When running a small business, it’s a smart idea to consider working from home. A home-based business may be the most appropriate option depending on the work you do and space you need. If you do choose to work from home, it should fit both your professional and personal requirements.
Running a home-based business reduces costs for office space, furniture, utilities, uniform and daily commuting expenses. As of 2016, Canadians who drive to work spend approximately $7,500 annually commuting to work. For example, a home office may reduce operating costs for a small business accountant who is an independent contractor. If this contractor doesn’t require regular face-to-face contact with clients, meetings can instead be held at the client’s business, online or over the phone.
Working from home gives you the flexibility to work the hours that provide you with your ideal work-life balance. For example, if you operate a freelance business performing payroll online and have a young family, you may prefer to work in the afternoons and spend your mornings on your parenting duties. It may also be beneficial to work from home if you have clients in different time zones, as working from home makes it easier to communicate outside of traditional business hours. Working hours that suit your life can help you achieve the greatest level of productivity.
There are significant tax benefits if you work from home, such as claiming deductions for a portion of office equipment and supplies, utility costs, and home insurance. If used for work purposes, you may also be entitled to claim a portion of your home or car. Accordingly, the Canada Revenue Agency recommends you to keep a record of the kilometres that you drive for your business. As well, keep receipts for everything purchased for your home-based business so your claims can be verified. Speak to your accountant or tax professional about which tax deductions you are entitled to, to ensure you are compliant with Canadian tax laws.
Mastering Multiple Skills
Home-based businesses teach you how to effectively run multiple business functions simultaneously, such as marketing, sales and business development. This ensures you are constantly learning and developing your skills, as well as provides experience with all aspects of running a business. Online business services have helped streamline functions such as payments.
Create More Opportunities and Income
Working from home often creates other opportunities. For example, a professional business consultant may be invited by a client to host a paid webinar series. This may result in a blog that generates advertising income. Working from home also provides flexibility to expand into niche industries and exploit opportunities that large companies often overlook. A home-based business has unlimited earning potential. You can get paid multiple times, selling the same work to multiple clients. For example, a freelance business journalist may sell first rights and reprint rights to their article.