Higher gas prices and the ease of working virtually over the Internet increase the allure of working from home. Both employers and the self-employed are taking advantages of the cost savings of needing less office space and more flexibility. Whether you are working from home in your own part-time or full-time business, or telecommuting with your employer, there are some things you need to consider about your home office and about yourself.
For starters, let’s touch on both the perceived and real advantages.
Home offices for business owners
For a small business owner, working from home, especially in the beginning seems like a no-brainer: You don’t need a lease on office space when you work out of your home. For a new business that hasn’t turned a profit yet, this is a huge savings. You can get started without tying yourself to that expensive lease. You also save on utilities over having an office space, even if you use more than your household normally requires.
Another big savings is the cost to commute. No matter if you use public transportation or drive yourself, not having to pay to go anywhere to work saves both money and time. For the employee, that 30-minute drive time becomes a chance to hit the snooze button one more time. For the small business owner, it gives her a half-hour start on the day’s work or a little more time with the kids before they head to school.
Working at home has big savings
An overlooked savings is in work attire. For a professional, only having to don business dress for client or board meetings cuts costs both by needing fewer suits in the first place, and requiring dry-cleaning services less often. For some, just the thought that you can stay in your pajamas is a deal. In conjunction with this is a savings on lunchtime meals out. While you might meet a client or coworker at a restaurant periodically, noonday meals in your own kitchen will be the usual fare.
Then, there are the tax advantages: According to the Internal Revenue Service website, www.irs.gov, you can claim business deductions for your home office as either self-employed or as an employee. The rules are a little strict and differ for owners over employees, but worth investigating. For tax purposes, if your employer pays you from an invoice and issues you a 1099-MISC at tax time, the IRS considers you self-employed. If your employer issues you a pay stub and takes tax deductions from your income, you should receive a W-2 at tax time. In this case, you are not self-employed, you are an employee, so there are different rules for your home office deductions. Most importantly, if you take a deduction as an employee, your working from home must be for the convenience of your employer.
With all these advantages making work from home so attractive to so many, there are some drawbacks as well. While most of us believe we are self-motivated, some of us actually need the presence of a supervisor on site or co-worker nearby to keep us on task. Some personality types tend to procrastinate without the pressure of an employer constantly monitoring progress. If you are a self-employed professional, such as a real estate agent or insurance broker, who must meet clients and be away from your office much of the day, working from a home office makes it less easy to have an assistant to handle phone calls, routine correspondence and other office tasks because you must open your home to another person, often leaving them there without your presence.
Even if you have the drive to put work first, the lure of the laundry room or the pile of dishes in the kitchen sink, or that new video game for “just a few minutes” may become a distraction, begging you to take care of them first. If your background is more corporate or industrial, you might be used to a strict routine of the day starting at a specific time, coffee breaks and lunch breaks on schedule and clocking out at the end of business hours. When you work from your home, that daily agenda becomes less strict. If you don’t finish a project, you can open just up your computer after dinner and knock it out or, you can slip away early to pick up your kids from school or walk the dog. If the work you do is repetitive, without other workers nearby, the sheer boredom of the work may become a distraction.
Lack of social interaction
Finally, there is the question of loneliness versus teamwork. The facts are clear, some people work just fine, and actually do better, on their own where they can adjust the noise level, temperature, lighting and other environmental aspects of their workspace. These people can be de-motivated by having to work in a noisy cubicle or with the constant disturbance of other workers’ voices. According to author, Susan Cain, in her groundbreaking work on introverts and extroverts, this describes the needs of an introvert: the over-stimulation of environmental factors he can’t control makes him less effective. An extrovert, on the other hand, derives energy and becomes more productive in a team setting. Knowing your motivational personality type can help you and your employer determine if telecommuting will work for you.
Take an honest look at your work habits
To help the advantages outweigh the disadvantages, some employers engage monitoring software programs to keep employees on task. Monitoring their workday via their computers lets the employer address distracted workers with concrete information. Other employers use collaboration methods to stay in touch with their team. This can range from open instant messaging windows to full-screen views, video chat over the Internet or simple open conference lines. For self-employed professionals, utilizing a virtual assistant such to handle incoming phone calls, keep your calendar and manage your correspondence can be the answer.