The always insightful Michael Hess recently wrote a great article, 6 Ways to Make Your Small Business Look Bigger, but I respectfully disagree with his take on a home office: "Unless your business is designed to be run from home," he says, "get yourself an office of some kind as soon as you can justify and afford it."
I think that approach is wrong. Of course if you meet with a number of clients a home office may not work, for business and family reasons, but in a number of industries technology makes meeting clients in your office less necessary.
Plus, the words "home office" don't carry the same negative connotation they once did.
Let's break down the home office debate into personal and business considerations:
The Business Case
- A home office is much cheaper. For start-up or established business, paying rent, utilities, and other costs for an outside office create a significant monthly revenue threshold. Plus, while tax guidelines are fairly strict, you can deduct some portion of expenses you would have paid personally, prorating utilities, some maintenance, and even depreciating the portion of your home you use for a home office. (Keep in mind taking depreciation can make accounting and tax considerations a little more complicated when you sell your home, so look before you take the depreciation leap.)
- Increased (and convenient) availability. I have clients around the world, so I often adjust my schedule to their time zones. With a home office I don't mind phone calls during non-office hours since walking down two flights of stairs beats driving to an external office every time.
- Show never equals go. A fancy space at a prestigious address may initially impress potential clients, but eventually you are judged on the quality of your products or services. If you do great work no one cares where your office is located.
- Your home office can be a home-court advantage. An outside office is to a home office what an apartment is to owning a home. If you rent or lease you're limited in the changes you can make to the space, and when your lease is up those improvements are often lost. With a home office you call the shots and the money you save on rent can go to improvements. My home office is about 1,300 square feet, has a great view of the mountains, and the office dog can hang out with me. I hate to think how much a similar commercial space would cost.
- A home office is like an entrepreneurial litmus test. Many people feel they will lack self discipline and focus if they work from home. Sure, you may feel you need the motivation (and validation) that comes from having an outside office... but when your paycheck is based solely on your output motivation shouldn't be a problem. If it is, owning your own business probably doesn't make sense.
- Adds value to your home. Turning your dining room into a home office could negatively impact the value of your home, but if you re-purpose unused space, or better yet add on, you benefit personally. Plus home offices are very popular with home buyers. A local real estate agent told me at least 2/3 of her prospective home buyers list a home office as a "must have," even if only for personal use.
- It's greener. No commute = fewer emissions.
- A home office creates more family time. One person left this comment on Michael's article: "I just didn't have the heart to turn away my 3-year-old daughter who was excited to have daddy at home all the time." I understand the feeling, but think about it: Home office or external office, you're not available. The only difference is you don't have to face the fact your daughter misses you when you work from an external office; either way, she misses you. On the other hand, time spent commuting is family time lost. If your one-way commute is twenty minutes, that's at least 160 potential family hours gone -- forever.
Photo courtesy flickr user ReneS, CC 2.0