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Are you looking at a home business? Consider these points.
Main points
- Running a business from home can mean saving a lot of money on office space.
- If you work outside your home, you may incur other expenses.
- Look into insurance requirements, renovations, and perhaps even upgrading to the Internet.
When I decided to start a small business a few years ago, deciding to use my house as my home was an easy call. Since my business is a texting service and I’m the only employee, it doesn’t make sense to spend money to rent space in another building.
If you are starting your own business, you may also be interested in moving out of your home. And that can be a great way to limit your expenses, allowing more of your income to land in your bank account.
But if you run a business from home, there are some expenses you may incur. Here are a few to keep on your radar.
1. You may need additional insurance
Running a home business may require you to obtain additional homeowners insurance coverage. If you start a business that you plan to run from your home, contact your insurance company and ask if you need to make changes to your existing policy.
If your job involves sitting at a desk using a computer all day, it may not cost you anything. But if your business involves creating furniture in your basement, you may have to pay extra because such work increases the chance of property damage.
2. You may need to refresh
Your small business will be your livelihood, so you need a dedicated space for it. For this, you may need to invest some money in finishing your basement or garage so that you can have a workspace that you can call your own.
Also, depending on the nature of your business, you may find that you need ways to store materials and organize yourself. Don’t panic if you have to spend money to build your own closet or shelves. And you may find that you need to purchase some filing cabinets to store your papers, contracts, and other important documents related to your business.
3. You may need to update your internet service.
If your business is something you do online, a slow internet connection can limit your results – and make it harder to meet your income goals. I may have paid to upgrade to a faster internet service so you can be more productive.
4. You may need to invest in a generator
The power goes out frequently in my area. And if I have no power, I cannot work. So I decided to invest in a standby generator for my home that would start up during a power outage. And if you run a small business from home full-time, you might want to do the same.
Of course, a generator can be an investment of several thousand dollars. But if your area loses a lot of power, it may be worth it.
Running a business from home has many advantages (like not having to travel anywhere and having a stocked kitchen all day). But be prepared to spend a little money to make your home a more suitable workplace.
