How to start a home business
A home business may be a dream come true but you need to be clear about how it will work.
Opting out of the daily grind to set up a home business is an attractive prospect to many people. To make sure yours is a success you need to have a plan, as well as clear objectives and, contrary to the “working from home” fantasy, that involves a lot more than just deciding which local cafe will be your regular and scouting out the shadiest spot in the park to sit with your laptop.
Spokesperson for the NSW Business Chamber Paul Ritchie says that sole traders and micro-businesses (businesses that employ less than five people) are becoming more prevalent in Australia.
“We have a huge number of micro-businesses across Australia. Firstly, as the World Economic Forum points out, Australia has the easiest regulations in terms of starting a business,” Paul says.
Flexibility a plus
Advances in technology means that operating a business from home has become a more viable option than it once was.
“You don’t need a store front like you used to have, because people are increasingly doing their shopping, and looking for services, online,” he says.
Paul says there are a number of attractions to setting up a business at home, with flexibility being the key.
“You are your own boss, which gives you flexibility to work when you want to work,” he says.
Web information
There is a certain type of person who can make a home business work for them.
“People who are generally risk-takers in the positive sense of the word and people who have confidence in their own ability to make their own way in the world,” he says.
“We find these people live and breathe their business.”
Robert Gerrish, the director of Flying Solo (a website providing information, discussion forums and support for people running small businesses that also runs live events) says that the majority of the website’s users work from home.
“We know from the Australian Bureau of Statistics that over 70 per cent of Australian small businesses are micro-businesses and of those over 70 per cent work from home,” he says.
“Most businesses operating from home are service-related businesses, so they don’t need a massive amount of equipment. These can be anything from designers, writers and architects, to mortgage brokers and financial planners. Some are making products, so they might be designing or making kids’ clothing or cooking sauces or something.”
Conducive environment
If you work from home some blurring of the lines between work and home life is inevitable, particularly if you have children, but there are ways to minimise this.
“A common mistake for people, when they run a home office, is they give themselves the worst room in the house,” Robert says. “But it’s very important you give yourself the best possible working environment. So if you give yourself the room that’s got cardboard boxes, bicycles and half-assembled Ikea furniture, this is not a good idea. You need to give yourself a space that you can really enjoy your work.”
Creating boundaries, both physical and mental, is the best way to compartmentalise work and home life.
“If you’re going to work in your living room or in your bedroom, try to design it in such a way that you can shut it all off, even if it’s just putting a nice sheet over your desk or something,” he says.
“I know people who will leave their home in the morning and walk around the block and back to their house to their office, so they continue to have a going-to-work ritual. You can kind of trick yourself and having boundaries is the key thing.”
Importance of networking
There are a few traps that Robert has noticed people fall into when working from home and a big one is getting distracted by household chores.
“It’s important to plan and prioritise your work, to be very clear what your action lists are at the beginning of each day and the beginning of each week,” he says. “Working out your own work style and how you perform at your best is a key thing.”
Establishing a connection with other people running small businesses through avenues such as the NSW Business Chamber or organisations such as Flying Solo is a great way to get advice and become a part of a support network.
“Being isolated can also affect people, even in the middle of a big city, maintaining connection with other people and businesses is very important.”
Separate your work life
The considerations you need to make when you are getting your home business up and running depends on the nature and size of your business (the Federal Government website business.gov.au has a lot of helpful information).
“Talk to an accountant and get some advice from a tax perspective and be aware of things like insurance, for example, as sometimes your household contents insurance doesn’t cover you for particular business items,” Robert says.
“And, particularly if you have clients or customers coming into your workspace, you need to look at WorkCover and occupational health and safety issues.”
Professional organiser Sarah Cottman runs Heavenly Order and works with a number of people trying to whip their home businesses into shape. Sarah agrees that separating work and home life as much as possible is the key to success.
“Have very clear boundaries of when work starts and when work finishes and make sure you do set aside time for family life and leisure time,” Sarah says.
It is important to create systems to ensure things run smoothly.
“Normally I’ll get called in when things are not working, so the business might be getting a great turnover with cash but, for example, they haven’t sent out invoices or they don’t know where to find details on a job that they’ve just quoted for.”
Sarah recommends having adequate storage that is designated for your work papers, colour-coded files and creating a simple flow chart of how you want your business to operate.
“One of the things that has helped clients in the past is to have a lockable filing drawer that is specifically for work and little fingers can’t get in there,” she says.
“Also, having something that is not necessarily something you would normally have in your home, such as a metal filing drawer, even touching it gives you the feeling of, ‘OK, I’m actually at work’.”
Having the right attitude towards your business goes a long way, Robert says.
“If your business is going to be taken seriously then you need to take your business seriously,” he says.
“We see it sometimes if they’re treating their business like a part-time hobby. If you are walking around in pyjamas, you can permeate that sense to people around you and your business can be stifled. So you need to present a serious image and that gives you the best chance of success.”
MORE INFORMATION
Federal Government business.gov.au
Flying Solo flyingsolo.com.au
Heavenly Order 9997 7135, horder.com.au
NSW Business Chamber 132 696, www.nswbusinesschamber.com.au
RULES TO WORK BY
Working from home regulations address the impact your business activities may have on the surrounding area (for example, pollution, energy use or parking). Some issues to consider are:
* Council approval – zoning, signage, health issues
* Home mortgage and rental agreement restrictions
* Insurance – ensure you have the correct level to protect yourself
* Financial management – arranging finance and setting up systems
* Taxation – Capital Gains Tax, deductions for expenses
* Location – zoning and redevelopment
* Set up – separate your work space from the rest of your home
MORE INFORMATION
Federal Government
MAKING YOUR HOME BUSINESS A SUCCESS
Robert Gerrish, the director of Flying Solo, has a some tips for improving productivity when working from home
Setting boundaries
* To ensure you are not prey to other people’s priorities, you need to make a conscious choice of how available you are to your customers and how much time you are prepared to dedicate to your business.
* Being accessible by those who genuinely need your support is laudable but allowing yourself to be available to all 24/7 is rarely a good strategy.
Staying in control of your time
* Set retrieve schedules for your email program – if you can bear it, a maximum of four times a day will see productivity soar.
* Set deadlines and hold yourself accountable to them.
* Recognise that there is always more to do than will ever be done, and so some things on your list won’t happen.
* You need to learn how to say no to unreasonable customers and requests.
Embrace technology
* Smart phones allow you undertake small tasks when you suddenly find yourself with a small “gift of time” – such as waiting for an appointment, when stuck in traffic (so long as you are not the driver), when arrangements change at short notice and so on.
* Increasingly, computer hardware suppliers allow you to design your ideal laptop or desktop configuration. Take advantage of this by carefully considering how you want your computer to perform.
* Clarifying the main tasks you are undertaking with your business will help your local computer supplier determine your needs.
Online tools
* From project management and document filing programs to book-keeping and invoicing, there is a mass of low-cost online tools to support your productivity.
