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Office or Home Based Business?

By Yaro Starak
16 Comments

Last year I had an office in downtown Brisbane (well almost, up a hill downtown Brisbane is more accurate). I needed an office to run an English school but after I shut that down the school in the second half of 2004 I was running a home based Internet business from an office. I was paying $1400 a month for the privilege too. I spent a lot of time scheming ways to either reduce my rent bill by inviting sub-tenants or breaking my lease early and seeing how much that hurt. I tried the first with little success and then negotiated to break my lease a few months before contract end. I left the office in 2004 after throwing a lot of money away on rent. It was a lesson learnt of course and one of the main things I reaffirmed was that I did not require an office for what I wanted to do and would not likely get one again in the near future.

A lot of small business owners worry that running a home based business can hinder their ability to convince clients to buy because of the perception that they are not professional if they do not have an office. Another possible concern is hiring new employees – will they be willing to come work at your home? Obviously the industry you work in will determine how much the “office” factor impacts you but I do not believe having an office is justifiable unless you are starting to grow into a multiple employee business.

If you are a solopreneur you do not need an office. Rent is wasted money. If you absolutely have to convey professionalism to a specific client put on your suit and arrange drinks at a classy venue. Then impress them with your personality and let your product or service do the talking. If the client sees you and what you do as valuable to them they are not going to care where exactly you go to work.

When it comes to hiring employees you simply tell them that they must be prepared to work from your home office as part of a condition of employment. A good employee will be excited to land your job and unless they are considering a lengthy commute to get to work at your place, the home office factor should not be a concern.

Sometimes the lack of a physical address for mail is a worry since you don’t want to be listing your home address publicly. I maintain a city post office box which I use for all mail, even when I had an office. I do this for two reasons – 1) I would not want to list my home address on a website and 2) if I ever move the postal box doesn’t, as long as I keep paying the rental fee (about $150 annually – it’s a tax deduction too!) I have a permanent address for mail that I can use for both business and personal purposes. Occasionally you cannot use a postal box for a particular service or delivery in which case I give out my home address.

I used to be concerned about the psychological impact of the home office. My housemate works a standard 9-5er at a big Australian company. One of the things that she really enjoys about her work is the clear definition of when she is “on” and “off” work. When she leaves the office that’s it, no more thinking about work. With a home based business I roll out of my bed and switch on my computer to be at work. This could be a considered a bad thing since whenever I am at home I am also at work. The lines are blurred. Worse still I take my laptop to cafes and restaurants so it appears that work is invading all aspects of my life.

Of course though if you are a true entrepreneur you will know the “my business is my baby” feeling. If your business is your hobby, what you love and enjoy then you would choose to be at work doing what you love anyway. My housemate wouldn’t make this choice – who would choose to be at work?!? Having the lines blurred is only a problem when you don’t know how to stop working. I for one am very good at recreational activities and have no problem finding time for them. If that’s not you and you are at your computer in your office all the time then perhaps you need to set yourself some strict time guidelines to control your working day. Discipline is a good skill to have in business and a little self imposed structure can go a long way to beat both the procrastination and overwork demons.

Adding to the benefits of having a home based business is having all your familiar amenities available to you. You are able to cook a fresh meal cheaply whenever you are hungry and listen to your music as loud as you like without worrying about disturbing anyone around you. Heck if your house is empty during the day while you are working at home you can even go to work in your underwear and walk around half naked. Okay maybe that’s not a good idea and maybe some self discipline in this area is a good thing, but I think I make my point about the freedoms available to a home based business entrepreneur.

The benefits of a home based business are significant and the drawbacks of having an office (rent, lease contracts, having to be somewhere at a certain time) are added worries that you don’t need to opt for unless you can see a clear reason why you need an office. Personally I am glad I have been there and done that regarding an office so I know what it takes to locate and contract for commercial space. One day if I ever want to start my own retail business or restaurant I will have skills to fall back on. For the time being I’m happy working from home and enjoy watching my bank balance increase rather than syphoned away to rent.

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16 Comments

  • The blurred lines of work and home is very valid. With the increased flexibility that work-from-home provides (like being able to pick the kids up from school, or in my case drop them off, go for a swim (up to doing 1300 metres per day now :D ) , and then maybe stop off and do some grocery shopping on the way to ‘work’ comes the fact that after dinner, it is easy to ‘catch up’ on those deadline items, etc.

    The downside is that is is VERY easy (from my experiennce) to spend too much time ‘at work’ because of the ease of commuting (like now!).

  • Hmm, given that I work in an office that we rent for our business, I have to almost not agree.

    I love working from home, I really do, its a great thing, but I love the clear border of where work and home is, I travel from home to get to work, and when I am here, I work (except for now ofcourse when I am reading your great blog yaro). When I go home, I work on the othe 200 things that I do in my day :) but nevertheless it provides a clear barrier of separation for me, and I find that very important.

