Running a business from home -The good and the badFor a lot of people, the idea of running a business from home sounds ideal and it seems to have a lot of perks. After all, the idea of all that flexibility can be very appealing. However, although there are a number of positives to a home business, like anything there is also a downside.
Today, we’ll be taking a closer look at the pros and cons of the home business.
The pros of a home business
Saves you money – A big bonus of running your business from home is that it saves you money. You don’t need to rent an office and pay for the associated utilities and you also save money as you don’t need to commute to and from work. This can mean more cash flow into your business which is especially important in the early days.
Tax benefits – Because you use your home for work-related purposes, this can mean some great tax deductions at the end of financial year. You can claim a portion of the utilities used in your home office area, phone usage for work related purposes, a decline in value for more expensive items such as computers, and occupancy expenses. You can visit the ATO website for more information about tax deductions for home business.
Flexibility – One of the most attractive benefits of a home business is the flexibility it allows. If you have your laptop with you, you can run your business while away on holiday and are flexible enough to work around other commitments such as children.
The cons of a home business
Personal life gets in the way of business – A common issue for people running home businesses is trying to separate their business from their personal life. When friends and family know you work from home, it’s all too easy for them to suggest catch ups or pop over while you’re meant to be working. On the other hand, you could find yourself working in the evenings and doing very long hours seeing as all your business equipment is at home.
More discipline is required – When you work in an office environment, although there are some breaks in the day, the expectation is that you’ll spend your time working. With the flexibility that comes from running a home business with no one monitoring you, you need to be disciplined to make sure you’re getting your work done. If you’re not disciplined, it’s easy to get to the end of the day and realise you’ve achieved very little.
Lack of professional space – Depending on the type of work you do, some clients may not appreciate having to come to your house for meetings or to view products. No matter how clean your house is, it’s simply not as professional an office setting and this can be off-putting to some people.
As you can see, there are a number of pros and cons to running a business from home. It also depends on the type of business you run and if this will suit the working-from-home format. However, there are strategies you can put into place, such as being strict with your working hours, to combat the negative aspects of the home business.
For further information about insurance for your home business, contact CGU today.