Whether you’re still working another job or don’t have the funds to get your own space yet, running a business from home is a great option for most startups and SMB’s to get their business off the ground.
By staying at home, you have the ultimate flexibility in where and how you work while keeping your overheads low, so you can focus on building up your customer base and profits. If you have the space for it, it’s a win-win situation.
So if you’re currently running your business from home, or are after tips on how to make it work, we’ve got all the information you need in this guide. So, buckle in and find out how we can help your business succeed without ever leaving your front door.
Do you need permission to run a business from home?
If you want to run a business from home, generally speaking, there’s no one stopping you. However, there are a few situations where you may need permission before you get going.
This mostly depends on the type of home that you have (if you’re renting, you may need permission from your landlord) and the type of business that you’re running.
If you’re going to have customers come into your home, for example, if you’re running a beauty business, then you may need to apply for a licence from your local council.
Similarly, if you’re planning to make structural changes to your home or add an extension to run your business, you may also need planning permission from the local planning office.
Benefits of operating your business from home
Running a business from home offers a whole heap of benefits, including:
- No commute to work, saving time, money, and emissions
- Lower overheads, as you don’t need to spend extra money on buying or renting an office to work from
- Income tax benefits if you have a dedicated office space in your home
- Flexibility, allows you to schedule work exactly when and where it suits you
- No office politics or drama. Or anyone eating your lunch that’s in the fridge. It’s just you, and you rule the coop
- Huge potential for growth by saving money that can be reinvested back into the business
Although we’ve not listed it as an official benefit, it’s still worth mentioning that working from home allows you to work exactly how you want (i.e. in fluffy slippers) with no one around to judge you for it.
Disadvantages of using your home for your business
Operating a business from home won’t be for everyone. The downsides you need to be warned of are:
- Difficulty separating work and home life, making it easy to become distracted by both
- Limited space, especially if you’re in a small house or flat
- Isolation – as it can get lonely working alone
- No meeting spaces, which can be a problem if you need to host clients
However, in our top tips below we’ll show how you can successfully navigate and avoid these drawbacks to make running a business from home your secret power.
Top tips for running your business from home
Ready to make the most of doing business from the comfort of your own home? Follow these tips to turn your idea into a well-oiled machine.
1. Create a dedicated working space
Operating your business from home can have a lot of benefits. There’s no commute, awkward office friends or reason to dress up. If you want to complete your working day in a comfy dressing down and slippers, there’s no one stopping you.
In the case of mumpreneurs, this flexibility in working environments, all while juggling domestic responsibilities and increasing income, is a godsend (Nel et al., 2010).
However, most mistakes from working from home come when there’s not a clear division between your work life and your home life.
If you want to make running your business from home a success, you should consider building a dedicated workspace that you physically use to run your business. Then, at the end of the day, you can leave this space and go back into the ‘home’ part of your life to relax.
This will help with your concentration and create a more healthy and balanced work/home life.
2. Think about coworking spaces
If you’re not ready to rent out or buy an office, but can’t concentrate at home, there is a halfway solution that you can take advantage of – coworking spaces.
Coworking spaces are flexible shared offices that people can come to work in, no matter what type of business that they work for. No one business owns the space – it’s a shared community that you can come and use at the times that suit you.
Coworking spaces are a lot cheaper than buying your own office, as you only pay a small rented fee or membership to come and go as you please. All bills, including power and WIFI, are taken care of.
But more than that, coworking spaces also provide a great opportunity to connect with other business people and form connections that you just can’t get at home. These social interactions have, in some recorded cases, positively impacted productivity in independent individuals (Mittal & Ranni, 2022).
They also might have more equipment than you have access to at home, including printers, scanners and more.
A lot of coworking spaces also have their own relaxed areas or meeting rooms, so if you want to meet a client you can also take advantage of this space rather than try and squeeze them onto your kitchen table.
Find out more benefits of coworking spaces and if they’re a match for you here.
3. Dream big, plan small
We know you have big plans and ideas for your business. But one of the common reasons why 60% of new businesses fail in the UK is that they try and achieve too much at once and don’t plan the small steps.
This is especially true for those that are starting a business while still employed.
No matter how many all-nighters you pull, you’ll burn out quickly without a proper plan. Rather than concentrate on those big milestones, break everything down into small, achievable steps towards your main goal. This will help keep you on track, as well as give you the motivation, drive and commitment to get your long term goals.
