How to Setup a Home Office
Tips on starting your own home-based business.
Technology transforms work
Setting up a home business has never been easier or more desirable. The technology and communications revolution has made options for business more flexible than ever before. If you are the pyjama-wearing type, what could be better than taking your coffee into the office and opening your emails before breakfast? If you have a Blackberry-type device or an iPhone, you don’t even have to leave the bedroom.
In 2010 a vast variety of businesses, particularly service-based ones, can be conducted from home offices. The fact that many full-time employees and consultants operate this way underlines the ease with which work can be done without geographical compromise. You may be surprised to learn that Apple Mac began as a home business.
Home business red tape
Work, however, is still work and you need to be mindful of your legal, licensing and taxation requirements. Unless you expect to be earning a very large income it is not necessary to form a company. And you only need to be GST-registered if you earn $75K or more. But you will need an ABN (Australian Business Number), which is easily obtained.
If you don’t have an accountant, get one. Seek advice before starting but, in most cases, there won’t be many problems if you are running a one-person business. State governments and local councils can get narky though if more than one other person who doesn’t live in the house is on the payroll.
You may wish to talk to an insurance consultant about public liability. Your domestic household cover does not apply to the tools of business. You should also get your vehicle insured for business use.
Tax advantages are multiple. For example, if you have to drive to the post office to collect mail from your PO box, that trip is deductible. Having a post office box keeps your business mail separate and, frankly, looks more professional. It is the same with having a dedicated business telephone line, although in some cases just a mobile might suffice. You can probably claim as much as 90 per cent of your car running costs against the business, provided you can substantiate (via a logbook) this usage. A portion of your home electricity bill and the whole cost of a dedicated phone line are deductible, and so on.
The internet enables you to sit at your desk in your office and source all manner of information. Small Business Victoria has an outstanding guide to setting up your home-based business. The Australian Taxation Office has a useful Checklist for New Business.
Space and privacy matter. So does self-discipline.
It is important to have at least one room that is separate from the day to day operation of the house, so that distractions can be minimised. One problem with working from home is the risk of interruption when you least want it – someone arrives to mow the lawn, religious canvassers knock on your front door, the dogs won’t stop barking, your child arrives home from school with two noisy friends in tow. You have to make it clear that your office is sacrosanct, that this is where the money is being earned. After a while, everyone gets used to it – provided you are firm and consistent.
Talk to other people who run businesses from home. Many will talk about the risks of procrastination, distraction, lack of motivation and loneliness. Self-discipline, independence and resourcefulness are pre-requisites to being self-employed and working from home. So before you ask anyone else the important questions, ask them of yourself.