What to Know Before Starting a Business from Home
Are you thinking of starting a business from home? More than half of all small businesses start at home, and technology is only accelerating the rise of home-based businesses as it becomes easier to run a business 100% online.
For some freelancers and professionals, starting a home business is as simple as sitting down at the computer and finding clients. However, there’s more that goes into building a sustainable and profitable home-based business. Before launching your business from home, here’s what you need to know.
Pros and Cons of Starting a Business at Home
Short commutes, flexible hours, and the ability to do laundry on your lunch break — the benefits of working at home seem endless. But while running a business from home offers convenience and low costs (including some great tax breaks), it’s not all positive.
Operating from home can make it harder for a business to build credibility or expand. Sharing space with spouses, kids, and pets also leaves entrepreneurs prone to distraction.
Home-based businesses also come with certain risks. For one, your home could be seized to satisfy business debts and legal judgments. Structuring your business as a limited liability company prevents this by protecting your home and other personal assets from business liabilities. Compared to other corporate structures, LLCs are easy to form. This guide to forming a New York LLC walks you through the process.
Home business owners also need insurance beyond the standard homeowners coverage, which only reimburses up to $2,500 in business losses and doesn’t cover business liabilities. Freelancers and other low-risk businesses can purchase a homeowners policy endorsement, but businesses with liability need standalone coverage.
Making Space for Business at Home
Now that you know how to protect your home business, how can you set your company up for success? First, you need a functional space to run your business.
Where to put it
Don’t have a home office? These are the best workspace solutions for home business owners:
- Converting a formal dining room or guest room.
- Finishing a garage, basement, or attic.
- Building a room over the garage.
- Constructing a bump-out or modular addition.
- Building an accessory dwelling unit.
- Buying a prefabricated shed, studio, or garage.
How to furnish it
Once your space is established, use these tips to create a productive, ergonomic office:
- Invest in an ergonomic desk chair and standing desk converter or height-adjustable desk. These two pieces of equipment are the foundation of a healthy home office.
- Include ergonomic accessories like adjustable monitors, an anti-fatigue mat, ergonomic keyboard and mouse, and footrest.
- Create good lighting with a mix of natural light, overhead ambient lighting, and task lamps.
- Use modular storage systems, floating shelves, cabinets, or a combination of the three for home office storage.
- Corral wires with one of these sleek solutions and use a surge protector to protect devices.
- Close the door. A private home office is a productive home office. Set boundaries with family and establish working hours to avoid distractions.
Plan B: Buying a Home Built for Business
Not every entrepreneur has the cash, time, or square footage for a major home office remodel. When you need more space and need it fast, relocating is a better choice. When buying a house for business use, consider total square footage and layout as well as location. The best locations for a home business have high internet speeds, business-friendly zoning, and an accessible location for vendors and clients.
With a productive workspace and the right protections in place, you’re ready to launch your home-based business. Start by crafting a business plan and securing financing for your small business. And when you need help guiding your home business to success, reach out to business resources like the Small Business Administration, Small Business Development Centers, and SCORE for local assistance.
By Lisa Walker