Start a business from home

If you’re thinking about starting up a business from home, you should to consider your start-up costs, how you’re going to set up your home office and what IT systems you need.

Guide

7 min read

1. Start a Business from home – Overview

Home-based businesses are a popular option for many types of smaller business. For entrepreneurs that start a business from home, generally the costs will be lower, travel expenses are avoided.

Advances in technology mean that many kinds of business can be run from a home base.

This guide will help you decide whether starting a business from home is right for you. It also suggests options you may want to consider when starting a home-based business.

2. Is starting a home-based business right for you?

Becoming a home business owner is a common choice for people who only need a small office. They may spend most of their time working on their clients' premises.

However, working from home may not be an option if it significantly changes the use of your home, or affects your local area, for example if you have lots of visitors. If you rent your home, your lease may include restrictions on using it for business purposes.

Advantages and disadvantages of home-based business

The major advantages are that you:

  • don't have to spend a lot of money on office rental or office purchase
  • save time and money by cutting your commute
  • can be flexible around the hours you work

The disadvantages are:

  • it may prove difficult to keep work and home-life separate, and there may be domestic distractions and interruptions
  • a lack of contact with other people and businesses
  • you might end up working long hours
  • your mortgage, home insurance and tax situation may be affected

Addressing the disadvantages

It's important to keep your home and work life separate, especially if you have a family.

If you're feeling isolated from other people, Business Gateway and other organisations can provide you with details of networking events. You can also network with other businesses using social media.

3. Popular home business ideas

If you do not yet have a home business idea, ask yourself three questions:

Is there a gap in the market? Have you tried to buy something that you just can't find? Others may be looking for that product too.

What is my passion/skill/hobby? Can you find a way of making a living from it?

Can I do something better? Have you seen someone offer a product or service that you think you can offer better yourself?

Popular home business ideas

Consider opportunities in your local area for services such as child care, tutoring, translation, editorial services, dog walking and alteration services.

Other common home-based businesses include:

  • consultants
  • website designers
  • arts and craft makers
  • publishers
  • caterers
  • virtual assistants who provide professional assistance to clients from a home office

You could also consider investing in a franchise. The benefits of being a franchisee are that you are your own boss but also have the benefit of working with a central team. There are a growing number of home-based franchise opportunities that you can explore.

Working 'five to nine'

You may want to consider starting a business while in full or part-time employment, using the evenings and weekends to build your business. This means that you will have money coming in while your business finds its feet. However, you might find it difficult to manage the extra hours and the extra work.

Your business plan

Once you have worked out a business idea, you need to create a written business plan.

4. Start-up costs and your work environment

You may need to buy, lease or rent equipment for your home office and any materials you need for the service you are supplying.

Finding and keeping in touch with customers can be a major issue, so investing in a good computer with relevant software and a broadband connection may well be a priority for you.

The most common costs to consider when starting out are:

  • a computer
  • broadband access
  • mobile phone
  • office desk or chair
  • business cards
  • stock - if you're supplying products

When you're factoring software packages into your start up costs, consider much cheaper or even free options - open-source software such as OpenOffice, Zoho, Google Docs and StarOffice.

Your work environment

It's important to create dedicated work space - it allows you to work without distraction and close the door on work at the end of the day.

Workspace priorities

You might consider marking the area you use for work. A spare room with a lockable door or an outbuilding are popular choices enabling home business owners to:

  • deal with clients in a professional manner
  • resist demands from other members of the household
  • keep work equipment separate from home equipment

Allocating part of your house as a workplace can have tax and insurance implications.

You can create a space to call your own by:

  • using office equipment in a general area of the house and putting it away when not in use
  • housing your workstation in a cupboard, wardrobe or under-stair space with lockable shutters or doors

Work equipment and workstation setup

When setting up your work area you may want to consider:

  • a fully adjustable chair and desk suited for computer use
  • that your desk should be big enough for your computer, keyboard and monitor
  • storage to keep office clutter free
  • keeping your feet flat on the floor and your back straight when sitting at your desk - the top of your monitor should be at eye level

A health and safety risk assessment will be required for your work space.

Home business and planning permission

If you're making substantial changes to your home to accommodate your business it may be prudent to get in touch with your local authority regarding planning permission.

5. Record keeping

Keeping good records helps you:

  • complete your tax returns easier and quicker
  • pay the right tax at the right time
  • avoid paying unnecessary interest and penalties

If you're using part of your home for business, it is important to keep your utility bills to keep track of the amount spent on your business.

6. IT and home business

If you're running a business from home, it's important to get the right IT systems.

Building a website

Websites are a must-have marketing tool for most businesses, and are particularly important when selling products online .

For more information on building a website, read our guide on web design.

Networking

Social media like Twitter and LinkedIn provide great opportunities to keep in touch with other business owners. This will alert you to business development opportunities and help develop your network with the wider business community.

Email and internet forums can help you network. You can blog on your own website or syndicate articles to other sites your customers are likely to visit.

Working away from home

IT doesn't just allow you to build a professional office at home - it enables you to work on the move. WiFi, smart phones and Skype means that you can work wherever you choose.

Cloud computing provides businesses with a way of managing data and software requirements over the internet - 'in the cloud'. This makes your business information accessible from any computer or mobile device with an internet connection and web browser. Cloud computing can provide a cost effective and flexible solution to your IT requirements.

7. Your growth options

There are many different opportunities that allow you to grow your home-based business.

Outsourcing

You can grow your business without increasing headcount or expanding your premises, by outsourcing, for example:

  • accounts
  • administration
  • telemarketing - for generating leads
  • PR
  • design and copywriting

Developing relationships

The more you communicate with customers, suppliers and other entrepreneurs, the more business opportunities you will identify.

Social media can help you stay in touch with your customers and other businesses.

Meeting spaces

As your business grows, your home may no longer suitable for your business needs. Business centres can provide rented managed workspace and meeting facilities for occasional. These can be found in central locations in many towns across the UK.

For more information on growing your business, read our guide on options for growth.

Get the support you need right now

You can connect with us through the contact form, call us or contact your local Business Gateway office

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