Looking for more advice on business planning? Discover our step-by-step guide on how to write your business plan here.
4. Keep costs low
One of the biggest benefits of running a company from home is that you can keep your overheads relatively low. There’s no extra office space to rent or extra utilities to pay.
For some people, the temptation might be to then go crazy on expensive equipment or fancy decorations for your space. And while it might be beneficial to have a nice space, it’s not ideal to go cash crazy.
Instead, keep your costs low and invest in the essentials rather than lavish toys. There’ll be plenty of time for treating yourself later, but right now your business is the number one priority.
5. Don’t neglect your marketing
Marketing is how businesses get noticed and what makes customers buy from them. Running a business without marketing is like owning a shop, but barring all the doors, so people can’t enter.
If your business is based at your home, there’s not much networking opportunity that you’re getting to grow. But the right marketing enables you to establish more efficient two-way communication with your current and future customers (Ritz et al., 2019). These make your marketing even more important than ever.
But when you’re busy focusing on the daily ins-outs and goals of your business, marketing can fall under the radar.
But before you panic, marketing doesn’t need to be a hard, full-time job. There are many low-cost or free tactics that you can take advantage of to promote your company. And at Business4Beginners, we’re here to tell you all about them with the hottest advice so you can start using them to your advantage. This includes:
- Creating a great website with these 17 design tips
- Building email lists and increasing sales through these 11 small business email tips
- Driving a profit through these 7 PPC tactics
- Making your website rank higher on search engines with these 7 affordable SEO tips
- Getting your business noticed online through social media marketing
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6. Make a schedule and stick to it
Flexibility is a great part of running your own business. And operating a business from home gives you the flexibility to fit your work life around home commitments, especially useful if you have kids.
Our earlier tip was about making sure that you have clear distinctions between your work and home life, so you can easily ‘leave’ one area and enter the other. It’s great for that work/home life balance.
One danger of working from home is that your home life can take over. It’s easy to think, ‘I’ll get to that later’ and procrastinate by sticking another load of laundry on, doing the dishes, mowing the lawn… etc. To help get that balance right, a top tip for working at home is to set yourself fixed hours that are dedicated to work. This also helps provide consistency for you and your family and helps you get into a routine and rhythm balancing work and home.
7. Put effort into your office decor
Looks matter. Having an office that looks professional not only helps put you in the right frame of mind for work, but will also be an asset if you have to carry out any video calls with clients, investors or potential customers.
If you need to meet people face to face, you might also want to consider hiring a meeting room or arranging visits at local coffee shops, rather than taking clients through your home. It looks more professional – and can seem like a nice gesture if you pick places that are local and convenient to them.
Plus, having clients over to your home could make you liable to pay business rates – so make sure that you double-check that before inviting people to your home.
8. Dress for work
Working from home means that you could, theoretically, do all your work from the comfort of your dressing gown and your cosiest slippers. But just because you can, doesn’t mean that you should.
How you dress can be another big element in separating your work and home life balance. For some people, the act of getting up and dressed in the morning tells your brain that you’re awake and ready for work. Staying in your pyjamas tells your brain that you’re ready to relax, making it harder to become motivated.
That doesn’t mean you need to wear a three-piece suit at home (unless you want to!). But having a ‘working wardrobe’ can help get your body ready for work, and also make you look more professional if you do have to make any video calls. P.S. nothing is stopping you from adding those cosy slippers to your working wardrobe.
9. Don’t become a prisoner to solitude
If you’re used to working in an office or around others, working from home can be a lonely experience—especially if you live alone. We aren’t supposed to exist in solitude, so make sure you interact with others when possible. This might include getting out to work at a local coffee shop or coworking space, visiting trade shows, or doing industry events to build network connections, etc.
If you need to get out and talk to someone, get out and talk to someone.
10. Invest in comfort
Working at home is a way to keep costs low, but it doesn’t mean you should put yourself in physical discomfort trying to work from an old, rickety kitchen chair for 8 hours a day. If you have the space and the budget, make sure that you set up your home office with ergonomic furniture that will be comfortable to work from and protect your back.
In addition, you also want to look at the lights you have in the space. Working in dark, low-lit spaces causes a lot of strain on your eyes. So, get some bright light with natural tones, or set up somewhere next to a window to try and get as much natural light as possible.
11. Keep going
Running a business is hard work. But running a business from home requires that extra dedication, concentration and determination to get things off the ground.
