Starting a Home Business? 5 Factors to Consider

Home Business

by
January 8, 2015

Starting a home business is very enticing option for business owners who are not required to have a brick and mortar location for customers. There are many perks associated with running your business from home.

For starters, there is no need to get caught up in the morning rush and headache of traffic. The reality is that the time spent getting ready for and getting to work could be spent handling important morning work tasks. This daily head start on work tasks can be very beneficial.

The primary motivation for running a home based business is cost savings. Money that is not allocated towards rent can be used for other important business expenses like advertising or paying employees.There is also the extreme freedom without being confined to an office.

For some, the extreme freedom could be problematic since it could result in a loss of focus and motivation. Distraction avoidance is key for those types of business owners.

Regardless of the rewards or challenges, consider the following 5 factors before deciding whether or not a home office is the right choice for you. 

Factor 1: Creating a Business Plan

Regardless of your business type or location (home or office), create a business plan. Doing so is important in ensuring you set and reach your business goals. One major reason why new businesses fail is because their owners fail to realize the time, effort and capital that goes into running a successful business.

Create a business plan that clarifies your expectations, dictates a long-term goal, and specifies how and where money will be spent. Set goals and write a plan of how you will reach those goals. For example, if you are offering a product, anticipate having a large order and plan on how you will fulfill that order.

SEE ALSO: 5 Business Mistakes Commonly Made by New Businesses

In addition to organizing your goals, a business plan will be useful when approaching potential investors or business partners.

Factor 2: Task Management

One major factor to consider when thinking about starting a home business is task management. Working from home can bring up a lot of distractions such as a barking dog, screaming baby, ringing doorbell and the easily accessible refrigerator. All these distractions can lead to procrastination which can be the death of a new business.

Without the traditional office setting it an be difficult to prioritize specific tasks and get motivated to complete them. Set daily goals and time limits of what needs to be completed and how much time you can dedicate to completing it.

To help minimize the distractions, let your friends and family know of your goals and ask them to respect them. Ask them to avoid calling or visiting during your work hours and commit to only responding during your “break.”

Factor 3: Zoning Ordinances

Different areas have different zoning ordinances that must be considered before starting a home business. You might live in an area that has specific rules and regulations set by the homeowners or community associations that will not allow you to run your business from home.

On the other hand, if you plan to run a business that operates heavy machinery, makes loud noises, emits smelly fumes or stores and or works with hazardous materials you may or may not be able to do so out of your home depending on different zoning ordinances. Check out your city’s database to see whether or not you are eligible to run your business from your home.

Also consider tax benefits. The IRS allows you to allocate and¬†zone a specific portion of your home as an “office” and deduce that from your business taxes. For further information for home office tax deductions, visit the IRS website.

Factor 4: Family Considerations

Family members who live in your house must be made aware of your business plans and their role and responsibilities in those plans. For example,¬†communicate with your spouse and or children and let them know not to approach you during your work day (or whatever hours you have decided to allocate to work).¬†When asking for their cooperation, ask…do not demand. You will be more effective.

Let your spouse know that although you are physically present in the home, you cannot help him or her with tasks around the home until the end of the “work day.” However, do not let your business deteriorate your personal relationship. Frustration and arguments will definitely be reflected in your business activities and productivity. Try to keep everyone happy.

Lastly, remember to separate your time dedicated to the business from the time you dedicate to your family. When working from home, it is easy to allocate disproportionate time to your business.

Remember to dedicate realistic hours to work and spend your spare time with your family. It is not fair to you or your family to dedicate all your time to running your business. There are other things in life more important than business.

Factor 5: Get Out of Your House

Make an effort to get out of your house everyday. It is easy to get sucked into work mode when working from home and forget to ever leave the house. Go out, take a walk, check the mail or just spend 10 minutes under the sun.

Sitting behind a desk all day every day can be both physically and mentally tolling. Get involved with organizations and friends outside of your home that you can arrange lunch dates, seminars or just mental breaks with. These people will be good to bounce ideas off of as well as a source of inspiration.

Starting a home business is a good opportunity for those who do not have the capital to invest in a traditional office space. In addition, there is less pressure to make enough profit to write a rent check every month. Note, it is easier to move a business from your garage to an office than it is to do the opposite. 

By being aware of the potential obstacles you may face when running a business from home, you may be able to avoid them. 

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