How To Effectively Run A Business From Home

A woman running a business from home

Tough economic times, evidenced by the contracting of the economy by 3,2%, have resulted in many South Africans looking for new ways to cut back on monthly expenses. Small and medium business owners are feeling the pinch, which is why working from home or relocating from rented office space to a home office is fast becoming a considered cost cutting trend for local entrepreneurs and business owners.

“Operating a home business can give you the best of both worlds,” says Gugu Mjadu, Spokesperson for the 2019 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, awards aimed at celebrating South Africa’s successful business owners in the SME space.  “Working from home gives you all the benefits of running a small business, while also offering flexible working hours, no commute and some tax advantages,” she added.

Mjadu warns that while it might seem like utopia, running a successful business from home still requires the key business elements to be in place. She offers her top five tips for running a successful business from home:

1.          Respect zoning laws

While running a home office may require just a desk and an internet connection, depending on what you do (manufacturing, regular delivery of goods, etc.), you can run into trouble if your home is not zoned for the business you want to run.  Are there any zoning laws for your area?  If you have employees, have you got enough off-street parking, so you don’t have irate neighbours who can’t get out of their driveway?

2.         Consider registration and tax benefits

Although it is not necessary for all businesses to register their company with the Companies and Intellectual Property Commission (CIPC) early on, business owners should consider registering their businesses when they plan to transact with government and the formal sector or wish to access certain types of government support. There may also be tax benefits to registering your company, as registered businesses have a lower tax rate than individuals.

Furthermore, business owners that use their homes as business premises can benefit from tax deductions, such as interest payments on their bond and daily expenses incurred from running the business but speak to a professional for advice. 

3.         Remember the basics

Stick to your business plan. Running your business from home still needs a plan, management and leadership skills and discipline. And, if you have employees, they should have their own space to work and enjoy all the same ‘facilities’ as a normal office environment.

4.         Behave like the landlord

Insure and run your business as if you were in rented premises.  Don’t let a burst geyser that floods your uninsured stock be a setback. 

5.         Separate work and play

Set aside a specific area in your home where you will work and treat it as an office.  Be able to close the door at the end of the day so work doesn’t creep into your down time.

While you’re working, keep all home activities separate and don’t let them interfere with running your business.  You may recall the now famous BBC News interview with Prof Kelly[1] who was disturbed by his toddler during a live interview.  While he managed to keep his composure and became a virtual overnight online sensation, some of your clients may be less understanding!

“Running a business from home can be very rewarding and profitable.  In fact, many successful businesses had their beginnings in a home office or, in some cases, a garage.  However, if key business fundamentals, a strong work ethic and passion for what you do are missing, your business may not get off the ground.  Home businesses should not be seen as an excuse to be in your PJ’s at noon, but seen as an opportunity to save costs, set your own flexible work schedule and maximise your earnings by working smarter,” concludes Mjadu.

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