FACT: Over 325,000 small and medium-sized businesses (44%) in the South East are run from home, nearly half under the £68,000 VAT threshold.
FACT: An additional 19,500 (6%) became home-based as a direct response to the economic downturn.
FACT: Fifty-three per cent of home-based businesses are single person SMEs and 84% of sole traders are home-based.
The economic benefits of running a business from home are clear. Indeed, Business Link research reveals that 53% of home-based entrepreneurs say that their main motivation is the ability to keep costs low. Not only does a home-based business involve minimal outlay and reduced overheads but a small annual tax allowance can be claimed towards office running costs.
There are environmental benefits, too. Working from home cuts out commuting, resulting in a better quality of life, higher productivity and a lower carbon footprint. In addition, there is less congestion on the roads and fewer emissions so both air pollution and fuel consumption are reduced.
The main disadvantages of being home-based, according to Business Link research, include the difficulty in separating ‘work’ from ‘home’ and the need to be self-reliant. Over a third of home-based SMEs have joined a network or membership organisation to help to combat these issues.
Deborah Wyatt, Business Link, acknowledges that working from home does require discipline.
‘We invite anyone considering moving their enterprise to their home to contact Business Link for free advice about the implications and support with any issues arising from the move,’ she said.
Among the considerations are:
- Notifying your mortgage lender and home insurance company.
- Contacting the Valuation Office Agency and the local authority regarding business rates and permits.
- Consulting an accountant regarding your income, VAT and capital gains.
- Telling the neighbours as there might be more disruptions, depending on the type of business
- Creating a separate ‘work zone’ away from any distractions, especially by family members.
- Getting into work mode by dressing professionally and creating regular breaks.
- Combating loneliness by organising regular meetings with other home-based entrepreneurs or business clubs to exchange ideas and catch up on news.
- Renting office space on an ad hoc basis if you are concerned about presenting a professional face when holding meetings or receiving clients.
- Establishing clear boundaries such as not answering your business phone or catching up on paperwork during private time.
- Protecting your work-life balance by making sure that your business does not take over your personal life.
Flexible working for employees
Allowing employees to work from home or to take advantage of flexible working hours can spread the benefits even further.
Deborah Wyatt said: ‘Growing numbers of employees – especially parents facing the daily challenges of the school run – are asking to switch to flexible working, which includes both working from home and staggering hours in the workplace.
‘Introducing a flexible working policy can benefit the business as well as employees. However, businesses that are considering introducing flexible working for the first time need to plan, implement and monitor its introduction across the organisation. Business Link offers advice on how these flexible working requests should be managed and how to ensure that the business benefits as much as the employee.’
When planning to implement a flexible working policy, businesses need to consider:
- What flexible working arrangements will suit the business?
- How will you deal with applications?
- Are there jobs that might be difficult to do under a flexible working arrangement, e.g. jobs that don’t suit home-working?
- If there are, what is the nature of the obstacle and can you overcome it?
- How flexible are your IT arrangements, e.g. can employees access their email away from the workplace?
Deborah Wyatt said: ‘Sophisticated communications technology means that it’s often unnecessary to commute daily or travel for meetings when a conference call will suffice. Flexible working practices can benefit all those involved – as well as the environment.’
Visit www.businesslink.gov.uk/employingpeople for information on the practical and legal aspects of flexible working, including useful tools and checklists. Alternatively, call Business Link on 0845 600 9 006.