Before you set up the office, decide where you want to work.
Working from home is not a suitable option for all businesses or personalities.
- You will be deprived of work and social interactions.
- Distractions – your TV, fridge, children, couch.
- Customers may doubt your professionalism.
To work from home, it’s useful to establish a regular routine of working hours and conditions.
- Wake and begin work at a regular time.
- Dress appropriately – can you really work to the best of your ability in your pyjamas?
- Create a clear distinction between your office and the rest of your home.
You will need to be sure that you are compliant with home business regulations for your area. Contact your local council before you begin trading so that you can be sure of your legal standing. Problems include:
- Parking restrictions.
- Employment regulations.
- Noise levels.
- Business hours.
Insurance policies will differentiate between your home and business assets. Your home insurance policy will not cover your business assets. Business insurance will also be necessary to cover you from any injuries that your clients may suffer while visiting your business.
You will be able to claim a proportion of your household’s bills as business expenses. This includes lighting, heating, council rates and water used for the purpose of transacting business. Your deductions will be measured by the proportion of the home that is used as a business site. Your accountant will be able to assist you to make these claims.
- Selling your home is complicated by running a business from the premises. Businesses attract capital gains tax upon sale; homes do not. Therefore, if part of your home is used for business, part of the building will be subject to capital gains tax when it’s sold.
- Will you need a computer and printer solely devoted for business use? Or is it possible for your family to cope using your current system only outside the working hours of your business? Remember that purchases that are used for your business operations will attract tax deductions.
Getting the right tools
To run your business from home you will have to have access to the tools of the modern office. The most important piece of home office equipment will be your phone and internet; your connections to your customers.
You must have a phone line solely devoted to the business or you will lose customers when people can’t contact you or believe they have called a home number. A direct office phone helps convince customers that they are dealing with a legitimate establishment.
Your internet connection may also need to be upgraded to accommodate the needs of your business. Most telecommunications services offer business deals and you should look into taking advantage of these offers.
The expansion of your business may require you to take on more employees, to move closer to customers or to present a more professional environment to clients. Moving to a new office is often a natural progression for businesses that are initially based at home.
External business premises
The most significant factors to consider when searching for a business premises are cost, location, size and growth.
Questions to ask include:
- Can you afford the lease or rent within your business plan?
- Can your customers easily reach your business and will you be easily able to deliver to them?
- Will the building be too big or small for your business?
- What is the length of the lease?
- Is there potential room to expand your business within this building?
- Will your business comply with local zoning laws?
- Can you easily travel to the business from your home?
- Does the building require any repairs?
- Are there any security concerns with the building?
Set up where you find a demand for your business, even if this location is close to your competitors. Seek your customers and don’t flinch from competition.
Leasing premises allows you to begin trading without having to make a large initial outlay of finances that could otherwise be used to fund other areas of your start up.
Your budget should include roughly 5 to 10 per cent of your annual projected sales to finance the costs of rent or lease costs.
You should approach a lease greater than three years with extreme caution. Shorter leases will provide greater flexibility, allowing your business to move, expand or reduce its size and location depending on your trading successes.
Your lease must include simple explanations of these items:
- Rent amount.
- Frequency of payment.
- Dates for property review by the landlord.
- Permitted uses of the property.
- Date of lease commencement.
- Date of lease expiry.
- Obligation of landlord to provide repairs to the property.
- Security bond.
Serviced offices are furnished and equipped with the tools of business, such as computers, photocopiers and telephones.