The key to success in a home office-based business is to conduct yourself as you would at an external office.
Home offices have many advantages including the savings on traditional business expenses such as rent and transportation, meals and parking. There is usually no traffic jam between your bedroom and your office! There is generally also less staff to manage and the total overhead expenses are very low. Additionally, you save time by not have to commute to work and can set your own hours and priorities.
Many equate home-based businesses with small returns but that is the farthest thing from the truth. Home businesses can earn just as much, if not more in many cases, than bricks and mortar ones. And at significantly less expense. Like any business, returns are based on effort and productivity.
It takes a real commitment and discipline to work at home. The commitment aspect was discussed in Part 1 of this blog series.
Home Office Setup
In this post, we will look at the important considerations in setting up and running a home office. Let’s look at what is required to make your home office one that supports you, your business and your success.
The first step is to make a comprehensive list of all the things you will need to run your business.
Being successful in a home office requires creating a space that promotes efficiency and productivity. It also must be a space you enjoy spending time in.
It must be set up with the same tools, furniture, and equipment that an external office would have. This includings a computer and printer, business phone, storage, a proper desk (not an Ikea table!), office supplies and personal decorative items.
Insofar as equipment is concerned, a phone, a computer and an all in one printer are the standard basic requirements.
If you are working on your computer all day a dedicated work desk may be all you need.
It can be tempting to skimp on key equipment and splurge on less necessary items, such as office carpeting. Money should first be invested in creating a proper workspace. Invest in a good solid wood desk and a comfortable executive chair that can provide back support.
If you see clients at your home office you will need guest chairs and maybe even a small conference table, space permitting.
Most businesses need storage, but how much you need depends on how paper-driven your business is and the number of supplies you use daily and/or if you are required to carry inventory.
A bookcase can be an excellent storage unit. You can put your files in nice file folders and supplies into decorative baskets. Then add some fun and interesting personal items to make it feel like a reflection of you.
I personally have a separate dedicated home office space with a big mahogany executive desk (that I am in love with!) 2 chairs, 2 small filing cabinets, and a bookcase. All in all, my home office is a real “workplace” designed for work and nothing else.
As a decorating note, the color blue is associated with success. My office walls are a lovely sky blue.
Making your list of requirements will help you to determine how much dedicated space you will need for your office.
This can be a separate room or a secluded part of the house where you can work quietly.
Sometimes you can use partitions to create the enclosed home office feel.
If you are always on the phone then enclosed dedicated space is best, unless you are home alone while you work.
If you are using a room in your home you can deduct a portion of your rent or mortgage and utility expenses from your revenue at income tax time.
Next, you need to create a daily workday routine and determine your office hours. Setting a routine will help you differentiate business hours from private time. Your hours should correspond to the hours that your clients keep so you can always be available to them.
If you need to leave the office forward your office telephone to your cell phone. Being available is quintessential in client-based businesses.
Establishing regular office hours can also help minimize distractions, and unannounced calls, or drop-in visits from friends or family.
Once your office hours are set, don’t forget to hang a clock on a wall or place one on your desk, even though your computer has one. When working from home it is easy to lose track of time and before you know it you have worked 15 hours 4 days in a row!
Even though you work from home, there still comes a time when you have it to call it a day and “go home”.
My morning routine consists of getting dressed for work, putting on my jewelry and then opening the lights in my office. At the end of the day, I close my office lights and door, change clothes and remove any jewelry. It may sound silly but removing my jewelry is significant as I do not wear any in my private life. Now my private time begins.
Invest in your home office. If you need to purchase equipment such as a computer or a printer, for example, do not try to save a bundle. These are your work tools and you need to have items that will stand the test of time; not break down just when you need them the most.
When it comes to phone lines make sure you have a separate and dedicated business telephone number. You don’t want your children to answer the phone or be able to pick it up during one of your own calls. This gives the impression that you are not running a real business. Of course, this can include using a cell phone, or a VoIP (Internet-based) phone.
A toll-free number is always a good idea.
Have lighting right above you and a smaller task or desk lamp for close up work. This prevents eye strain and headaches often associated with long term computer use.
When it comes to your digital data make sure you purchase a backup drive or subscribe to an online service. You should automatic backups scheduled every day, or even several times a day.
Losing all your information in a crash or from a virus is every business owner’s worst nightmare. There are great online backup service providers that back up to a cloud and are not expensive. Personally, I like Carbonite, as it is efficient, quick and cost-effective.
It is important to have a battery backup for your computer in the event of a power failure. This gives you the time you need to save documents and close files before it all gets lost.
Make sure you always have the latest anti-virus software. A virus can shut you down for good.
Make sure to purchase proper business insurance. Home office contents are not generally covered by a standard home insurance policy and therefore requires an extra rider.
You should also consider business interruption insurance against loss of income. This will protect you in the event that you cannot operate your business because of a flood, fire or theft.
Ensure your assets are at replacement value (and not at today’s value). This would be what it is going to cost to replace the item years from now.
If you are required to carry inventory you will need additional insurance coverage for it.
Make sure you have a professional email address with your company name, not a Yahoo or Gmail account. A proper email address shows your professionalism and realism.
A website is especially important even if it is only one page, Again this shows that you are in business for real.
Separate the personal from the professional in order to keep things in order.
You will need to set up a proper business bank account. Income and expenses of your business and your personal income and expenses should never be mixed.
Store personal bills, checks, mail and records in a different place in your home from your office. Fully segmenting these two parts of your lives.
At tax time this is invaluable as there are many deductions to be had for home office space, equipment, and supplies. The more you can prove that the office is a completely separate and dedicated entity the better in terms of tax benefits.
What this all comes down to is that a home office is a place of work during working hours.
The more effort you put into creating a dedicated workspace that suits your needs, personality and lifestyle, the more productive and hence, successful you will be.
You will be spending a lot of time in this space to take the time to really “make it yours” with personal knick-knacks, photos and other items that make you feel supported and productive.
TIPS OR QUESTIONS
Share your home office tips or questions with us below. We would love to hear from you!