, convenience, and downright comfort, nothing beats a home-based business. Here, most every day is “casual day,” and the only obstacle on your commute is dodging the cat or dog on your way upstairs.
But home offices have their drawbacks as well. You need a measure of self-discipline to stay focused on your work, deal with distractions, and resist the temptation to put business aside in order to take care of chores or “play hooky.”
So before you trade your power suit for sweats, put some planning into your home office strategy.
Site selection. Choose a space that is well lit and ventilated, and has sufficient size for your work activities, files, storage, etc. Multiple electrical outlets are a must to support computers, telephones, desk lamps, and other equipment. And while many people rely exclusively on cellphones or Internet-based long distance today, consider installing a landline for your office. You don’t want spotty voice quality or service disruptions to interfere with your customer conversations.
Set some boundaries. Though nobody likes cubicles, they still afford office workers a measure of privacy. You need to do the same thing with your home office. Take steps to keep pets and children from continually wandering in and out during the day. Younger kids are unlikely to play quietly while you work, so consider full- or half-day daycare, or at least when a major deadline looms.
Know the rules, part 1. If you plan on utilizing the home office deduction on your taxes, remember that the space must be used exclusively for business. It cannot double as a den or spare bedroom unless you claim only a percentage of the room for the deduction.
Know the rules, part 2. Many localities have restrictions on the types of home-based businesses. They include having visits from clients or employees, and manufacturing and shipping/receiving activities. If the rules are too cumbersome, you may need to find space elsewhere for at least some of your work. Even if your activities are permissible, make sure they don’t create neighborhood traffic or parking issues.
Safeguard yourself. Not all homeowners insurance policies cover home-office items, nor will they protect you from other risks (e.g., business interruption, liability claims from an employee or customer, etc.). You may be able to obtain endorsements for the appropriate coverage, but business insurance tailored to your small business may prove more cost-effective.
Regardless of where your small business is located, you can always find more information by contacting SCORE. There you’ll find a wealth of information and resources, plus more than 13,000 counselors who can offer insights and ideas for no charge. For more information, visit www.score.org.