What comes to mind when we think of a home-based business? The thought of no commute, not having to dress up, more time with family, and relaxing breaks. When you compare it to the stress of traveling to work and hours away from home, it sounds appealing to work from home. It can also be economical as it saves on gas and the overhead of leasing space. Despite these apparent pluses to working from a home-based business, a better choice may be to have an office or store space. There are factors to consider before deciding whether to work from home or lease a space.
If you just have started a micro-level business and it will grow slowly, you can start it from home. But, in deciding to stay home or go for leased office space, ask yourself these questions:
Can you bear the interruptions if you are working from home?
Can you manage the isolation during working hours if you are living in an independent suite not shared by any of your family members or friends?
Do you mind your clients coming to your address? Do you want to mix your clients with your environment?
Are you planning to grow your business and hire more people? This will also require more space and furnishing according to the requirement of an office.
Leased office space
Leasing an office is a good option if it is in an area with low rent and near to your home. Leasing an office means the property is not yours, and you are not tied up to the place. If you are not getting good business in the area, you can easily lease space in another area with more business growth options and potential customers.
The cons of leasing an office will leave you bearing an additional payment for rent as well as possible rent increases that you cannot control. Also, the leased office space will not be considered equity to your business.
Working from home
The best thing about a home-based office is that you are not going to pay for an additional place for your newly started small business that has to prove, yet it’s worth it. You do not have to pay a monthly or annual rent for a leased office space.
Your business is new, and customers may take up to 30-90 days to pay you, and, in the meanwhile, you will need to get a loan for the rent of leased office space if you choose to go that route.
A home-based office means low overhead costs. You can outsource service providers for your business without hiring them. For new businesses, there’s another tax-driven advantage of starting in your home. The IRS allows home-based small business owners to deduct a proportionate part of home expenses off of their taxes.
Staying home and running a home-based office is not only beneficial in terms of having tea or coffee breaks in your own backyard. It has many potential benefits for new small business owners. Knowing the advantages, and disadvantages will help any business owner decide whether to lease office space or build and grow their business from their home. Though most of the reasons are favorable for a home-based business, specifically speaking about cost savings, there are still some drawbacks such as easy distractions, others not respecting your work time or space, and the lack of interaction with co-workers. However, being able to work in your pajamas may be the only plus you need to choose to work at home over leasing a space.
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