Working From Home Brings Challenges, But Also Rewards

[IslandBreeze]

For millions of Americans who lost their jobs over the past year, the next step is starting a business. Many enterprises are being launched out of residences. Owners of these home-based businesses find there are pros and cons to running a company out of a spare bedroom or den. Pros: A more flexible lifestyle and a huge cost savings. Cons: having to work alone, without a dedicated support staff, keeping work and personal lives separate. Joanne Hakim, who recently started her company The Pen Is The Sword in her Norwood N.J. house, finds a home-based business can be isolating after the experience of being surrounded by many co-workers. "I took for granted the interaction that I had with colleagues everyday" she said. "You fail to realize the importance of stimulation in your life".  But, she said "you don't have the constant interruptions that you do" in a workplace with many other people. The transition can be easier for other owners.

Charlene Li, who runs her new consulting and speaking business, Altimeter Group, out of her San Mateo, CA home, was used to not having face-to-face contact with staffers or clients since they were in other cities. She had a different challenge: She no longer had an information technology department to turn to for help. "I'm a pretty techie person but I still had a hard time figuring out how to set things up." said Li.

One of the great advantages of launching a home business is the extremely low start up costs-aside from a printer, PC, fax machine, and office furniture, the costs are minimal. Hakim said that if she had to rent an office and start furnishing it, "that would involve and expense I probably would not be ready to take on". "You can't beat the overhead" of a home-based business and also write off part of the house. That's because the IRS allows owners of home businesses to deduct part of their expenses including mortgage interest, repairs , utilities and insurance. Owners determine how much of the square footage of their home is dedicated to the bsuiness and that percentage of expenses for the home can be deducted. That protion of the house can also be depreciated. Some owners may be wary about taking a deduction for a home office because it was believed in the past to make a taxpayer vulernable to an IRS audit. Tax professionals say that is no longer the case--as long as the deduction is reasonable. The IRS has information about home office deductions in its Publication 587, Business Use of Your Home. You can access it on the IRS website,www.irs.gov/publications/p587/index.html.

Some owners might find, if they are inviting clients, vendors, or other business people into their homes, that they need to do a little decorating--including putting toys and bicycles away, and perhaps banishing cats and dogs from the rooms where visitors will be. Li does teleconferences from the room that serves aas her office. but positions the camera so participants see professional-looking bookcases. If it's just not feasible to have business meetings at the house, owners can rent office space or meeting rooms by the hour or perhaps use the office of a friend or relative.

Li, who has two children ages 8 and 10, said "the hard things have been to train them when my door is closed, to not come in." She recalled being on the phone when her daughter came into her office, demanding "come on, Mom, fix dinner." At the same time, Li said, "they love having me in the house. If they really need me, they can sneak in and say "Can I ask you a question?" A home business also can give a parent more flexiblity to chauffeur children to and from activities, and to attend school plays and basketball games. That might mean working during the early morning hours or evenings but the home-based entrepreneur truly can be the boss of his or her time. But it also creates more flexibility for running a company, and in turn can lead to more opportunities. Hakim finds that having a business at home makes it a lot easier to work with overseas companies like in India which is ten hours ahead of Eastern time. "My hours are all over the place" says Hakim " I could be talking to India at midnight.