How to run a business from home?
It’s a thornier question than it might at first appear and one that has puzzled and occasionally frustrated many small business owners.
Let’s assume that question applies to someone who already has a great business idea rather than someone trying to think of one. The real question is just what are going to be the opportunities and problems associated with making your home effectively your corporate headquarters?
Funding and Borrowing Money
The vast majority of small businesses need some sort of capital to use and grow with – that applies just as much to a home business as it does to any other.
For example, perhaps you want to construct a separate office area to insulate you from family distractions and disturbances or just to invest in new equipment.
Some people understandably flinch at the thought of trying to borrow money due to:
- the embarrassment factor – not everyone likes facing a bank manager for example and needing to justify their requirements in-depth.
If some of that applies to you, don’t worry – funding may not be a significant problem.
Today the business funding market is highly competitive and there are numbers of organizations out there who may be willing and able to help.
If you look at a good example, such as Everline.com, you will see clearly laid out in front of you a range of options and associated costs – and all the information is free! (check out their guide here). Note though that some, including this company, may not be suitable for start-ups, as they may require 24 months of trading history before a loan will be considered.
You must though be sure that you’re protecting your own interests both by shopping around and more importantly, familiarizing yourself with at least the basics of business borrowing. There are some great information sources on the net including some of those provider sites themselves.
Also, be sure you are borrowing an amount that your home business will be able to support.
Modern free-thinking providers of business finance shouldn’t have any fundamental problems with you starting a business from your home address. Why not have a quick look-around to see what’s out there?
One of the major problems you might face arises from the potential difficulties in segmenting your home and business activities. This is just a slightly polite way of saying that you will need to make sure that other members of your family are not constantly interrupting you while you are trying to work.
That might suggest you will need to spend money in order to create a separate office or workshop base for yourself. If you don’t, prepare for family friction!
Focus, concentration and discipline are all essential when you are at home and not always easy to achieve.
If you were working in a conventional office, you would not be likely to suddenly leave your desk and work in order to start, for example, cleaning the windows because they looked dirty.
You will need a degree of mental rigour when working at home to avoid being diverted onto those home imperatives that will be all around you.
Get an Accountant’s Advice
Making the most of cost deductions for working at home when preparing your annual accounts can be tricky.
HMRC can be sensitive to people trying to write off major home renovations as a business expense!
However, there are many very legitimate deductions you should be making for business premises expenses even though you are working at home.
A good accountant should be able to help you with these.