Top 5 tips for running a business from home

Amazon, YouTube, Microsoft, Under Armour. These are some of the most recognisable brands on earth. What do they all have in common? They were started at home. In fact, a large number of businesses are started and run from people’s homes.

Whether you’re running a business from home or looking to get started, there is the right way to do things and the wrong way to do things. There is much more to it than simply starting up your computer and declaring your exciting new venture to the world.

So, what do you need to know when running a business from home? What are the things that you must do and what mistakes should be avoided? To help answer these questions, and more, here are our top 5 tips for running a business from home.

1. Setting up a Workspace
2. Paying Tax
3. Property Type
4. Home Extensions & Planning Permission
5. Insurance

1. Setting up a Workspace

As appealing as it may be, working from your couch every day is not the best way to ensure the success of your business. In an office, steps are taken to improve the health and safety of all staff – the same needs to be done in your home.

Begin by choosing a designated work area. This will help you be more productive and create the important separation of space between your professional and domestic life. Next, get the necessary items together for you to complete your work comfortably. This may include a desk, computer, chair, printer, and other items.

Once you’ve set this space up, run a risk assessment to ensure you can work safely. For example, set your desk and chair up in an ergonomic fashion to minimise the risk of back issues and other problems that can occur whilst working at a desk. Next, check that electrical equipment is in good working order – you may need a professional to help with this. Finally, remove any hazards from the space as you would in any other workplace.

When you’ve done all of the above, you will be ready to work in a safe and productive manner.

2. Paying Tax

When running a business from home, you will be responsible for managing your tax (unless you have an accountant who can assist with this). Running your own business will affect your taxes in a number of ways, including certain breaks that may be available to you.

In terms of council tax, this may change as a result of working from home. For example, your rate may change as you could be liable to cover the area of your home used for business. These could be business rates that you are required to pay in addition to your council tax.

There are also tax breaks that you may be eligible for. For example, you can claim back a percentage of your electricity, heating, and internet costs. There are also certain concessions for working from home that are possible in certain instances, these are known as allowable expenses. These vary on a case by case basis, so we advise speaking to a professional.

Another avenue to consider is to join an umbrella company. These are organisations that employ contractors or freelancers who work on fixed-term contracts. These companies will handle your PAYE and National Insurance deductions for you. As an employee of an umbrella company, you’re entitled to certain benefits such as statutory sick pay, maternity pay, and you will be viewed as working for one employer (this looks better when applying for loans).

3. Property Type

Before running out and buying a new computer, desk, and other supplies, it’s important to know whether you are actually allowed to use your home for running a business. Some properties have restrictions on them about how they can be used.

If you own your property outright, you need to check the title of the property. If you have a mortgage, you may need permission from your lender. Starting a business without checking could lead to legal consequences.

If you are renting your property, you will need to check your lease for any restrictions. If there are none clearly stated in your lease, you will then need permission from your landlord. Landlords may refuse this request upon certain grounds, such as if they believe your business will cause damage to the property. You can contest this with the help of a lawyer.

If you live in a council house, you will need to take similar steps to those in a rented property. You will need to speak to your local council or housing association – whoever oversees your agreement. This could also have an impact on your benefits and your council tax.

If you choose to operate out of your garage or shed, you can proceed without checks, unless you make any material or structural changes to the space. Should you look to expand your space, you will need a license or planning permission.

No matter the space, your neighbours will be a point of consideration. Should your business cause an excess of noise or disturbances, this may lead to complaints and possible legal action.

4. Home Extensions & Planning Permission

In the event that you become successful and need to expand your operation, you may look to extend your property or workspace in order to accommodate this in the form of structural changes. To do this, you will need planning permission from your local council or authority. We recommend getting legal advice to ensure you can move through this process as quickly as possible.

5. Insurance

Insurance is often something overlooked by those running a business from home, which is a big mistake, given that it’s so important.

What if your home was broken into? Or your property was the victim of a fire or flooding? Given this space is not only your home, but your workplace too, both your business and your personal belongings are at risk – which is why you need to be protected.

For example, your computer is work equipment, and it may not be covered by standard policies. This is why having Business Equipment Insurance will ensure that the source of your livelihood is protected, no matter the circumstances.

Another important thing to consider is your customers. Even though it may be your home, if you bring clients, business partners, or other people into your property as part of your business, you have an obligation to keep them safe. Unfortunately, even with all the precautions in the world, accidents can happen. In these events, you may be liable – so how you can protect yourself, and your customers? With Public Liability Insurance.

Conclusion

Starting a business is exciting and daunting all at the same time. If you follow these tips, however, you’ll be putting yourself in the best possible position for success. We understand that each business is unique. That’s why we offer customised business insurance solutions tailored to your specific requirements.

Dean Laming

Dean is a Chartered Insurance Broker with more than 25 years insurance experience. Through various underwriting, operational and management roles, Dean has built up extensive knowledge of how to run a business and is now Managing Director of Brisco Business, part of the wider Henry Seymour Group.

All articles by Dean Laming