DRA digital marketing

The Pros and Cons of Setting up a Business From Home

By Christina

Feb 03, 2016

If you have decided to set up your first business, and are considering working from home, you need to know more about home working and if it is suitable for you, and when it is right to finally move to business premises.

  • Working from home doesn't suit everyone
  • You have to be motivated
  • You have to be good at time management
  • You have to get your family on board

Many people choose to work from home as a life style choice for various reasons, so starting a business from home is no excuse for you not to succeed.

Pros & cons of working from home

Will companies want to work with a home based business?
Working from home has become an increasingly accepted part of life.  Directors, managers and employee's within large corporations are now spending days working from home during the week, and they are seeing the benefits.

Is it legal to run a business from home?
It is always best to check with your local council to make sure you aren't breaking any by-laws or whether you need to register for business rates. 

Visit the British Government website to find out more

Check your mortgage agreement or speak to your mortgage provider, as they own part of your home, they may have certain stipulations you'll have to consider.

Your home insurance may also cover you for working from home and having a number people on your premises at any given time.  Check your policy for details.

If you are in rented accommodation, you will need to talk to your landlord to get permission to run a business from home.  Problems usually arise when neighbours complain about noise or visitor numbers.

What are the benefits of setting up your business from home?
The benefits of starting a business at home are numerous, the obvious one is the cost saving.

Office space overheads are a big cost burden for a new business, especially in the early stages, when revenue and cash flow are hard to predict and manage.

You will also get more out of your day because you avoid the commute.  And generally you have fewer distractions at home then you do in an office.  What would take me 5 days to complete in an office environment could be completed in 2-3 days at home.


What are the down sides to setting up a business from home?
You may feel isolated but this can be avoided if you get out to networking meetings, it helps to grow your business but it is also nice to meet like minded people.

When you need to take on staff, you haven't got the space to expand and your potential employee may not be happy to work in your home.

A way around this is to outsource anything you are not good at, or don't have the time to do.  You can outsource your accounts, admin, telephone answering, marketing and advertising.  This frees you up to get on with what you are good at - dealing with your clients.

Getting your work space right
Many people running a small business from home aren't chiefly motivated by cutting costs.  For many it's a simply lifestyle choice that they have made work for them and have not felt the need to move in to business premises.  If this is you then getting your work space and working hour's right is very important.

  • If clients need to visit you, consider the best location for your office.  Usually downstairs in a room next to your front door.  You will not want clients walking through your home.  You can always use meeting rooms at companies who specialise in dealing with home workers such as Regus.  If possible arrange to meet at your clients business address.
  • You will need a work space separate from the rest of your home.  I originally tried working from the dinning room which meant I spent 90 percent of my time in the same room, it became dull very quickly.  I 'upgraded' to the spare bedroom after it was fitted out as an office, it made a huge difference being able to close the door on my office and forgetting about it over the weekend and evenings.
  • Set your workspace up so it helps you focus and work productively throughout the day.
  • Have a separate business phone line and only answer it during working hours.
  • Set your working hours and stick to them.  Just because you are running your own business does not mean you have to work every hour.  You are now in control of your life, it's the best time to set goals for your personal life as well as your business.
  • Attend business networking events/meetings.  It's a great way to find new clients, but it's even better getting to talk to like minded people.  Personal relationships are very important in business, never under estimate having face to face contact when operating a business.
  • Also use social media to connect to people and other companies; this also helps with the isolation issues of working from home.  Social media is a great way to connect with your customers and experts in your industry, or to even prove you are the expert.
  • Set yourself goals you have to hit every day until you are used to working in a home environment.  Client deadlines also keep me motivated.
  • Explain to family and friends you are working and they shouldn't disturb you during working hours.

When is it time to move to business premises?
If you are operating from home to 'bootstrap' your business it can be crucial to keep a close eye on when doing so might start to hold you back.

If you need more room because you need to employee staff, or you haven't got room for storage, access problems for deliveries or a high volume of client visits, then it's time to take the next step.

The key options for professional surroundings:

Virtual Offices
This can often be the first step into a professional environment.  It can give a business a prestigious business address, receptionist and PA services and meeting rooms without the cost of a physical office space.  Many small businesses take this option, allowing them to work from home but having a professional environment to hold meetings from.  It also means clients do not have your home details.

Shared Workspaces
If you can't face working from home, or need to connect to people on a daily basis a shared workspace could be your solution.  Shared workspaces have started to boom recently.  Shared workspaces encourage collaboration between individuals, and also provide the intangible buzz of being in an office.  It represents a smaller investment than permanent office space options.

Serviced Offices
If your business is growing and you want a professional workspace without the commitment of a long lease, then a serviced office is your best option.  The best providers will be able to offer flexibility over terms so you can expand easily.  You will have a private office space and only have to worry about one bill that covers all the costs of the office (reception, heating, lighting, water, private space, etc).

Leasing, building or buying premises
This requires a large investment and will give you minimal flexibility. 

When your business reaches the right stage further down the line, a long-term lease or buying premises can be the best option.

To give your company the best chance of survival it is important to take advantage of the more flexible options to give your business room to become established.  Above all, make sure your premises reflects where your business currently stands, where you want it to go and how you want it to be perceived.

Further Reading
Checklist for establishing a successful website for new businesses

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