Home based businesses are an awesome way to keep overhead lower while providing the financial resources one may need to provide for family and themselves. According to statistics from the Small Business Administration home-based small businesses account for more than 50% of all small businesses. Many operate with one worker while others add employees as they become more successful and need additional help. Small businesses in the United States employ 51% of all private sector workers. Home offices offer lower overhead and the opportunity to work a business schedule conducive to personal needs, such as kid’s school schedules. Tax benefits and incentives can be advantageous.
According to data analysis by Global Workplace Analytics home-based businesses are not just for the self-employed. The number of employees telecommuting at least on a part time basis has risen 140% since 2005. Currently 4.3 million workers now work at home at least half time. That is 3.2% of the non-self-employed workforce. Larger companies are most likely to offer work from home opportunities, but some smaller companies are realizing they can operate more efficiently at a reduced cost by offering work at home opportunities. Currently an estimated 7% of companies offer this opportunity as a cost saving benefit to their companies, but this trend is growing at a rate of about 40%.
To be successful operating a home office there need to be certain guidelines to follow. Whether telecommuting for an outside employer or self-employed it is important to maintain a disciplined schedule. The work must be completed. Some home workers may need to remain at a desk for data entry, customer service or answering calls while others may have more freedom to move around. Regardless, a schedule should be set. Even if working in pajamas the worker must be disciplined to start and end the day on schedule for optimum efficiency.
Have a set workspace. whether using a room set up as an office, using a section of the kitchen table or operating on the patio by the pool, it is important that at specific times there is a designated area separated for conducting work. If there are others in the home, they need to know that at certain hours a designated space is for work. This will help maintain discipline and keep work organized. It is highly suggested that obtaining a computer for only business use is a better practice than using a personal or shared computer. This will also help keep attention focused on work.
There are tax benefits to working in home offices. The IRS realizes that there are legitimate expenses. Of course, supplies are always deductible from taxes, as are equipment purchased for business use. IRS Publication 587 will describe the deductions you should include. Deducting the use of space in your home for business use is the trickiest of the deductions and should be considered in advance as there are very specific guideline and rules for deducting a home office expense. Publication 587 outlines how to proceed with obtaining this benefit available to telecommuters and the self-employed.
