Have you outgrown your home office?
Working at home can be quite rewarding for new business startups looking for a way to save money on business expenses. After all, if you work out of a home office, you don't have to commute, which means you'll save money on • Fuel expenses • Vehicle maintenance costs • Office space rent • Personnel expenses to help you run the office • Office furniture and equipment • Office supplies along with other possible expenses that pop up from time to time when you run a business. Nevertheless, you can't run every type of business from your home. Depending on the industry you are working in, some client’s may not feel comfortable coming into a private home to utilize your services or buy your product. They may feel trapped or vulnerable. There are definite advantages to being visible in a commercial space that include networking opportunities with neighboring businesses and also being easily accessible to passing potential customers that see your signage and are reminded they need your service or product.
How do you determine when is the right time to move? Here are a few trigger points that come to mind when considering a move:
You need to hire employees – Some businesses find it possible to hire employees who work remotely. But if you need the employees to work at your location, you may not want them entering your residence every day to work. This is particularly true if you have children or other family members at home, you have valuables you worry about getting broken or stolen, or if you need employees to work in the office while you spend time out of the office. If your business has grown to this point, then it's time to think about moving the business out of your home.
You can boost your productivity – For tax deduction purposes, there should be a specific area within the home that is designated just for the home office. Mine is in the basement. I have a sign-in sheet on the work table when I go downstairs that I also sign-out on when I go back upstairs for lunch or to go to the bathroom or check the mail. (I’m a hard boss to work for!) Having a separate work space within the home may help you focus more on the job at hand because we all know there can be so many distractions in that warm and comfortable place you call home. What’s stopping me from walking straight upstairs and taking a nap every day at two o’clock? My cat Flame is constantly taunting me to lay down on the couch with her. She doesn’t know the boss is watching! If you have small children or you are prone to watching TV while you work, then moving might curb the distractions. Before deciding to move, try moving your work area away from distractions, setting regular work hours, and possibly "dressing up" as if you are going to an office job. If that doesn't boost your productivity and you aren't disciplined enough to cut the distractions, then consider moving.
You can make more money
If you are running a type of business where customers typically visit a business before making a buying a decision or if you occasionally need to do face-to-face consults with your clients, then rented office space might make your business look more professional. Perhaps a larger space would allow you to offer different or more revenue streams. If you estimate an increase in sales greater than your expense of renting office space, then you should move out of the home office and pursue more revenue for the business. As with any strategy change to your business model, map it out on paper first to see how the money will also change.
You want to interact with others– Working at home can be lonely. Sometimes you just need to interact with other people. Consider a co-working option or working out of a public space with wi-fi accessibility. You could find an ideal work situation where you can save on rent or work for free and still get the interaction you need. Otherwise, if you don't need a lot of space for equipment and inventory, then consider renting a desk rather than a whole office.
You've outgrown the space
– As businesses grow, they tend to accumulate technology or inventory. If that is the case and you are running out of space in your home, then it may be time to consider another option. You might get by with renting space for storing product inventory if that is your only issue, but if you have to upgrade equipment that is larger than the space you have available in your home (for instance, industrial printers), then you should consider moving out of the home into a space that is adequate for your equipment needs. Again, be sure you have the profits to allow for the extra expenses you'll incur renting space before you make the move.
Working from home has its benefits, but sometimes you outgrow those benefits or your business changes, requiring a different work environment. Get in the habit of routinely evaluating your business environment and make a change if you need to. Look for resources like the Kentucky Small Business Development Center in Louisville to think through the entire process with you. We’re here to help! I hope you’ll call me if you need assistance in making an informed decision in your business on this topic or others that may be keeping you awake at night. I might even tell you it’s time to take a nap on the couch with your pet!
Understanding that these are hard decisions to make, I’m here to help as you walk the journey of entrepreneurship. I have a simple checklist of questions for potential entrepreneurs that I’m happy to share with you. Please shoot me an email or give me a call and we’ll set up a time to get started! Contact Vallorie Henderson, Management Consultant at the Louisville SBDC, (502) 625-0123or email me at email@example.com
Recently, the Louisville SBDC's Director, Dave Oetken, was invited by Insider Louisville to provide commentary on the outlook of Louisville's dining scene. Below is the content of that article.
Louisville Dining Scene
The avalanche of "foodie" accolades awarded to the Derby City in recent years has been truly remarkable. In 2015, USA Today ranked Louisville 2nd "Best Local Food Scene in the Country." Travel and Leisure called us one of "America's Best Cities for Foodies," and Zagat deemed Louisville one of "America's Next Hot Food Cities." There's no doubt Louisville is doing a lot of things right.
A combination of the "right place and right time" has created a flourishing environment for our dynamic dining industry. A strong network of local farms has emerged to bring restaurateurs fresh local ingredients. Our location as a distribution hub also makes obtaining great products faster and easier than other parts of the country. The mayor's "Bourbonism" initiative and the excellent work of the Louisville Convention and Visitor's Bureau have helped snag headlines, while entrepreneur/chefs like Edward Lee, Fernando Martinez and Anthony Lamas, with their continued quality and new concepts, make it look easy.
Those successes are perhaps inspiring fast growth. According to Food & Dining Magazine, restaurant openings in Louisville still outpace the rate of closings by a 2-to-1 ratio.
To keep growing jobs in the dining sector, budding entrepreneurs should know that odds of failure in the industry are overstated. Economic researchers have thoroughly debunked the myth of a 90 percent failure rate in the first year. There is some data
to suggest that by the third year, the failure rate for independent restaurants is around 60 percent. While that may still seem high, U.S. Small Business Administration statistics show there are only small differences in business survival rates across sectors.
At the Louisville Small Business Development Center
, we advise that operational expertise and business-planning skills in the restaurant industry are as important as culinary talents and innovative concepts; and more often than not, the difference between success and failure.
Restaurant startups and scale-ups require sound financing guidance, realistic forecasting, and knowledge of regulatory and licensing requirement timelines.
A common initial mistake is under-budgeting and failure to properly navigate or consider the above-mentioned hurdles. For example, owners who are behind on their launch timelines, but rushing to debut their business for cash flow purposes, risk their reputation. In the digital age, it is very difficult to move online sentiment in a positive direction after a deluge of negative reviews and comments. University of Maryland researchers recently created a computer-assisted Yelp review text analysis tool
that predicted failure of restaurants in the next quarter with 70 percent accuracy.
Louisville's "foodie" scene is intimately tied to the availability of talent, capital and mentorship. When margins are tight, establishments must be prepared to adapt or succumb to shortages and price spikes. This is where operational expertise is critical to success.
Bring all of these ingredients together, and Louisville will have a dining scene to savor for years to come.
Congratulations to our recent graduates of the Business Plan Boot Camp!
The Louisville SBDC hosted the ASBDC's Accreditation Team and "broke bread" before they departed. The team was represented by SBDC's from West Virginia, Washington, and Connecticut.
Monique McFarland of MainSource Bank shares tips to acquiring capital at our ‘Buying a Business’ workshop.
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Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of SBA. Reasonable accommodations for persons with disabilities will be made if requested at least two weeks in advance. Contact your local service center to make arrangements.