Newer technology has driven growth in home businesses, but some of the most successful companies can trace their roots to founders’ homes. Technology giants Apple and Hewlett Packard began in garages, and the Mars chocolate company began in a home kitchen, according to Home Business magazine.
Thanks to high-tech tools and a healthy online market, people are taking advantage of this opportunity. Inc. reported that less than half of all small business ventures last five years, but approximately three-fourths of home-based businesses make it in that same period. It’s an attractive option for people exiting the corporate world, those looking to balance care of children or elderly relatives, as well as workers wanting to avoid the hassles of commuting.
What is a Home-Based Business?
A home-based business refers to any enterprise where the primary office is located inside the home. Administrative and managerial activities, as they apply, are typically performed in the home instead of another office or location.
A home business can involve even a significant amount of work outside the home. For instance, someone may run a catering or interior decorating business out of his or her home, but a lot of travel would be involved. Those examples are still home-based businesses because primary administrative and managerial activities take place in the owner’s home.
Be careful not to confuse a home-based business with working from home. A home business owner certainly works from home, but the term “working from home” often refers to an employee who works remotely.
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4 Perks of a Home Business
- A Much Shorter Commute: Eliminating the commute can benefit your bank account and health. The average one-way commuting time is 1 minute in the United States, according to the U.S. Census Bureau. That results in a great deal of time and money, including direct transportation costs and potential lost work productivity. Additionally, commuting can negatively impact your stress and psychological health, as Scientific American reported.
- Fewer Distractions: Having control over your office can eliminate auditory and visual distractions from coworkers and electronic devices. About 70 percent of U.S. offices have some type of open office plan, and more than 50 percent of workers describe their current workspaces as “too distracting,” The Seattle Times reported.
- Flexibility: Owning a home business gives you the ability to take care of young children and other loved ones. You can work whenever and however you want.
- Be Your Own Boss: You’ll reap the rewards of organizational growth and be in charge of major decisions.
- Lower Startup Costs: Compared to starting a traditional business, home-based businesses require lower overhead. You won’t need as much startup money for office rental or purchase, and given those lower costs, there won’t be as much pressure to hire people.
You shouldn’t take owning your own business lightly. While there are plenty of perks to a home-based business, you’ll need to be mindful of the drawbacks, too. Some people struggle to deal with potential isolation and keeping home and work life separate. As with any business venture, there may be long hours required and bumps in the road that can have a financial impact.
Make sure your neighborhood allows home businesses. As a general rule of thumb, most landlords do not allow home-based businesses. Even if you’re able to have a home-based business, some ideas may make some types of home businesses difficult. Signage, parking, and insurance implications could force you to start your business in a more traditional way.
Choosing the Perfect Home Business
You can start a home-based business across several industries. Many workers are exiting the corporate world to enjoy the benefits of owning their own business and eliminating the commute. Others are focused on developing their skills so that they can enter the workforce and gain the same types of benefits.
Accountants, market research analysts, and public relations specialists are just a few professionals who can create home-based businesses. Pursue those career options and more by earning your online business administration degree at the University of West Alabama. Our program offers concentrations in accounting, business administration, management, marketing, and more.
At UWA Online, you’ll study in a convenient environment that allows you to maintain your professional and personal schedule. Tuition is competitively priced, and 80 percent of students receive some type of financial aid.