Setting Up an Office

5. Working from Home

Many small start-ups find setting up an office at home the most attractive option. It is cheap and handy, but there may be drawbacks.

5.1 Is it legal?

It should usually be possible to use part of your home as an office.

5.2 Will it provide the right working environment?

It can be difficult to discipline yourself to be productive.

• Take yourself seriously. Even if you work only a few hours a week, remember you are running a business.
• Establish a work space. It will be easier to concentrate on work once you enter the work space, and to switch off when you leave.
• Separate 'at work' from 'home'. Discourage social phone calls and domestic interruptions during your working day.
• Arrange your work patterns to fit in with the family and set working hours during which you are not to be disturbed. Outside working hours, give family and friends your full attention.

5.3 Will working from home provide the right image?

• Do you expect visitors to come to your office? What will they think? Could you arrange to visit their premises or hire a meeting room instead?
• Will your address be suitable? Should you use a mailing address? Business centres often offer a 'virtual office' facility, receiving post, telephone calls and faxes on your behalf and then forwarding them on to you.

5.4 What are the financial implications?

• An appropriate proportion of bills (eg electricity) can be treated as business expenses and offset against tax. There may be other tax implications. Ask your accountant for advice.
• Unless you claim mortgage payments or rent against tax, you should not usually be liable for uniform business rates (UBR). If part of your property is used wholly or mostly for business, you may be liable.
• You must tell your insurers you work from home (and change the insurance on your car, if you use it for business). Otherwise, your insurance may become totally invalid.
• You may be required by law to take out public liability insurance. If you employ people - even part-timers - employer's liability insurance is compulsory (see Insurance).