Working from home—full time or occasionally—has become the norm for many business owners. It’s been my norm for more than 35 years. And with the advent of the coronavirus, this arrangement—for owners and employees—may become imperative for some period of time. The SBA reports that 60.1% of all firms without paid employees are home-based, as are 23.3% of small employer firms, and 0.3% of large employer firms.
Assuming you can work from home (you aren’t barred by zoning laws or homeowner association/co-op board rules) and it’s feasible for your type of work, then take time to make your physical space conducive to being productive.
Be sure that the area in your home used for work is sufficient for your needs. You may only need a countertop and laptop to do what’s needed. But you may require more space. Perhaps you need a printer, an easel, a drafting table, multiple monitors, etc. Maybe you have inventory you need to stock. Here are some ideas:
- In creating your home office, keep tax rules in mind. If you run your business from home, in order to take a home office deduction, you must use the space “regularly and exclusively” for business. So the countertop in your kitchen won’t cut it. But the tax law doesn’t require you to dedicate an entire room for business; a portion (even one that’s not partitioned) will do. Learn more about home office deduction rules in IRS Publication 587 . If you merely work occasionally from home and don’t qualify for a home office deduction, use whatever space is comfortable for your work.
- Consider outside storage units. If you have inventory or need to store tools of the trade that can’t be kept on your premises, a storage unit rented on a monthly basis may meet your needs. You can then use space in your home for the administrative tasks of the business (scheduling appointments, keeping the books, writing reports).
[Related: How Do I Claim a Home Office Tax Deduction?]
The right setup
There are several key factors to making a home office a good place for your business:
- Lighting. There’s no getting around the benefit of good lighting. Natural light is great, but you may need to supplement it with overhead lights or floor/desk lamps.
- Seating. If you spend a lot of time seated (e.g., you work in front of a computer screen for your business), be sure you have a comfortable chair. Consider ergonomic options for seating.
- Internet access. If your business depends on being online, be sure you have the fastest internet access available in your area. Explore business internet services, which cost more than residential services but better meet your needs.
Special considerations for individuals with disabilities
Working from home, as a freelancer or business owner, may be an ideal solution for those with chronic medical conditions or other disabilities. It eliminates the commute to an office and, even more importantly, the home office can be set up to accommodate an individual’s needs. According to Freshome reports (based on U.S. Census information), of the 155 million employed workers in the U.S., approximately 9 million have a disability, and 58% of those with a disability work full-time, year-round.
In setting up the office, make sure that each of the elements discussed earlier are adapted for the individual’s special needs.
- A desk height may need to be adjusted for the height of a wheelchair if one is used.
- Lighting may need to be enhanced for those with impaired vision.
- Storage areas should be positioned for easy access. And be sure that the technology needed to access the internet, such as a screen reader, is on hand.
Your employees working from home
If you want to allow or require employees to work from home, be sure to address special issues. These include:
- Basic company policy. Do employees need to request the arrangement? Are there limits on how many days they can work from home? Consider what works for your company and communicate the rules with employees.
- Communication. Be sure to set company policy about how and when home-based workers are in touch with you. With today’s online options—Skype, Zoom, GoToMeeting—it’s easy to connect just about any time you schedule it.
- Security. If employees are logging onto company computers, be sure to review security policies to avoid any unwanted intrusions into your system.
- Employer costs. Consider reimbursing employees for their home-business needs (e.g., internet access). To do this on a tax-advantaged basis, use an accountable plan (explained in IRS Publication 463).
Richard Branson, founder of Virgin, said: “We like to give people the freedom to work where they want, safe in the knowledge that they have the drive and expertise to perform excellently, whether they [are] at their desk or in their kitchen. Yours truly has never worked out of an office, and never will.”
Think about it.
Barbara Weltman is the founder of Big Ideas for Small Business, Inc., which publishes Idea of the Day. She is the author of J.K. Lasser’s Small Business Taxes 2020 and other books that inform the small business community of tax, financial, and legal information they should know about.