Better technology has created more opportunities for people, including small business owners, to work from anywhere. Running a business from home is becoming an increasingly popular choice.

Here are three reasons you should consider a home based business model, whether you are starting or growing your business.

1. Lower operating costs

Not having to pay for separate business premises is one of the most important reasons to consider basing your business at home. It can lower your operating costs and increase profitability if you don’t need to pay rent or a mortgage for a separate premises. You may also be able to claim tax deductions if you have a permanent place of work set aside within your home, or occasionally conduct your business from home.

You do need to be aware that home-based businesses usually require home occupation approval from your local council and the rules will vary depending on what type of business you are operating. There may be restrictions having clients visit you at your place of work, or receiving frequent deliveries. You may also be restricted from running a business from home if you rent rather than own your property.

Contact your local government organisation or check our business licence finder for more information on the licences and approvals you may require.

2. Flexibility and lifestyle

Operating your business at home may offer better flexibility to suit your lifestyle. Without a formal ‘bricks and mortar’ office or shop that customers can drop into, you have more opportunity to set hours for your business that may be different from the standard 9 to 5. For example, parents may wish to work within school hours and be available for drop off and pick up times. Others may wish to start working later in the day so they can exercise in the morning, and work through the evening or on weekends.

When setting non-standard hours, make sure you communicate to clients when you will be available (and unavailable), including for email and social media messaging. Being available around the clock can create feeling of stress and anxiety and affect your mental health, so make sure you schedule some down time if you are likely to feel tempted to work around the clock. Using tools such as appointment setting software and automatic replies can help maintain communications, even when you are not physically there.

3. Productivity

Have you considered how much more productive you could be if you didn’t have to factor in dressing up, commuting to the office, chatting to co-workers, attending endless meetings and fielding frequent interruptions? When you work from home, you can often maximise your time and work far more efficiently than in an office environment. Being more productive — or working smarter, not harder — can have a positive impact on your bottom line.

What to look out for when operating a home-based business

Every choice has pros and cons, and running a home-based business is no different. Some of the questions to consider before committing to this model include:

  • Are you disciplined enough? To successfully work from home, you need to carry on your business in a professional way and ignore distractions such as housework, snacking or entertainment. You also need to know how to stop work at the right time and not let it negatively affect your family life or wellbeing. For some business owners, it’s useful to leave their business premises behind at the end of the day.
  • Is your home environment appropriate for a business? You will need good internet connection, a quiet environment if you need to take phone calls, an area you can set up to work and somewhere safe to store important business and financial records — whether physical or in the cloud.
  • Make sure you have all the appropriate approvals and insurance in place to operate your business from home, including checking what is and isn’t covered in your home and contents insurance.
  • Are you an introvert or extrovert? If you are energised by being around other people, you may find operating a business from home is difficult.

More information

Read more about operating a home-based business:

Business premises
09 August 2021