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More people are choosing to have the home as their workplace, swapping the office for the comfort of their study. This method addresses the work-life balance, giving less commuting time and more freedom. But what happens when you start your own business from your place of abode? Below we provide an essential guide on using your home as a business premises.  

Is that right for you? 

It may seem like operating a business from home is a great way to save money. Yet it is not right for every individual or their business. As a business grows, it may become impossible to operate in a building that is designed and used as a living space. Practicalities such as storage and inventory which need to be somewhere specially designed for them, could also be troublesome 

One solution is to outsource as many facets of the business as you can, instead of bringing new staff members into the fold. Most parts of a business will now have outsourced solutions available to them, from accountancy to virtual assistants. You don't have to be a large company to use them either. You may hire a small business marketing consultant to help with your promotion so that all of your advertising and social media is done off the premises.  

You should also consider some of the negative aspects of a home business. An office can look far more professional than a home, so if you are having clients visit you then make this a consideration. The impact of the business on your neighbors, particularly if it is a noisy business, should also be given some thought.  

However, the advantages are many. You will save money as you are not paying rent to an office or warehouse. This can be great when starting a business, as it keeps costs low as you begin to build up a profile.  

Check your local and state laws 

The first thing to do before starting a business from your home is to check local and state laws. Most places will be more than accommodating to anyone who wants to start a business from home. However, some regulations can be unique to a given area. For example, some places will not let you run a home kitchen and you will have to have commercial premises. Others may have regulations on people in your care, such as children, being kept in your home. 

You should also look at zoning laws in the district. These are specific laws that state what kind of buildings exist in a certain section of the neighborhood. You may be forbidden from having certain operations running from the home.  

Rentals and mortgages 

Another important check to make is the terms of your accommodations. If you are renting, you should check with the landlord if a business is allowed to be run on the property. In many cases, operations such as digital remote work will be fine. However, if you are planning to keep inventory there, or have staff and customers coming and going, they may be less lenient.  

The same applies to your mortgage provider. Very often, contracts will state that businesses can not be run off the premises without notification. This may then lead to a change in your interest rate or terms and conditions. It is worth checking as it could lead to issues down the line. 

Insurance is also a factor you should take into account. For example, if you have thousands of dollars worth of stock in a house and are robbed, the insurance company will not pay out if you have not negotiated business terms. Home and business insurance are different and you may need to pay both to be covered for any incidents that occur.  

Claiming allowances and tax 

Another benefit of working from home and starting your business there is that you can claim some of the expenses back in tax. However, you have to meticulously document what and how you are claiming. The amount you claim in your home has to be used regularly and with exclusive rights to your business. For example, you can't claim the whole value of a home computer that gets used 25% of the time for business and the rest for recreational gaming.  

A lot of this can include Smart items and you can claim a percentage if it has varied uses. For example, if you installed smart lighting in a study, if that area is used exclusively for work you can claim back. Should you have 50/50 use of it, then you can claim this. There are also energy efficiency credits you can claim for. The best way to know what you can and can not claim is to get a professional accountant to work out taxes for you. Keep receipts of everything and let them know the hours you use the exclusive areas.  


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