Planning

Benefits
Challenges

Why do you want to start your business from home?

It may be because you want to initiate a business idea from home in order to reduce your overheads and risk whilst testing your model. Or perhaps you have been working for an employer and now want to establish your own business from home to have greater lifestyle flexibility and to spend more time with your family.

It is up to you to decide whether your reasons are right for you. But remember, if the decision is a quick knee-jerk reaction to problems at work, it may require further thought.

Perhaps as a starting point in determining whether running a home-based business would suit you, consider the associated benefits and challenges involved.

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Benefits

Lower overheads
The home-based option offers lower establishment costs, namely the fact that you have no commercial lease. Travelling costs may also be reduced. If existing household furniture is utilised in the home office, overheads can be reduced even further.

Lower risk
Working from home can eliminate a lot of risk in the early stages of the business simply due to the lower overheads involved. In some cases, working from home can accommodate the incubation period of the business.

Flexibility
As your own boss, you have the ability to set your own hours, to work broken shifts, and to control your availability to customers and clients. In some fields, such flexibility can be a real advantage for your business. It can also make it easier to allow time for other personal tasks such as picking the children up from school etc.

Convenience
All the conveniences of home are right there while you work. You also no longer have to travel to work every day, though you still may have to travel (eg to deliver your service etc).

Profit
As a business owner, you will be able to retain your profits, essentially the return for the risk you are taking and a reward for your time, skills and hard work (does depend on the business structure). The profits will be forthcoming if your business is successful. This will provide your income and may be more than you would have ever earned on a wage/salary.

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Challenges

Isolation
Working at home can be very isolating, on both a personal and professional level. The interaction that tends to exist in other working environments usually does not readily exist in the home and can be difficult for some people. Those from corporate backgrounds, in particular, can face a significant adjustment. Would being alone for long periods of time hinder your drive to get the job done?

Distractions
People often get distracted whilst working, regardless of the environment, but consider all the extra distractions you must deal with if you run a business from home. The list includes the Internet, household chores, children, relatives, pets, visitors who think you have endless free time and even television.

Site Limitations
The ideal situation is to design your site/facilities to suit your business requirements. This is not always possible for businesses operating from home. The need to comply with local government regulations regarding parking, advertising, employment and manufacturing can be limiting factors.

Maintaining Some Balance in Your Life
The challenge is to maintain balance in two directions. On the one hand, you must be able to overcome the distractions from your domestic life during work time. However, you must also be careful not to let work completely dominate your family life, and to work such long hours that you actually become less productive.

Loss of Guaranteed Income Flow
Whilst being able to retain the profits is a definite advantage of running your own business, the downside is that it can often take time to build up a profitable business and cashflow can be erratic at the start. Will your business be able to generate sufficient earnings for you to live on? If you are not sure, would it be worthwhile to retain other employment or income options at least during the infant stages of your business? 

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