How to Run a Business From Home

Homebased business owner talking to client on the phone.
It wasn’t that long ago when running a small business from home suggested your business was either part-time or too small to warrant an office space. Now, working from home has become part of everyday conversation. There are many advantages to a home-based business including more flexibility in your work schedule, decreased overhead costs and a lower overall financial risk.

Usual Business Rules Apply

Even if your business operates out of your spare bedroom, you still need to comply with necessary rules and regulations.

Jurisdictions have regulations on the types of business you can legally run from home. As you’d expect, depending on zoning, there may be restrictions around noise, signage, smell, machinery and parking. Contact your local council to discuss your plans or visit their website to get information on what businesses are allowed in residential areas.

Depending on your industry you may be responsible for meeting environmental requirements like waste and recycling. Make sure you’re adequately set up to manage those responsibilities.

It’s also your responsibility to develop policies on managing health and safety and make sure any staff you hire understand these policies. This may include providing safe equipment so they can work, enabling ergonomic workstations, and having a communication plan in case of an emergency.

If you’re renting, the owner may have their own rules about operating a business from home. Make sure you speak to whoever owns the building and review your contract to make sure you’re not in violation of your rental agreement.

You may decide to eventually rent office space or finance other real estate for your business. SouthState can help you when the time comes.

Tracking Expenses

Work with a tax expert to determine what you can write off as a home business tax deduction.

You may be able to claim some of your home costs as an expense. However, there must be a connection between the use of the home and the income generated. The portion you can claim is usually related to the square footage of the area you use.

Get professional advice from your accountant or financial adviser, and research tax information from the IRS for additional guidance.
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Get professional advice from your accountant or financial adviser, and research tax information from the IRS for additional guidance.

Adjust Insurance

Household insurance doesn’t automatically cover your workspace or assets as most home insurance is for personal use, not business use. Personal home and business policies often have different limits, coverage, and different ways of settling your claim. Research to determine which business insurance you’ll need when you work from home, including business assets (for you and employees working from home), liability, business interruption, life and disability insurance.

Being Productive

It can be challenging to be productive when you’re working from home and surrounded by distractions. Ideally, you can take a section of your home, such as a spare bedroom and turn it into an office. That way, when you’re in your office, people know not to disturb you.

While you’re at it, make sure your computer, desk, and chair are all set up ergonomically. If your workspace fits you, you’ll be much more productive, healthy and happy.
Other ways to be productive at home include:
  • Good time management practices - with fewer boundaries between work and personal life, it can be hard to stop at the end of a workday; 
  • Communicating regularly with staff - employ scheduled daily/weekly calls on Zoom or Teams where clients or staff meet to ask questions and communicate; 
  • Keeping in close contact with customers, including getting out and about as much as you can; 
  • Set aside a specific time for meetings so all staff can check in and report on what they’ve worked on that week; 
  • Enable a messaging system like Slack or Teams where employees can reach out with their questions any time; and 
  • Stay healthy with regular exercise and good eating.
Working from home can feel incredibly isolating without the watercooler and lunch breaks with colleagues. Make sure you join groups such as industry associations, chambers of commerce or other small business groups in your area and attend their networking events.

Learn more about growing your small business.

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