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Many small businesses are set up from home, especially when they’re first getting started. Here are a few best practice top tips you need to know about running your home business.
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When thinking about running a successful business from home you need to consider a number of factors.
The nature of your work needs to be suitable for home working – for example, running a scrap metal business from a home in a quiet residential area may not be conducive to good relations with the neighbours and the local authority. Even, what might be considered to be minor inconveniences to those who live nearby, such as frequent deliveries or regular visits from customers, can cause friction.
If your business does lend itself to home working there can be many benefits, especially when it comes to costs. Premises are usually the next biggest overhead after salary, so not renting or buying business premises can keep your outgoings down. This can be a great benefit in the early days when revenue and cash flow may be challenging to predict and manage.
Unsurprisingly, many people find the prospect of a 60 second commute far more attractive than an hour or so each way to and from work: a couple of hours a day equates to more than an extra day that you can spend on your business each week! You also avoid the expense of travelling.
Working from home is not for everyone. Some people find it hard to focus on their work, especially when there are domestic distractions such as household chores, needy children and pets.
To avoid distractions it can help to carve out a space that’s dedicated to work, such as a room, a garden shed, or a screened-off area – a practical space that when occupied by you indicates that you are ‘at work’ and not to be disturbed.
Some individuals feel too isolated when working from home, but that’s much less of a problem these days when it’s so easy to keep in contact with associates, suppliers, customers and clients via email, social media and telephone.
The nature of your work needs to be suitable for home working – for example, running a scrap metal business from a home in a quiet residential area may not be conducive to good relations with the neighbours and the local authority. Even, what might be considered to be minor inconveniences to those who live nearby, such as frequent deliveries or regular visits from customers, can cause friction.
If your business does lend itself to home working there can be many benefits, especially when it comes to costs. Premises are usually the next biggest overhead after salary, so not renting or buying business premises can keep your outgoings down. This can be a great benefit in the early days when revenue and cash flow may be challenging to predict and manage.
Unsurprisingly, many people find the prospect of a 60 second commute far more attractive than an hour or so each way to and from work: a couple of hours a day equates to more than an extra day that you can spend on your business each week! You also avoid the expense of travelling.
Working from home is not for everyone. Some people find it hard to focus on their work, especially when there are domestic distractions such as household chores, needy children and pets.
To avoid distractions it can help to carve out a space that’s dedicated to work, such as a room, a garden shed, or a screened-off area – a practical space that when occupied by you indicates that you are ‘at work’ and not to be disturbed.
Some individuals feel too isolated when working from home, but that’s much less of a problem these days when it’s so easy to keep in contact with associates, suppliers, customers and clients via email, social media and telephone.
As a sole trader you may have to inform some bodies of your intention to run a business from home through word of mouth and official documentation. See below for our business checklist:
A standard home insurance policy is unlikely to cover business activity so make sure you take out some additional insurance for things like loss or damage to office equipment or furniture. Normally this doesn’t cost much extra, and it can be covered in a combined domestic and business policy.
If you’re doing more than simply operating an office from home, have a business bank account or have taken out business loans, you’ll probably need specific additional insurance. For example:
You normally don’t need to pay business rates, if, for example, you:
When you have cash flowing, you may need to pay business rates, on top of council tax, if, for example, you:
To find out more about business law, contact the Valuation Office Agency (VOA), or if you’re in Scotland, your local assessor.
Contact:
When starting your own business from home and you begin to make employment decisions, make sure that:
HMRC normally allows you claim part of the running costs of your home via your business bank account. Use the checklist below to highlight the running costs you can claim. Login to save this checklist to your profile for future use - as you work through the list, any checkboxes that are ticked or unticked will be automatically saved to your profile. (To register to join and enjoy the benefits of membership click on the link at the top right of the page. It will only take a few minutes to create your profile).
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