Operating a home-based business can result in reduced stress and lower expenses. By combining your home and office into a single location, you can roll out of bed, make breakfast and a cup of coffee, and then walk across the hall to your office to get on with the day – no more commuting to and from work. If you have a family, a home-based business can mean more time with your kids and significant other. In addition to lower stress and more family time, a home-based business can also provide a financial benefit. By combining your home and your office, you’re eliminating the additional cost of leasing office space. Despite the many benefits, home-based businesses aren’t for everyone. For those who believe they will benefit from a home-based business, this post will provide an overview of what you need to know.
What is a home-based business?
A home-based business is any business in whichthe primary office is located in the owner’s home, regardless of whether the owner owns or rents the home. For many startups and family businesses, the home-based business model is ideal.
Who can have a home-based business?
Anyone! Home-based businesses aren’t just for startups and family businesses – they’re for everyone who earns money from their own enterprise. Some examples of professionals ideally suited for a home-based business are photographers, freelance journalists, travel agents, real estate agents, graphic designers, and any other profession where you are the owner of the enterprise.
However, some municipalities and neighborhoods have restrictions against home-based businesses. Similarly, some leases prevent the leased residence from being used as a home-office. Before jumping into a home-based business, make sure to consult a knowledgeable attorney to determine whether your plans would violate applicable law.
What are the benefits of having a home-based business?
As identified above, a home-based business can reduce stress and alleviate financial expenditure. By essentially eliminating your commute, you can free up extra time during the day for other activities. Many professionals face commute times in excess of 30 minutes each way. By eliminating that commute, you can get back an hour each day to exercise, read, relax, and spend time with your family. Similarly, by merging your home and work, you’re able to reduce the amount you spend as you no longer have to pay for office space outside of your home.
Another benefit of a home-based business that attracts many professionals is the tax advantage. By utilizing a home-based business, you can deduct a portion of your home’s expenses, such as mortgage interest, utilities, repairs and maintenance, and property taxes, against your business income. By utilizing this deduction, you can significantly reduce your taxable income which can result in thousands in tax savings.
What are the concerns with a home-based business?
As identified above, a home-based business can cause issues depending on local laws and any applicable leases. However, the issue that most business owners struggle with is the isolation of always being at home, or the commingling of home life and work life causing unexpected stress.
If you’re interested in operating a home-based business, it’s essential to speak with an experienced business attorney to help guide you through the process.