Business Startup Planning

Learn more about planning a business launch.

Setting Up the Home Office

The area of your home where you operate your business--your workplace--will have an impact on the success of your business venture. To make sure that this impact is positive, organize it so that it becomes an efficient tool of your business. Your workplace should encourage productivity when you deal with customers or clients, suppliers, family, friends and neighbors, and yourself!

Defining your work area. The two main goals in creating a work space are functionality and low cost. Your home office work area should allow you to perform all necessary duties of your business without unduly disrupting the functioning of the rest of your household, and should do so at a cost that doesn't put your new business too deeply in the hole.

Most people working out of their homes find it helpful to have the work area somewhat isolated from the "personal" areas of the home, particularly if clients and customers will be coming into the work area. If feasible, a separate entrance (or even a detached building on your property) for the work area might be best. A traditional work setting contains natural boundaries for the people in your personal life. However, when you work at home, you will need to create these boundaries so that your business, as well as your personal life, can run smoothly and successfully.

Watch the cost! Possibly you have decided where to put your work area, and are thinking that physical changes should be made to enhance its efficiency (new walls, wood paneling, soundproofing, carpeting, etc.).

All of these may be good ideas--and possibly some or all of these changes should be made--but the question is, when? If you are just starting your home business, economy and efficiency should be your watchwords.

You can always upgrade your work area when the profits roll in. You might even include your desire for a better work area as a business goal: "When my weekly sales reach $X, then I'll carpet the office." If you are able to qualify, Uncle Sam may partially subsidize your home office in the form of income tax write-offs.

Equipping your home office. In planning your home office, keep in mind that some people have the preconceived notion that home businesses are not as committed or as efficient as other businesses. So, if you bring customers or other people into your home work area, you should consider whether your desk, furnishings and other equipment convey the right impression.

Although these items usually don't have to be expensive or elegant, they may detract from your business image if they are battered or appear unbusinesslike. Your office equipment should convey the impression that you are serious (but not stodgy!) about your business, and that you are able and willing to provide your customers with superior products or services.

Home office safety. Your business visitors may not think to look for hazards that are a part of the home, but are not usually encountered in the workplace. If possible, try to keep your visitors out of the personal areas of the house where the belongings of family members may create hazards (such as the skateboard at the bottom of the steps). Likewise, aggressive dogs or other animals should be kept away from visitors.

Regardless of how hard you try to keep your business area safe for visitors, you should always have adequate liability insurance.

Zoning restrictions. You may think that your home is your castle, but the government will beg to differ with you! Zoning rules are often used by local governments to bar or limit the types of businesses that can be operated in a residence.

The main rationale behind these prohibitive or restrictive zoning laws is to maintain the residential character of a neighborhood. On the flip side, it is often illegal to live in some commercially zoned areas where you are running a business.

Some localities restrict the right of property owners to build separate structures. There may also be restrictions on how much of your home can be used exclusively for your home office or business. For example, in Chicago you may not use more than 10% of the home exclusively for business. Local zoning laws can limit the number of employees you are allowed to have, or may not allow you to have any employees working in your home (other than domestics).

Getting zoning information. Every public library should contain a copy of the local ordinances, including zoning rules. You can pore over these at your leisure, without alerting any government officials about your plans for a home-based business.

Perhaps an easier, although less anonymous, way to get zoning information is to contact your local planning department or zoning board. These are usually accessible through your county offices if you live outside city limits or through city hall if you live within city limits. Also, if you live in an apartment building, we suggest you contact the manager or board responsible for setting up rules for activities in the building, and make sure your lease doesn't prohibit home businesses.

If you live in a condominium or co-op, check the lease or ownership agreement to find out if running a business out of your home is prohibited. Similarly, if your neighborhood has a homeowner's association, check its policy on businesses run out of the home.

Permits and licenses. Depending on your local laws, you may need a home-occupation permit or a business license to have a home office or business. The cost is usually a flat fee or a percentage of your annual receipts.

Category : Planning
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