Whatever you do, be proud of all that you’ve achieved so far and keep treading the same path. This hard work will pay off.
12. Make sure you have relevant insurances in place
It’s only a legal obligation to have business insurance if your business enters into contracts that require it, such as public liability insurance or cyber and data insurance.
You can find out more about business insurance you may need as a sole trader here.
However, we’d recommend that you’ll always get insurance if you run your business from home. Insurance protects you in case the worst should happen, gives you that peace of mind and can also help you win client contracts.
And if your business operates from your home, it’s worth remembering that your normal home and contents insurance won’t cover any business losses. So you’ll need to add your business to your current policy or take out new insurance that provides the right level of cover for you.
There are many different types of insurance, but you might be interested in taking out:
1. Public liability insurance
It covers any claims against your business if it causes an injury or property damage. This is especially useful for those that work in trade.
2. Personal indemnity insurance
This one covers you in the event that your advice or service fails to work for a client.
3. Personal accident insurance
It protects your income in case you have an accident that prevents you from working.
4. Building and contents insurance
It protects your home and equipment from damage or theft. Remember, ordinary residential home and contents insurance won’t cover your business – you’ll need to change or take out a new policy to help cover you while working for your business from home.
5. Tool and equipment cover
This one specifically protects the equipment and tools that you need to do your job. This can be anything from a computer to automatic drills.
It’s worth noting that if you do any driving or travelling for your business, you’ll also need to make sure your car insurance covers business use as well as domestic travel.
13. Don’t forget to take advantage of relevant tax reliefs
If you work from home, you can take a proportion of your home running costs into your allowable business expenses. This means you’ll reduce your taxable profit when submitting your returns, lowering your tax bill.
The exact amount you’ll be able to claim depends on your business and the percentage of your home dedicated to business use. This can be calculated differently, including based on the number of rooms in your home. For example, if you live in a 4-bed house, with 1 bedroom dedicated to business use, you can claim a quarter of your household bills as expenses. This includes your:
- Heating and electricity bills
- Council Tax
- Mortgage interest or rent
- Internet and telephone use
Gov.UK has a simplified expenses tool that you can use to calculate how much you can claim as expenses. Otherwise, your accountant can help guide you in this area.
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14. Protect your privacy
In order to form your business and register as a limited company or LLP, you need a business address. While this could be your home address where you operate your business from, you might want to consider your privacy.
Your business address is where all your official communication will be sent and must be a physical location in the country that you’re registered in. For example, if you register in England, you need an English address. If you register in Scotland, you’ll need a Scottish address. You can find out more about business addresses here.
As well as sending you communication, this address will also be publicly available on the Companie’s House online register – which may cause some problems when running a business from home.
If you don’t want to use your home address, there are alternatives. If you employ other people, you can use the address of the person who managed your Corporation Tax (with permission, of course!).
However, the best and possibly the easiest solution to use is a company formation agent, who will provide an address for you to use and scan, forward and email all communication to you. Find the best company formation agents using our reviews, or get started with our top pick 1st Formations.
1st Formations offer a range of address services as part of an easy formation package, or as stand-alone services depending on your needs. You can read our full review of 1st Formation’s services here.
Click here to visit their website.
15. Check if you need to pay business rates
You don’t need to pay any business rates to run a business from home if you only use a small part of your home as a business, such as setting up a small office.
However, you will be liable to pay business rates as well as council tax if you:
- Sell goods or services to people who visit your property – i.e. if you have clients or customers come to your house
- Employ other people who work at your property
- Make significant changes to your home for your business, such as converting a garage to a hairdresser or a studio
- You have a part-domestic and part-business property, i.e., if you live on the second floor while the first floor is a shop
If you’re not sure if you should be paying business rates, you can contact the Valuation Office Agency (VOA) for more information. (In Scotland, contact your local assessor instead. If you’re based in Northern Ireland, contact Land & Property Services).
Need more help running your business?
We’re here for you at Business4Beginners with the latest news, tips, advice and ideas to get your business off the ground and flourishing.
Discover:
- Find answers to frequently asked questions about running a small business from home
- Accounting software, formation agency and website builder reviews to get a winning toolkit
- Legal advice and guides to keep your business above board
- Online business, marketing strategies and tips to get your business noticed
- Inspiration and ideas to ignite that creative spark and take your business to the next level
And much more. Until next time.
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