ComplianceAugust 19, 2020

Should you run a business from home?

If you're thinking of running a home business, you have a special set of issues to consider, along with all the usual issues that must be faced by anyone who is starting and running their own business.

The decision to run your own business often results in a blurring of the line between your personal and work lives. Add the decision to run that business from your home to the mix, and the impact on that line is even more pronounced. Aside from the actual physical issues, even if you carefully separate the business areas of your home from the residential portions, the existence of the home business can create conflicts that you wouldn't face in a workplace located away from your home. Of course, for every disadvantage of working from home there is an advantage. Therefore, there are several factors you'll need to consider in the very early phases of planning your business. First and foremost among these issues is the practical one of whether the type of business you want to run is suited to a home workplace.

Can your business thrive at home?

When you're thinking of starting a business that you can run out of your home, first consider the nature of the business you want to open. The following are things to take into account when thinking about what type of businesses lend themselves to being run out of the home:

  • Does the business require a lot of customer or client visits to your home? For example, tax return preparation or music lessons? Are there ways around this problem? For instance, could you visit the client's location instead?
  • Does the business require a lot of space for such purposes as inventory storage, order processing, or performing services. For example, auto repair?
  • Does the business produce undesirable side effects such as noise, air pollution, foul odors, or excessive or toxic waste?

If this is the case, zoning rules could be used to put you out of business or prevent you from starting your business at all.

Conversely, some businesses are particularly well-suited for being run from the home:

  • businesses customarily run in an office setting, such as website design, bookkeeping and accounting, graphic design, and computer programming
  • service businesses, such as house cleaning, construction, or home repair work (concrete, carpentry, plumbing, etc.), particularly where you do the major part of the work at the customer's location
  • daycare businesses

Making adjustments so that your business fits the home setting.

Don't be easily disillusioned — with some adjustments, almost any business can be successfully run out of the home. We suggest you take into account your personal situation.


Suppose you're thinking about tutoring students in your home. Does your home have an entrance that is less noticeable to neighbors (perhaps an entrance in the back or on the side of the house) that students can use? Are you tutoring a "quiet" subject such as statistics? Are most of your students younger so that they are being dropped off and do not have cars to park all over your neighborhood? In that case, running a tutoring business from your home may be quite feasible.

Matching up what you want to do at home with what you can do at home.

If you want to work at home, a good approach is to match up your skills and interests with a business need. Then ask yourself if that business need can be met through work done from a home workplace. After all, don't lose sight of the fact that running your own business from home should be satisfying as well as profitable!

If you think you can run your business from your home, the next step is dealing with the people who factor significantly in both your professional and personal life--customers, clients, suppliers, neighbors, family and friends.

Dealing with business and personal contacts when you work at home

Working out of your home can lack the built-in assumption that people make that you're a serious businessperson during working hours. However, for your business to be a success, you and your business must be able to project just this very image. There are various steps you can take to make sure that you and your business are taken seriously not only by clients, customers, suppliers and other business people, but by friends, family and neighbors as well.

Keep the following points in mind when working with business contacts:

  • Dress appropriately. Dress in a manner conducive to doing business in your chosen field whenever you think you might be meeting with customers, clients, and suppliers. This is quite subjective, depending on your line of work. If your business involves frequent or unexpected visits from members of these groups, you may have to dress this way all of the time.
  • Maintain a professional workspace. When setting up your work area, make sure that customers, clients, and suppliers see a professional workspace, rather than someone's living area. You may want to have a separate entrance or even a separate structure for your business, if possible.
  • Answer your phone in a professional manner. If your home and business phone line are one and the same, you don't necessarily have to answer with your business name; a dignified "hello" is sufficient. The same principle applies to your answering machine message (or lack of one). If you can't answer your phone personally, you don't want potential customers, clients, or suppliers hanging up because they think they have the wrong number or because they're turned off by your message.

Creating boundaries for neighbors, friends, and family

When you run a business out of your home, the issue of dealing with your neighbors, your friends, and your family comes to mind almost immediately. 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!

