When to grow out of a home based business

August 12, 2008 · 0 comments

in Entrepreneurship

Q: “When is it time to grow out of my home-based business?”

 A: When I ran my business out of the house, my wife would say, “Mike, every flat surface in the house is your desk.” Clients would come in and plop down on the sofa. Our part time office assistant worked in the room next to the kitchen. I was always on; things always had to be cleaned up, ready for business. There was a big temptation to blur the time between work and home life. Did I work at home, or just sleep at the office?

It’s true that some good-sized businesses are run from homes. These are usually virtual business, where numerouis people work for the business, but remotely. Support people: bookkeepers, web designers, marketing strategists, virtual assistants. But also line people: field reps or technicians, contractor’s crews, and others who are paid per result not per hour.

This depends on the kind of business. A business that you essentially run out of your head (or from your computer) can be run from your home for a long time.

Many people run businesses from their homes that do not fit zoning requirements. But aside from the legalities, just how many people can you fit in your house? So the real crunch comes when you need to have a team of people work together in an office.

You must balance your desire to minimize overhead and avoid paying extra rent with several factors:

– The number of people that need to work together regularly

– Greater productivity and efficiency due to better workspace. Houses are often poorly laid out for office space.

– Image. How you come across to your desired customers and even your employees

– Revenue potential. By moving into an office or commercial space, how much could you boost your revenue and profitability? Is it enough to cover the increased overhead and then some?

– Readiness to grow further. 

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