Photo by Jenny Ueberberg on Unsplash
Many people dream of running their own businesses or becoming self-employed. In a lot of cases, when starting out, people use their own homes as their business premises. It makes sense, you’re already paying for it, so there’s no additional rental or mortgage to consider, plus the commute is really easy.
When you decide to run your business from home, there are some practical and financial considerations you need to take into account to make sure you’re taking advantage of working from home. These include:
Space
Do you have the space? If you need little more than a laptop and smartphone to run your business, then you don’t really need a lot of room. If you make or sell products, that might be a different matter. If you have a lot of space, then you’ll be able to hold stock at home, but if you don’t it’s not really feasible to have it cluttering up your home. Look into good quality cheap storage units that you can use to store stock safely near your home.
Insurance
As a self-employed person or small business, you’re going to need to make sure you have the correct insurance in place. If you don’t meet with clients, or do so away from your home, then a professional indemnity insurance plan should be sufficient for you. If you have people coming to your home for meetings or services, then you will need more comprehensive insurance in case they are injured while there. Many home insurance policies won’t cover you for business use.
Tax implications
When you start working from home, you may be able to take advantage of some tax breaks around this. It allows you to write off a proportion of your mortgage, rent, and utilities. The amount you can claim depends on many factors, which is what puts some people off, as they feel it’s too complicated. When you’re self-employed it’s important that you take advantage of every tax break you can.
Contact a tax specialist or an accountant who will be able to advise you on how to do this.
Increased bills
If you’re used to working in a traditional office job, with a commute and business dress, then being self-employed can save you a lot of money in terms of travel costs, clothes, food, etc. But when you’re calculating your budgets etc, remember that certain bills will increase too. For example, you’ll be at home more, using energy for heating, lighting, and your tech. So you can expect your energy bills to increase. You might also need a faster, more reliable internet connection and find you’re eating more from your usual groceries during the day.
Key points
Setting up your business from home is a great option for a lot of people but you do need to take some things into account when doing it. By making sure you’re taking care of your space needs as well as factoring in any financial costs or savings, you’re setting yourself up to work efficiently and cost-effectively.
Leave a Reply