Fifty-two percent of all small businesses in the United States are home-based. The benefits of starting a home-based small business are myriad, and one of the most obvious is completely eliminating the dreaded commute to the office. Most Americans, according to a Gallup poll, spend an average of approximately 50 minutes a day commuting to and from their offices. In addition to no commute time, the following three benefits are just some of the reasons why home-based businesses are rapidly becoming the fastest growing form of business start-ups in the country.
No. 1: Allows for greater flexibility. Small business owners that are home-based have the ability to work whenever they want, whether it be at night, in the morning or anytime in between. This is especially beneficial if you have children and/or family obligations, as you can schedule business meetings with your clientele or suppliers around taking the kids to school, games, etc., which can then take place via instant message, over the phone or Skype from the comfort of your home office. Furthermore, working from home not only drives out drive time, but does away with dress codes, and when you roll out of bed you’re already at work.
No. 2: Reduces overhead costs. Due to the fact that you don’t have to rent office space if your business is home-based, your overhead is already significantly lower than a small business owner who rents an office. This, in turn, allows the home-based business owner to be more flexible in their pricing decisions in order to better contend with the competition that has to pay office space expenses, such as rent, utilities, etc., and might not be able to compete with your prices as they must consider their overhead costs when making pricing decisions. And, getting back to no commute, the home-based small business owner saves a small fortune on gas in the long run. The bottom line is that running a small business from home requires much less startup cash as well as maintenance.
No. 3: Tax benefits. Tax advantages for home-based businesses are plentiful and chock-full of deductions. First and foremost, a small business owner working out of the house is allowed to deduct a portion of their home’s operating and depreciation expenses as business expenses. This can include a percentage of the mortgage, property taxes, and home insurance. Home-based business owners can also deduct a portion of their utilities, such as heating and electricity bills, as well as office supplies, including paper, ink toner, postage and even paper clips. Office furniture, such as desks, chairs, bookcases, etc., are also allowable deductions. Although daily commute deductions do not apply to home-based business owners, work-related travel deductions do, such as attending a conference or traveling to meet a client. In these cases, you can deduct any transportation costs, such as plane tickets, bus fare, taxis, airport parking, rental car, and lodging.
Blog by Dale Myers. the NALA's Head Writer.