Many entrepreneurs dream of the flexibility that having one’s own business can provide. Working from home—all the time or occasionally—is often part of that dream. The reality is that it takes planning and realistic expectations to successfully work from home.
You need an adequate work area. A dedicated area—a spare bedroom—is ideal. Make sure there’s good light and space to store work supplies within reach.
Working from home is a family decision. It’s helpful to train children and pets to stay away if possible while work is in progress and to keep hands off work projects.
If you’re a freelancer, consultant, or engaged in other work that’s solitary and quiet, you probably have no concerns about town or city rules on operating a business from home. But if you have employees or your business entails noise or odors, check to see whether it’s legal to operate in a home office. If you live in a community or cooperative apartment, review your homeowner’s association rules on working from home.
To avoid isolation, make sure your work incorporates regular meetings, luncheons and appointments with people on the outside. Joining network local groups not only provides this type of outlet but can also help you market your business.
To deduct household expenses related to your business space as a business deduction, make sure to meet tax law requirements. Your home office must be your principal place of business or a place to meet customers and clients in the normal course of business. Also, the space must be used regularly and exclusively for business (a kitchen table or den used by family won’t do). The IRS (http://www.irs.gov/pub/irs-pdf/p587.pdf) provides details about the home office deduction.
Determine whether your homeowner’s policy provides adequate production for your business. You may need to expand your existing policy or obtain a separate business owner’s policy (BOP).