2009 Small Business Guide
small business
Small-biz owners save rent by moving home

Zoning and tax issues

Zoning is another issue. Operating a business is prohibited in some residential neighborhoods. Of course, the rules aren't always enforced. "If you have three extra bulldozers in the backyard, it would be noticed," Cloutier says. "But a laptop and fax machine wouldn't."

You can call your municipal zoning office to find out the rules in your neighborhood. And, of course, you can ask anonymously to avoid attracting suspicion.

Remember that your business may be taxed at a different rate if your home is in a different city than your office. You'll also want to take into account the ability to write off the expense of a home office on your taxes.

"Working from home will maximize my tax deduction," says Haris Tajyar, owner and CEO of Investor Relations International, which he is moving from an office in Sherman Oaks, Calif., to his home in Encino, Calif.

Home distractions

Another issue working at home is potential distractions. "You have to be very careful to separate your business life and your home life. Don't begin to confuse the two," Cloutier says. "So mowing the lawn because it needs it rather than making additional sales calls isn't going to cut it," he says.

"Your work space at home should be segregated and treated as off-limits for family members except for designated periods, just as if you were at the office."

Sheran has an 8-year-old daughter and turns on a red lamp to let her know she's working and shouldn't be disturbed. So far it's gone well.

Employee input

If you have employees who will be coming to work at your house, you'll want to consider how the move will affect them. "You could imagine a nice homey, positive environment," Siegel says. "But maybe workers don't want to smell your wife cooking liver and onions for dinner while they're doing their work."

If you have a good relationship with your employees, you can ask them what they think of a move to make sure they're on board. "You don't want the inmates running the asylum, but you still may want to take their pulse," Siegel says.

At Schroder PR, "Early reports from the team show that morale has risen," Sheran says. "People are really excited. Most of them are right out of college and they like the flexibility."

Moving costs

Another factor to consider is costs that will bite into your savings from shedding rent. First, there is the cost of the physical move, along with a new letterhead, business cards, and phone and Internet service.

"You want to look at the numbers to understand the broad picture," Siegel says. "Make sure your savings, with all costs considered, will be sufficient to warrant the move."

For most businesses, "It's an awful lot of savings," says Ted Kramer, a certified business adviser for the Florida Small Business Development Center in Boca Raton, Fla. He predicts that many more businesses will make the switch from office to home.

"When we come out of the recession, I don't think we'll see companies come back to offices quickly, because they will see they're saving money."

That seems to be the case at Schroder PR. "Our people say it will be hard to drag them back," Sheran says. "I second that. It's probably the best thing that's ever happened to me."

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