Office at home or rented space? (1 Viewer)

Just looking for some opinions really, I run an IT Support & Web Design firm and have done for a couple of years, we're actually booming at the moment which is quite suprising given that many are feeling the pinch of the credit crunch!

At the moment I run the business in evenings/weekends (otherwise known as "spare" time .. heh), however in the not so distant future I want to be doing it part and then full time. At the moment I need the security of a f/t job to enable us to buy a house and eventually have a family .. got to get priorities right!

My question to you guys is, when I buy a new house (we should hear tonight whether our offer is successful) I'll have the facility to have an "office" at home by converting a second garage. I think this would be perfectly acceptable to clients, but others have suggested it would be better having rented office space somewhere - more professional and less risky having people at your own home.

Any thoughts?

Ruth

Clearly if you want to present yourself as a major operation to attract large business clients then image is very important. However, if you are still at the stage where you are still establishing and growing your business then maybe it’s more important to have stability and low costs.

Renting space will of course cost you significant money. And you might find you can only afford some place that doesn’t represent your business as well in any case. One benefit of renting space is that you can get away from your home and stay focused. Also, you can rent the space you need e.g. if there are several people in your team.

If you are working from home you can still rent well equipped and well presented office space by the hour/½day/day etc from business centres such as Regus – ideal for that big presentation. You can even just rent a desk with free phone and internet rather than a whole office for casual meetings.

On the question of security, there are plenty of businesses where clients visit the home (hairdresser, designer, teacher/tutor, finance advisor etc) so clearly it is considered acceptable. But I guess you have to consider the practicalities. Does a loo-break mean giving someone access to unsecured areas of your home? What if you need to leave your client alone for five minutes in your office? How will you manage drinks/food. How will you do an off-site back-up of your business files?

So I guess it comes down to how often you need to see clients, your budget, how much space you need, your image requirements and where your business is at/going.

Just my thoughts

Chris

Thanks for the thoughts Chris, much of what you've said are exactly in tune with my thoughts - at the moment I am not really big enough to warrant an entire office however in the future having somewhere formal for big meetings/presentations would be useful, and I know of a few office places like Regus nearby so that would be good to consider for those situations!

Ruth x

Don't forget to let your insurance company know if you intend to run a business from home

I have worked from home most of my working life and with a couple of about 2 year periods using a rented office, one being in a high rise with harbour views and the other a converted house. So I prefer working from home.

However, most of my life was insurance and the last 9 months have been doing the Access thing and in both cases 99% of people I see involves me going to see them.

If I was in a business where people came to see me I might still go the working from home way but would have part of the house set up to be very office like, probably detached from the house. When done properly one of the advantages is easy parking for people coming to see you and a nice relaxed atmosphere.

PS. As Rich said you need to check things such as insurance. Might be different in Australia but making sure tax deductions related to costs in the home office are OK will depend under audit that such things as insurance are paid at commercial rates. And of course at "claim time" insurance with domestic rates etc....well you can guess the rest of the story

One area where I do have people come to see me is for lunches. I started this a couple of years ago when smoking was banned in restaurants. These lunches are typically where a lot of business was done and the client is collected and taken back, the same way as I use to do it with a restaurant. I have done quite a few of these fancy lunches at home with people who had I previously done the lunch at the restaurant. In each case they though it was better. In fact one of them does a similar thing himself and he has now switched to doing the lunch at his home.

So the "working from home" is good and covers a wide area.

However, I think at the end of the day it is your own personality and what you would like that is the key. I am a great believer that we turn up certain types of people in business. So if you are the sort of person who really likes the idea of working from home then it will be also be right for your customers. But if you are the sort of person who would only work from home because of how you see the economics etc but if given a free hand you would prefer the normal office, then you will probably turn up customers who expect the normal office.

The caution was related not the cost but the fact that customer entering your property might not be covered under a household policy

Thanks for the advice Mike, it's good to hear from someone who's seen both sides of the arrangements! I've checked with our insurance guy as we're just in the process of buying a house, he seems to think that I don't need to declare a business such as mine as running from my house as it's not the type of business generating tons of visits or whatnot.

Also my registered address is actually at my accountant's office. My business insurance are aware of the setup and haven't had any problems, in fact it might well go down when I move house.

What we'll probably do to start with is I'll have an office in one of the spare bedrooms (it's a 4 bed house) with a view to converting one of the garages in the next couple of years should the business continue to grow and the existing arrangements not work too well.

Ruth

It depends on how big you want to go...

If your small time and are looking to Build from the ground up then:

By using your home office you will be able to write off additional morgage/rent expenses along with common household items. Ex: cleaning supplies, tolietries, Livingroom/waiting room items, cable TV, snacks, drinks...just to name a few...depending on where you live you can get up to 40% of these everyday things written off....not to mention the $$ you save on ur comute to work....haha

If you are established already and are looking to expand...

then an office is the way to go...you get all the writeoffs that you would get at home, but they would have to be purchased for "office use"