Deciding where to reside your business is a choice all entrepreneurs will face at one point or another. When your business is new and every penny counts, a home office might seem like the most obvious option, but there’s a lot you need to consider. While cost is a major factor, it isn’t the only one.
Aside from a shorter commute, the most obvious advantage of a home office is the cost difference. Yes, working from home will be cheaper, but perhaps not by as much as you’d think. Unless you have a home office already set up, you’ll need to purchase new equipment and furniture. Although some of your home office expenses will be deductible, it’s important to note that the Canadian Revenue Agency (CRA) is putting entertainment, repairs and “mixed use” expenses such as cars under more scrutiny.
Working from a home office also means there is no physical barrier between your home and work life. For some people separating the two isn’t an issue, but for others the unexpected interruptions can mean missed deadlines and without any meeting and conference room space, it can also lead to neglected clients and lost opportunities.
As a startup, the costs associated with renting an office or meeting and conference room might seem unnecessary, but it’s about more than a place to work. Having an office space elevates your brand and gives your business instant creditability. Having a professional space also provides the opportunity for growth, both in terms of client acquisition and personnel. With an office rental you have the benefit of using professionally furnished utilities, such as a meeting and conference room. Having a meeting and conference room available whenever you want provides freedom when it comes to hosting clients, which can lead to more and bigger deals.
Working in an office rental can also be more conducive to productivity. Some people need to be in an environment with fewer distractions and find the routine of getting dressed and going to an office each morning motivating. Being around other like-minded professionals can often not only make you look more professional, but feel like it too.
Starting your own business comes with a number of variables that can make investing in overhead costs scary, but rarely does success come without risk. Only you can decide whether or not an office rental is best for your business. It’s important to consider how you work, what utilities you’ll require and what your vision for the company is.