For some people, working from home is out of the question, because of manufacturing processes, storage space required, for instance, but for many it can be a good starting point. The types of business which are suitable for working from home are likely to be:
- Consultancy
- Teaching/training
- ‘Cottage’ industry (e.g. crafts, food)
- Professions (e.g. accountants, therapists, architects)
Sometimes a good business address is essential to your image; in this case an obviously residential address would be a handicap.
Customer and client access
If yours is the type of business where you go to your clients or customers – goods made at home and delivered or services rendered on other people’s premises perhaps – a home base could work quite well.
It is essential that your customers are able to get in touch with you quickly and easily, by phone, fax or email at times convenient to them. You also have to guard your own privacy, however, and make it clear that business is to be done in business hours, whatever those may be. For example, if your business hours exclude mornings, and you work afternoons, evenings and weekends, this must be made clear to your customers. Home hairdressing could be an example here.
If your business requires your customers to come to you, if only occasionally (consultants or accountants, for instance) it is very important to be able to receive them in a business-like atmosphere, with all the privacy they would expect from business premises. Parking should be convenient, if possible, and the entry to your home easy and pleasant. Being greeted by a doorbell which does not work, a barking dog and a noisy child is not a good introduction to a business atmosphere.
If you are doing business with customers in your home, a separate office or study is highly desirable.
Space
If your business is a cottage industry, you obviously need enough space in which to process what you are making. A shed or garage can sometimes be used. Remember that you will also need storage space for:
- equipment
- materials, including wrapping or packing materials
- tools
- items ready for delivery to customers
and good access for getting these things in and out of your home without causing annoyance to the rest of your household or your neighbours.
You will also need space for the office side of the business. Equipment such as fax machines, photocopiers and PCs takes up quite a bit of room, and is often difficult to move because of size or access to power points. A separate office is ideal, if possible. Remember that you will need a phone in the ‘office’ as well as where you are working.
If you are supplying a service, as opposed to a product, from your home, less space is needed, but you still need to be able to store paper, files, office machinery and so on. Take account of this, and try to keep your business space and your private space separate.
Routine
It is important to set yourself some sort of routine for working from home. You do not have the discipline of leaving for another place of work, and it is very easy to get sidetracked. Working from home means that you do not spend time travelling to work, but you have to be strict about the time you therefore save. If you decide to set this time aside for personal matters, that is your decision and one of the benefits of being self-employed and working from home.
It is easy to get distracted by:
- external noises (lawn mower, traffic)
- internal noises (animals, children, TV, radio) It is also easy to be interrupted by:
- callers (meter reader, delivery vans)
- visitors
- family and friends . personal phone calls
- domestic chores (cooking, cleaning, shopping, fetching children from school, etc.)
People tend to think that because you are at home you are not working. If you can establish a routine for your work it will help your own discipline and that of other people. You need to come to an agreement with other members of the household about who does what, when and where. If you have been used to working in an office or a factory, you will find it quite difficult to adapt to the routine of working at or from home, and you should make allowances for this adjustment period.
Overheads
You need to be clear, as soon as possible, what proportion of the overheads on your home you can claim for business purposes. You should be able to claim a proportion of your:
- lighting and heating
- telephone
- security
- cleaning
Reckon on being able to claim anything to do with the business, not with the house. If you start claiming for rates or water rates, you may be liable to Capital Gains Tax when you sell the house. The Council Tax should not be affected at all by the fact that you work from home.
Check with your accountant what proportion of household expenses can be deemed to be for business use and how this should be recorded in the books. For example, you should be able to claim VAT (if you are VAT registered) on your business telephone calls, and on a proportion of any telephone rental charges.
If you have cleaning help in the home some of this payment might be offset as a business expense, but take care that your cleaning person does not become an employee for personal tax or National Insurance (NI) purposes.
Other things you might be able to claim for are a guard dog, installing security devices, extra telephone points and secretarial services by other members of the household, but check with your accountant first.
You need to be sure, when setting up your business at home, that you are not altering the use of the property or part of it from residential to light industrial. Check with the local authority byelaws and a solicitor who is fully conversant with these.
