Working from home has many advantages. One of the easiest ways to start a business is to start it from your own home.  It’s the most natural way to start for many.  Whether you are baking, woodworking, offering a service, or anything else, doing so out of your house has many advantages. What isn’t discussed as often are the disadvantages of working from home. 

5 Surprising Disadvantages of Working from Home

Most business owners just assume that if they are running their business from home, their home address and their business address will be one and the same.  That’s fine, but what if you decide to move out of your home?  Changing business address can cause issues. This is just one of many surprising disadvantages of working from home.

Disadvantages of Working from Home #1:  Your Home May Not Be Conducive to Productive Work

A home may not necessarily be well equipped to handle working. You need a workspace that will help you be productive.  This will be different for everyone.  But, consider that you at least need a room with a door you can close.  Drawing boundaries between home life and work life can be hard.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Managing time can be harder when working from home as well. It can be easy to work all day when you are at home, or not work enough due to “home” distractions. It’s hard to get people to respect your time and boundaries. Also, isolation and depression are not uncommon. 

Disadvantages of Working from Home #2: You May Not Be Allowed to Run Your Business From Your Home

In some situations, you may not be allowed to run your business from your home. If you rent, you will need to check your lease to make sure there are no issues. Whether you rent or own, you need to check zoning requirements. Also, agencies like the Health Department and the FDA have guidelines related to running certain types of businesses from your home. 

Disadvantages of Working from Home #3: Home Address on Public Record

Many people worry about their home address as their business address.  They feel it is unsafe, so they turn to a PO Box or an UPS Box. However, that can make it difficult to get funding.  Lenders require a physical address.  

This is a unique disadvantage of home-based businesses.  Even home based businesses need funding for a number of things: 

• Supplies
• Inventory
• Equipment (for jewelry making, woodworking, computer/ office equipment, etc.)
• Even working capital

One option is to use a virtual address.  Be aware however, that some lenders will not accept those either.  The truth is, if someone wants to find your home address, it’s easy enough regardless of whether you use it as your business address or not.  In the end, to get funding for your business you are going to need to use a physical business address where you an receive mail.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Disadvantages of Working from Home #4: Changing Your Business Address Later Can Cause Problems

You may think you can get by with using your personal address now, and just change it later. That’s not a good idea. If you think about it, your business address goes everywhere.  For example: 

• All legal documents
• Licences
• Marketing materials
• Your website
• Insurance papers
• Everywhere!

The longer you wait, the more places you will have to remember to change it. It is a bigger deal than you may think if you miss one. If lenders start looking into your business and see your business address is listed differently in different places, it can cause unnecessary issues. It brings up fraud concerns. 

A bank will not take the time to try to figure out all the different ways a business may be listed. Even something as simple as using Street vs St, or using an ampersand in one spot and the word “and” in another can cause issues. So you can imagine using your home address in one spot and a separate business address in another will definitely cause problems. 

That doesn’t mean that if you move your business out of your home you have to keep your home address.  Just be aware that you will need to make sure the address is changed everywhere.  

Disadvantages of Working from Home #5: Legal Issues

There are a number of legal considerations that you have to think about when it comes to running a home based business. For example, even if zoning laws allow you to run your business from your home. You need to check out what requirements those laws lay out. Some cities have regulations regarding foot traffic. Some even regulate yard sign use for advertising. And if you have an Homeowners Association (HOA) you may need their permission as well.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Some cities limit the number of employees a home based business can have. Some even regulate the number of customers that can come to your door. You’ll need to check with your local city officials to determine what if any regulations apply to you. And figure out what licences and permits you need to operate.

Consider the tax issues as well. While you can deduct some expenses when it comes to home-based businesses, it can get complicated. You need to make sure you thoroughly understand the home business deduction on the front end and plan accordingly. 

Insurance needs to be considered as well. If you have employees or customers coming in and out, you need to think about what would happen if they were injured. Will homeowners’ insurance cover it? Often you will need to purchase a separate policy or a rider. All insurance needs to be in place on the front end.  Be sure it has the proper business address on it!

Avoid Many Disadvantages of Working From Home 

Nothing is perfect. Running a business from your home is no different. However, you can avoid many of the disadvantages of working from home by building fundability from the beginning.  Not only will it help with legal issues, but it makes a bigger difference than you may think when it comes to funding.  

The best way to start building fundability, whether you own a home-based business or run a business from a different location, is to work with a business credit expert. Contact us today for a free consultation.

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