    Next year when we move out of our current office, we haven’t decided on how we would run the business, we are really hoping to get a small office somewhere for cheap rent, just so we can be “at” work, it might be okay for a sole business owner to work from home, but when you have more then one person in charge, an office is a must.

    Alborz.

  • It appears that some people require a clear definition of work and not work. I have trouble justifying the rent expense…however if I was working with a group on a project and there wasn’t an appropriate home space to set up a group office (like for me at the moment it’s my room so I wouldn’t want anyone else joining me there) then an office is more appropriate. Sometimes having the rent expense makes you work harder because you take things just that bit more serious.

  • There are hundreds of ways to have an office without having the full cost of rental. Perhaps like I did – renting space in a large office that is not big enough to use all available space…

    I did this once for six months when it was important for me to have an inner city ‘profile’ for a project. I asked a business I had dealings with if I could use a corner of their large open plan office, with use of the conference room for meetings.

    This gave me a proper inner city business ‘address’ and hence a degree of ‘establishment’.

    This worked out well, paying just A$60pw – all phone communications was via mobile and I chipped in a bit for bandwidth via their broadband connection.

    I generally used the space only three days per week, with the rest of my business undertaken from my home-based office in a large regional centre 130km away.

  • Office or Home Based Business?

    Entrepreneur’s Journey: A lot of small business owners worry that running a home based business can hinder their ability to convince clients to buy because of the perception that they are not professional if they do not have an office….

  • The Home Business Inferiority Complex … Those Days Are Over

    Yaro Starak’s Entrepreneur’s Journey blog has an interesting post, Office or Home Based Business?
    Talking about his move from a traditional office last year into a home-based business, Yaro had the problem of running an internet business …

  • [...] Yaro Starak’s Entrepreneur’s Journey blog has an interesting post, Office or Home Based Business? Talking about his move fr [...]

  • Office Or Home Based Business?

    Good bit on the trade-offs of having an office at home or in an office building….

  • On the topic of having employees come to your home office to work – I believe that my staff should benefit from the same freedom that I do and therefore have arranged things such that they can work from their own homes.

    For the occasional face-to-face meeting we have been lucky enough to forge a relationship with one of our clients that lets us use space within their offices (not unlike that described above by MattE of PlusOne Marketing).

  • Luc

    Myself,

    I think that a home-based business can take away from the professionalism of a business if you ever meet clients there… some people prefer doing business this way and others do not. It just depends

    Also the PO Box rental is always a good idea because you never know and you don’t want people knowing exactly where you live. Whether you have an online business or not doesn’t matter really. Plus as Yaro said it is a tax write-off so why not use it.

    I am also a big believer in making mistakes in order to figure out what you really want; so renting and/or leasing just gives you more insight into the world around you if nothing else.

    Growing a business wherever you choose to grow it totally depends on how a person works best. Some people get more work done in a formal working environment while others don’t. What ever your style there is a way and method to suite you perfectly!

  • I remember the first time I went to apply for a job and was not told that the business was located in a home. I drove through the neighborhood (in a city different from my own) and thought that I had had to be going the wrong way! When I arrived at the address, I have to admit that I thought that the job was a scam. My view changed, however, when I went inside and met the business owner and other employees. If the business owner told me beforehand that it was a work at home business, I would have been psychologically prepared (and I wouldn’t have thought that I was lost).

  • I was an office administrator and my company moved. I was going to quit because of the time it took to get to work; so they set me up to work from home. They connected my computer to the business computer. It worked out great!
    http://www.marketersinmotion.com/blog

  • There was a time when I exclusively worked my home-based business from the bonus room above my garage. It was a difficult transition from a busy office to the empty room. What made it difficult was the pace of the business. Until the home business got rolling the highlight of my day was going outside and getting the mail.

    After a few months my home business got busy and I adjusted to working from home. I didn’t just get adjusted I loved it. No traffic, no tie, no watch, no boss. It was all good.

    I eventually got lured back into an office setting. The office setting does have its advantages but I now look back on how nice the home office really was.

    David Peterson Editor – USReference.com

  • I’ve been working at home since ’99 promoting affiliate program. However, the competition has increase dramatically in recent years, and now, in order to make any kind of decent living, you must find creative ways to convert your visting web traffic into paying customers…there’s just too much competition otherwise.

  • I agree with all the idea that you have but also in my own idea, I still go on with home base especially when your business is just starting but when your business is growing bigger and well and maybe thats the time to spent some for the rental or if your is good enough and continue growing maybe you can invest to have your own office its better that renting a building for your office. Its your additional point with your business.

    Revero
    Making money with blog

  • I would like to say office based business, if you are home based business, you should try office based business so that you can learn how to interact with different people and with different character. I found out that doing office based business can earn a lots of knowledge and experience since you’re having a conservation with them so you probably can learn how do they start their home/office-based business. Because a lots of people would love to sharing their thought with you

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