When To Move Your Business Out of Your Home
Sam runs a $970K construction business out of his home.
Amy runs a $1.2M online business out of her home.
Chris runs a $250K consulting business out of his home.
All three are clients of ours, and all three asked me when they should consider moving their businesses out of their home. You might be surprised to hear that the smallest $250K business is the only business that I recommended move into an office space and out of a home.
Here is why:
Rent can often be one of the biggest burdens that a business carries. Ideally, a business wants to keep its fixed expenses as low as possible. If you spend $3K per month on SEO, and $3K per month on rent for example, and times get lean, it will be relatively easy to drop the SEO expense. Rent is a different story. Most commercial locations require a three to five year lease, and if your business can function well without an office space, you might as well play it lean!
The reason why the smallest $250K business in this example was the one I recommended move to a commercial location was because he had employees. Most cities only allow one employee to work out of a home location. He had two employees working out of his home, and it was time to get legal. 🙂
The other two businesses both are larger in revenue, but both only use contractors and don’t use employees. Amy’s business in particular runs well out of her home, and she likes to be around her kids. She has a dedicated schedule of when she works and when she is on family time, and has enough discipline to maintain that schedule. Working from home works for her.
Sam’s business also works mostly with contractors, and he can easily meet them in the field. Most of his work is done away from the office, so there really is no reason for him to add on an office expense at this point.
In my business, I delayed the move to an office as long as I could to save on rent. I knew it was time to move into an office when our completely remote team started running into difficulties in communication. There is something inherently easier about chatting with a coworker across the hall rather than emailing them, forgetting to email them, or discussing things once a week at a meeting.
Let’s do a quick evaluation to see if your business is ready to move out of your home.
- Do you have employees working in your home? If the answer is yes, and more than one, I would recommend checking with your city ordinances (usually easy to find online) and move to an office location immediately if needed.
- Are you experiencing difficulties in communication between people? If the answer is yes, it is probably time to move into an office.
- Is it hard for you to define work time from family time? If you find yourself working non-stop because you are home, consider moving your office to the basement, or a remote corner of your house that isn’t in the central hub. I would also recommend setting an alarm on your phone to get out of the office. If you are still unable to separate work time from family time, it is time to get an outside office.
- Do you have a time map? This is one of the best tools to set up your weekly schedule so everything will fit: business and personal. If you don’t have a time map yet, get one here. Select “Organization” as your most needed issue and we will send you both a template as well as video training to set it up. You are welcome. 🙂
And remember . . . play BIG in your business!
Yours, Kim Flynn
How to Market & Build Your Business