The U.S. Small Business Administration estimates that more than half of all U.S. businesses are based out of an owner’s home. That comes to more than 18 million businesses.
Mine is one of them.
If you’re looking to set up a home-based business, the Internet is brimming with practical advice. This column is meant to give an insider’s view.
So here it is – the good, the bad and the ugly.
The best thing about running a home-based business is the money you save. With no office rent payments, an owner is free to invest those savings back into his or her company. That’s important for most startups, because poor cash flow tends to sink more small businesses than any other single issue.
Home-based entrepreneurs also save commuting costs, and the federal tax code allows owners to deduct certain home-related expenses at tax time.
Find a good accountant. While you want to get every deduction that’s allowed, you also want to avoid getting audited, which is more common when taxpayers claim generous home-office deductions.
Some of the same factors that make a home-based business so great also can make it a burden.
Take convenience, for example. Because my office is so close – just down the stairs in a finished basement – I have a tendency to always be at work. I hear the phone each time it rings and the fax machine each time it prints. Calls don’t stop simply because the weekend arrives.
Briles Johnson, director of the nonprofit Women’s Business Center of North Carolina, said this problem is common among entrepreneurs who work from home.
“You have to set strict limitations about when you’re going to work and when you’re not going to work – close the door, turn off the phone, turn off the computer,” she said. “It’s really setting those boundaries and limitations for yourself, so you can truly separate your business from your home and your personal life.”
Easier said than done, she concedes.
For me, the tipping point came about a year ago, when I came to realize that I would literally collapse if I continued to push my mind and body both day and night. Only then did I begin to set reasonable limits.
I become more attuned to the signs that my body is reaching its physical and mental limits. Yet five years in, I still find it hard at times to leave the job behind.
Would I have that problem if I worked away from home? Probably so, but there is something about the act of getting into a car and leaving work that signals the mind and body to relax and slow down.
Isolation is another problem faced by entrepreneurs at home. There is no podmate or co-worker to provide feedback or intellectual stimulation. In some ways, this is more of a problem than the tendency to overwork.
I often compare notes with one of my neighbors who works from home as a consultant. We both acknowledge the loneliness and sometimes invite each other to lunch, as much for the interaction as for the food itself.
Just because I work from home does not mean I am “home all day.”
I sometimes get the stinkeye when my wife comes home and the breakfast dishes are still in the sink. What does she think, that I’m home all day watching Oprah?
My point is this: If you plan to run a home-based business, it’s important to set some expectations, for yourself as well as for family members. For starters, your office must be respected as a place of work. And your time spent there must be respected as work time.
Finding distractions is easy. You walk past the window and you see that the lawn needs mowing. You walk by the laundry room and realize that your good white shirts are all in the hamper. It takes a special focus to stay on task.
Glenn Burkins is editor and publisher of Qcitymetro.com, a news site for Charlotte’s African-American community. He is a former Wall Street Journal reporter and Observer business editor.
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