Are rising costs and an uncertain economy causing your to think this is a time in your life to free yourself of some of the hassles of maintaining a business or store front business? Perhaps you want to save time and with the increasing use of smart phones and tablets, is it important where you base your business? So why not cut your costs by moving your office into your home? While of course not all businesses have this choice, many do and the financial benefits for increasing profit on decreased revenue are great.
You can reduce or eliminate the cost of:
- Office or store rental: Instead of paying rent, you can get a tax deduction for your office space.
- Commuting: Auto expenses drop dramatically when you can walk to your office in seconds.
- Business-related travel to and from your home becomes deductible too.
- Food: coffee breaks and lunches are far less expensive at home.
- Insurance: Riders or endorsements to your homeowner insurance policies cost less.
- Child care: While you may still need some, it will certainly be less when working from home
- Personnel: You should have no difficulty becoming a virtual company with your personnel gladly working from their homes. A newly published study by Stanford University found 51% of employees wanting to work from home and a 2009 JobNet survey found that over 70% of employees report willing or wanting to work from home.
- Taxes: Additional possible deductions include a portion of homeowners dues and fees and real estate taxes (which can lower your “below-the-line” taxable income), furniture converted to business use, and a portion of the cost of entertaining business associates at home.
By keeping such costs down you can increase profits without raising prices. In fact, many companies shifting to a home-base find they can even lower prices while maintaining or even increasing profits. People who have moved their home office to an office outside the home tell us it takes 2.5 to 3 times the gross income to produce the same net income they were making when working from home.
Fortunately there is no longer a stigma attached to working from home. In fact it’s considered chic these days, especially considering it’s so very eco-friendly, a definite plus in the mind of many clients and customers.
And there’s a bonus above and beyond the bottom line: increased personal satisfaction. Repeated surveys over the years show that better than nine of ten of those who are home-based report they are happier working from home and would recommend it to others. Their reasons are many: more control over their time, more time with family, greater flexibility to balance home and work, a more relaxed environment, and more time to be involved with their local community or personal interests outside of work.
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Adapted from our Costco Connection column from July, 2009