What can you do to create these boundaries? Mentally separating "home" from "business" is the first step you should take. A part of setting up these boundaries is deciding how to deal with interruptions from neighbors, friends, and family while you are working at home. Another issue you may confront when you work at home is neighbors, friends, and family asking for business-related favors. It's important to be ready with a plan to confront these issues when they occur if you want you and your home business to be taken seriously and to succeed.

Dealing with interruptions.

As a person who works at home, you will be faced with an issue that people who work in a traditional business setting are not. When you work at home, you have the task of conveying to those closest to you, your family, friends, and neighbors, that when you are at home and working, this is your place of business. People who would never dream of just barging into your workplace in a traditional business setting may see things differently when you work at home. They may see the fact that you're working at home as an opportunity to ask you to do errands, baby-sit, call you, or stop by just to chat. In other words, if you're at home, you're not really working, at least in their mind.

Because the clear distinction between home and workplace does not exist when you work at home, you must create the distinction. How can you get neighbors, family, and friends to take you seriously when you tell them you're working and can't be disturbed?

When people try to interrupt you while you're working, whether it's in person or on the telephone, tactfully let them know that you can't be disturbed because you're working on something (tell them generally what it is), you're on a business call, you're with an employee, or you're in a meeting. Then let them know when you will be available and make sure it's outside your regular business hours. It may take some time, but your neighbors, friends, and family will learn to take your home business as seriously as you do!

Handling requests for business favors.

When you work at home, you may find that neighbors, friends, and family feel free to ask you for discounts on your services and products or for free advice and merchandise. While someone close to you might not think of making this kind of request if you worked in a retail store or for a corporation, that same person feels that it's perfectly acceptable because your business is run from your home. How can you handle these requests without alienating those around you?

It doesn't hurt to remind those close to you that your livelihood (and in the case of your family, theirs as well!) depends on the success of your home business. The fact that your business is in your home doesn't make it any less of a business. Explain that if you give away a product or a service that you want others to pay for, you won't stay in business for very long.

Despite your best efforts, distractions are inevitable and you must be prepared to deal with them if you want to run a successful business out of your home. There are ways to handle people and events so they are minimally invasive or can even be a positive experience.

Controlling work at home distractions

Despite all plans to the contrary, distractions are inevitable in traditional work settings and even more so when you work at home. Having a plan in place will help make it possible for you to productively run your business out of your home.

One way to deal with the inevitable distractions is to take advantage of your power to control your schedule and fit work interruptions into your schedule where you can.

Hours that make up the workday

Setting your own work schedule is often one of the best perks of running your own business, especially from home. Of course, when you choose which hours to work you should take the following into account:

  • If contacting customers and suppliers is an important part of your business, you will want to set your work schedule according to their availability.
  • When you start out in business, you may want to hold to the traditional business hours of your locale, or to the hours of your type of business. After you have been in operation for a while, you may get a feel for whether you could better serve customers and perhaps even get an advantage over your competitors by adjusting your work schedule.

You have much more freedom to choose your business hours if you don't speak directly with customers or suppliers. Use that power to structure your day in the most productive way possible.


Jordana starts work in her home office each day at 9:30 a.m. Every day, her neighborhood friends finish their morning workouts and stop by to chat at around 11:30 a.m. Jordana usually has a brief conversation with them. She welcomes the break and the socializing but Jordana finds it hard to get right back to work after this daily interruption. To avoid this problem, Jordana decides to take a break every day at 11:30. She's been at work for two hours at that point and can have something to eat or chat for a bit longer with her friends without feeling rushed. By fitting what might otherwise be an interruption into her workday schedule as a conscious decision to take a break, Jordana finds she doesn't feel her work is disrupted. In addition, knowing she has a break coming up makes it easier for Jordana to stay focused on her work until that time.

Keeping nontraditional hours are a perfect fit for a business run from your home. If you work best in the wee hours of the morning, do it! Being your own boss was probably one of the reasons that you went into business for yourself. You should take advantage of this freedom when you can — you'll feel better about what you're doing and be more productive.

