Looking at a home business? Keep these points in mind.
- Running a business from home can mean saving a lot of money on office space.
- There are other expenses you might incur if you operate out of your home.
- Look into insurance requirements, renovations, and possibly upgrading your internet.
When I decided to start a small business a few years ago, the decision to use my house as my home base was an easy call. Since my business is writing services, and I’m the only employee, it made no sense to spend money to rent space in another building.
If you’re starting your own business, you, too, may be interested in running it out of your home. And that could be a great way to limit your costs, thereby allowing more of your income to land in your bank account.
But there are certain expenses you might incur if you run a business from home. Here are a few to keep on your radar.
1. You may need more insurance
Running a business from home could require you to obtain additional homeowners insurance coverage. If you’re starting a business you plan to run out of your house, contact your insurance company and ask whether you’ll need to make changes to your existing policy.
If your work involves sitting at a desk using a computer all day, you may not incur any added costs. But if your business involves creating furniture in your basement, you might end up having to pay more, as work like that could increase the chances of property damage.
2. You may need to renovate
Your small business will be your livelihood, so you need a dedicated space for it. To that end, you may need to invest some money into finishing your basement or garage so you have a workspace you can call your own.
Also, depending on the nature of your business, you may find that you need ways to store materials and keep yourself organized. Don’t be shocked if you wind up having to spend money to build yourself a closet or put up shelving. And you may find that you need to buy some filing cabinets to house your paperwork, contracts, and any other essential documents related to your business.
3. You may need to update your internet service
If your job is something you’ll be doing online, a slow internet connection could really limit your output — and make it harder to meet your earnings goals. It could pay to upgrade to faster internet service so you’re able to be more productive.
4. You may have to invest in a generator
In my area, the power goes out frequently. And if I don’t have power, I can’t work. As such, I made the decision to invest in a standby generator for my home that kicks on during power outages. And if you’ll be running a small business from home on a full-time basis, you may want to do the same.
Of course, a generator could end up being a multi-thousand-dollar investment. But if your area loses power a lot, it may be worth it.
Running a business from home has many benefits (like not having to commute anywhere and getting access to a stocked kitchen all day long). But be prepared to spend a little money to make your home a more suitable place to work.