Opening a Small Business
Is Home Based an Advantage?

ADVANTAGES OF A HOME BASED BUSINESS

Opening a small business from home is likely to be much less risky, because your start up costs can be much lower.

But it's definitely looking at the many ideas that are suitable for working from home.

If you have a day job and you're looking to make extra money part time, low overheads are a big plus point. You don't want to be renting an office if you only have a few hours a week available for your business.

Some people work from home because they have to stay at home during the day, maybe looking after kids, other family members or animals.

Or perhaps you live a long way from potential customers. Computers can help you reach customers anywhere in the world. You might be starting an internet based business, or you may be simply using a web site to advertise your services - such as copywriting.

DISADVANTAGES OF A HOME BASED BUSINESS

If your business grows and you want to take on employees, perhaps you won't have enough space at home. Depending on the service you offer, however, your empolyees might be able to work from their own homes.

Mess can be another issue. If you work in the family living space, or even in a spare bedroom, can you stop your paperwork and other work related stuff spilling out into the living room?

Also, can you manage your time so you stop working at a reasonable hour? Or will you be tempted to watch day time television? There is a danger of losing all sense of division between home life and your money making activites. Also, if you run the type of business where you sit in front of your computer all day, will you ever get out to meet other people?

There used to be something of an image issue with opening a small business from home. For example, if you are a bookkeeper, it was probably seen as more professional if you had an office in town. However, as more and more people start to work from home, I think this is much less of an issue nowadays.

In my view, it makes sense to consider the homebased option.

Many small businesses fail to survive the early years because they do not generate sufficient sales to cover their costs and make sufficient profit.

Cash flow is also a common problem in the early months after opening a small business.

If you can keep your costs to a minimum by starting up from home, you will probably lower your risk.

You can always choose to expand into a commercial office in town later on if you're making plenty of money.