Finding the best spot for your work area

You can also stay focused on your work at home if you make every effort to set up a work area away from distractions. Stay away from the kitchen (unless your workplace is the kitchen!), away from rooms in your home where the television or radio are on in the background, away from areas where you are bothered by street and traffic noise, etc.

Recognize your tolerance for distractions.

Your tolerance for distractions is a highly individual matter. While some people can write an entire novel with a television blaring in the background, others need total silence to compose a sentence. Here's an exercise we suggest. If you find yourself unable to focus on your work, take note of what exactly it is that distracted you. Was it a car alarm? The phone ringing in your bedroom? A neighbor's dog barking? The doorbell? Can any of the distractions be eliminated or minimized in the future? Once you determine what's necessary to keep you focused on your work when you're working at home, you'll be on your way to productivity!

Work smart

It's important that you are honest with yourself about your tolerance for distractions. Even with a completely separate workspace some people find it almost impossible to work from home effectively. Make sure you are a good candidate for running a business from home!

Even for the most diligent, staying focused when you work at home can be challenging. There are several things you can do to be as productive as possible by concentrating on work when necessary, yet avoiding isolation and maintaining a healthy lifestyle.

Avoiding isolation and staying focused and healthy

While working at home can provide you with a freedom from structure not possible in a traditional work setting, it can also result in loneliness and lack of concentration. However, if you make a conscious effort, these common pitfalls of working at home can be overcome. When you work from home, it's your responsibility to figure out what you need to run your business at its best and then take active steps to achieve those goals!

Keeping your mind on business

In the home workplace, focusing on work can be difficult because of everything from obligations such as chores to guilty pleasures such as watching television or going to the beach on a beautiful, sunny day. It's very tempting to "just take a bit of time to ....." After all, there's no boss to answer to!

So how do you stay focused and get your work done when you work at home? We have a few suggestions.

  • Set routines. Some home business operators find it useful to set routines to get them on task immediately. For example, upon entering the work area, you could close the door — if there is one — as a mental cue to begin work.
  • Dress for work. If you're not meeting with clients, customers, or other businesspersons, you can work in sweats if you like. However, you may feel more mentally "at work" if you make the effort to shower and dress in a business casual manner. Do what you need to do.
  • List your goals. It's also a good idea to have a list of goals (or at least one task) to attack as soon as you enter the work area. To do this, you'll need to have targeted this task at the end of your previous work day. But if you do this, take care that you set realistic tasks. Nothing is quite so demotivating as starting the day on the "down note" of not accomplishing your first goal for the day. Some people find it helpful if, at the end of the day, they add a couple of things they did do that day, that were not on the original list!

Avoiding isolation

When you're working at home, it's easy to feel isolated. In a traditional work environment, you work and network with co-workers, you might commute back and forth to work with co-workers, and you might socialize with your co-workers at work or after hours. Working at home, especially if you don't have employees or co-workers, can be lonely.

There are steps you can take to avoid feeling isolated and to make and maintain new business contacts:

  • Join professional groups such as industry organizations or associations.
  • Join professional groups for people working at home or people in small business.
  • Take classes in areas that are pertinent to your business and interest you.
  • Participate in and plan events that involve people in the business community.

Keep an eye open for business contacts and interaction wherever you are. Don't overlook the health club, the supermarket, the bookstore, or a social gathering as places where those with interests similar to yours will be found.

Maintaining a healthy lifestyle

Working at home will make changes in most people's lifestyles. For example, a person that walked 20 minutes each day to and from work now just has to walk across a room to be "at work." A person that played on the company softball and basketball teams now doesn't engage in any organized sport.

Work smart

Your first inclination may be to say that a person who works from home doesn't have time for sports or an exercise program. Nothing could be further from the truth! While it's understandable that you'll want to spend as much time as possible making your home business a success, you can't afford not to make time for physical fitness. Keeping fit helps keep you mentally alert, it gives you more stamina, and, if your sports activity involves others on a team or at a health club, it provides relief from the isolation you may experience working at home.

Here are some suggestions for getting physical exercise when you work at home:

  • Join a health club with time and money saved from commuting.
  • Organize or join a local sports team.
  • Take up a sport you can do on your own, such as running, walking, or working with weights.
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