{{ __('Skip to content', 'foundations') }}

Should You Start a Business from Your Home?

Lots of big businesses today started small – Amazon, Microsoft, Apple, you name it. 

For example, we all know of the garage where Steve Jobs built the first Apple computers.

Sara Blakely gained fame for founding Spanx, which she created in her Giorgia apartment while working a 9-to-5 job selling fax machines. 

There’s also the basement where Kevin Plank was selling his products in Under Armour’s early days. 

These success stories are a source of endless inspiration for many new entrepreneurs looking to build a thriving business from humble beginnings. 

If you, too, want to take the entrepreneurial path but have little money to spend, you are probably considering starting in your bedroom or spare room.  

But in a modern digital world where customers want insights into the companies they interact with by connecting with them across all channels and devices, is it really possible to achieve success when your primary office is located in your home?

How would that impact your reputation and customer perception

In this post, we’re looking at some of the most important factors you’ll need to consider if you’re looking to create a home-based business with a solid foundation.  

Table of contents:

  1. What to consider before starting a business from home

1.1. Decide whether a home-based business is right for you

1.2. Ensure your business is compliant

1.3. Adapt your business to the home environment 

1.4. Create boundaries for neighbours and family 

1.5. Keep your business and family details separate  

1. What to Consider Before Starting a Business from Home

Running a Home-Based Business

As a new or young entrepreneur with ambitious plans and limited funds, securing a proper office space can be difficult – if not impossible – in the early stages of building a business. 

Knowing that, locating your office in your home may be the most convenient option to cut overhead costs and invest the money you make in your business for further growth. 

However, if you’re thinking of starting a business from home, you must consider specific challenges, along with all the usual challenges faced by entrepreneurs starting and managing their own businesses. 

Following are a few factors that you should consider before starting a business from home. 

1.1. Decide Whether a Home-Based Business Is Right for You

Starting a Home-Based Business with a Virtual Office

Starting a business from home may or may not be right for you. 

Before setting up your office at home, you should look at factors such as your lifestyle, the type of business you intend to run from home, and the way you work. 

Instead of plunging right in, take a few moments to answer the following questions: 

  • What can you create in your home and sell online? 
  • Is there a market for your product or service?
  • Who are your primary competitors in the industry? Are they running home businesses as well?
  • How is your solution different from your competitors?
  • What is your Ideal Customer Profile (ICP) and how can you identify it?
  • How will you market your business?
  • How will you fund your business?  

Before plunging headfirst into business, it is also important to determine whether your ideas work as a home-based business. 

For example, you may not be able to run a manufacturing business at home or a business that involves a lot of customers coming and going. 

Limit your business ideas to those that allow most of the work to be done from home, such as an e-commerce business. 

1.2. Ensure your Business is Compliant

Registering a Home-Based Business with a Virtual Office

Just like any other business, a home-based business is subject to laws and regulations and you are responsible for complying with them.

According to the official website of the Australian Government, there are some general areas to watch out for: 

  • Tax obligations – In Australia, some taxes are managed by the federal government through the ATO, while others are based on state laws. Make sure you understand the different types of tax that may be relevant to your business, such as income tax, capital gains tax (CGT), or goods and services tax (GST). More information about the different types of taxation can be found here
  • Insurance – Your business may need certain types of insurance, either mandated by law (e.g., workers’ compensation) or to meet the demands of those you do business with (e.g. public liability if you have clients that visit your home office). You can also get other types of insurance to reduce risk and protect your business.  
  • Licences and registrations – When running a home business, you may need to comply with specific regulations that can be set by local governments. Outside of registering for a business name and applying for an ABN, you may also need permits for zoning, signage, noise control or health issues (depending on your industry and business type).   

1.3. Adapt Your Business to the Home Environment

Business Home Office

Depending on your industry and the types of products or services you’re selling, you may need to make some adjustments to successfully run your business from home. 

For example, if you want to start a tutoring business, you may want to have a back entrance that is less noticeable to neighbours.

You may also want to choose a room or area you can use to organise your materials, such as textbooks and handouts along with a dedicated room that can be used solely for tutoring. 

Or, if you’re running an online business, it’s important to consider some of the basic equipment you’ll need to hit the ground running, such as:

  • Smartphone and computer 
  • High-speed Internet
  • Printer and shredder
  • Security systems 
  • Shipping tools (e.g., scanners, weight scale, label printer, shipment tracking tool, etc.)
  • Google apps (e.g., Google mail, docs, spreadsheets, etc.)
  • Software (e.g., accounting, POS, HR, etc.) 

In addition to having the right equipment, it is also important to consider the physical setup and ergonomics of the space. 

Ideally, you should have a separate space in your home that is properly outfitted for work and allows you to stay focused and productive. 

1.4. Create Boundaries for Neighbours and Family

Running a Remote Business from Home

Separating your work life from your personal life isn’t always easy when running a home-based business. 

When your home is also your office, you might be tempted to spend breaks checking kids’ homework or fixing a broken sink stopper. 

Not to mention those moments when your kids interrupt your Zoom meeting or pets invade your workspace. 

Or, neighbours knock on your door to discuss the yard while you’re in the middle of a sales pitch.

So what can you do to create boundaries and avoid interruptions from family and neighbours?

Establish visual barriers for yourself and your children. For example, when your office door is shut, signal that you should not be disturbed unless it’s urgent by using a colourful “STOP” sign. 

Gather everyone for a family meeting and define rules regarding interruptions. 

Ask your neighbours politely yet firmly to not knock on your door during regular working hours. You must remember, however, that you are under no obligation to open the door while working. 

1.5. Keep Your Business and Family Details Separate 

Keeping Business & Family Separate with a Virtual Office

When setting up a business from home, ASIC gives you the option of registering your home address as a business address.  

But is that the most convenient option?

The short answer is no.

There are several drawbacks associated with using your home address for your business, including the loss of privacy, negative business impression, and an increase in cold callers. 

What’s more, uninvited guests such as clients, prospects and even disgruntled customers could turn up on your doorstep at any time.

More information about the disadvantages of using your home address as a business address can be found here

The solution? Consider using a virtual office to register your business.

A virtual office provides you with a professional business address in a prestigious location so you can protect your privacy and prevent angry customers from showing up at your front door. 

Plus, registering your business at a non-residential, professional address means you’ll be able to build your company’s reputation right off the bat.    

Virtual offices are very affordable, ranging from $50 to $150 per month or more. 

Most of them also provide access to fully equipped meeting rooms on an on-demand basis and other essential office services to help you reduce your admin burden, such as mail handling and telephone answering services.

The Bottom Line

Using a Virtual Office for Home-Based Business

Starting a business from home is a great opportunity to save on overhead costs and have the freedom to work from anywhere. 

Unless you are operating a retail store or expect customers to visit your office on a daily basis, traditional office space may not be necessary. 

By setting up a productive work area and utilising virtual office services, it’s easy to turn your home into a successful business hub. 

While there are a few challenges, like creating boundaries between work and personal life, with a bit of hard work and a clear strategy you’ll be well on your way to creating a thriving business that you can run from the comfort of your own home.

Want to start a home-based business? B2B HQ can help you build a solid business foundation by providing you with all the essential services you need to get you up and running in Australia. Contact us today and learn how to grow your business from home while still having a professional location to forward business calls, receive mail and meet your clients.

What Do You Need to Start Freelancing in Australia?
What to Look for When Hiring a Meeting Room