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For many entrepreneurs, a home based business is the dream. Certainly, there are many benefits to running a business out of the same place you live. However, it can also be the source of all sorts of issues. Both professional and personal problems can easily come up without careful planning and consideration. Read these entrepreneur do’s and don’ts for a home based business to avoid hassles and make everything run smoother.
Benefits of a home based business
First of all, there are many benefits of a home based business. All these reasons fall into two categories – time, and money. And this is significant, because both time and money are valuable resources. So managing them effectively and efficiently is worthwhile. Therefore, choosing to run a business from home may be the ideal choice for many entrepreneurs.
Benefits of a home based business: Time
Benefits of a home based business: Money
Blending business with raising a family
When my business was still home-based, I had my second baby. She was born upstairs from my work space on a Sunday afternoon. The next morning, I was back at my desk. And holding my newborn while making client calls. Blending business with raising a family worked at the time. However, it was very challenging, and blurred all boundaries between work and life.
Entrepreneur Dos for a Home Based Business
1. DO check local bylaws and legislation regarding home offices
Every jurisdiction has different laws about a home based business. Be sure to follow rules about signage and parking to avoid fines and hassle from neighbours and authorities.
2. DO schedule regular working hours
First of all, this gives more structure and routine to your business day. Also, make your hours clear to customers, suppliers, and employees. Just because your office is in your home doesn’t mean you’ll be answering business emails at 11pm. Besides, that isn’t scalable. Though it may be possible when you are just starting out, and customers may be thrilled with your 24/7 responsiveness – it may be impossible to keep up in a year or two when the company is bigger.
3. DO establish expectations with family and friends
For example, just because your business is in your home doesn’t mean you are available to host a lunch or babysit a nephew at the last minute. Be sure your loved ones understand what your working hours are. And ask that they respect the importance of having dedicated blocks of time to focus on running your business.
4. DO set up a secure space for your home business
Especially if your business has any inventory or stock. Ideally, your work area can be locked and separate from the living areas of the home. Also, install an alarm system and cameras to monitor things when you are not there.
5. DO follow data protection and privacy protocols
Entrepreneur Don’ts for a Home Based Business
1. DON'T multitask life and work
Quite simply, don’t try to multitask personal life stuff with running your home based business. This is a tough one, because it is very tempting to do when your life and your company share space. Full confession – in the early days of building my franchise system, when it was still a home based business, I did this. Alot. So I know from personal experience that blending life and business all day just results in feeling there has been no quality time for either. Besides, we now know from studies that multitasking is not effective because it drains neurological resources.
2. DON'T overlook setting up a proper business structure
Just because it’s a home based business doesn’t mean it shouldn’t be registered and official. In the UK, setting up a business is easy with 1st Formations, and the team can guide you on what is best for your situation.
3. DON'T forget about insurance
Don’t neglect to update home and business insurance policies. Insurance companies just love a loophole to get out of paying a claim. Therefore, talk to your agent about your home business set up and be sure that you are covered in case of a flood, fire, or other unfortunate event.
4. DON'T mix personal and business finances
Regardless of the business structure, all company money should flow in and out of its own bank account. Because keeping money separate makes it easier to track revenue, calculate profits, and report taxes. Specifically, this can mean doing two payments at the cash register. For example, when buying printer ink and other office needs, you also pick up art supplies for your kids. When paying, check these out separately, using your business bank card and then your personal bank card. Partly, this step saves time on bookkeeping. But also, because in case of an audit, seeing a receipt for crayons and Spiderman posted through your business bank account is going to cause a world of hassle.
5. DON'T miss out on tax benefits
There are many opportunities to reduce taxes and maximise profits with a home based business. Check with an accountant familiar with the rules in your country, state, or province. There may be all sorts of rules and allowances you can use to minimise taxable income for yourself and your business. From writing off business use of home, to gas mileage, it can all add up to more money in your pocket.
Entrepreneurship at home
As shown above, there are many entrepreneur do’s and don’ts for a home based business. Overall, entrepreneurship at home can be a challenge. Because it’s easy to mix up life and business, and have no clear structure and routine. However, for those who set up strong systems and boundaries for their home based business, they benefit from saving time and money.