Overcoming Homebased Hurdles

Heeding the advice of experts regarding the physical separation of work life from home life may be an ideal to work toward, but sometimes a company's growth can make this a physically impossible task. Roney, 38--along with her husband, her Beauty on Call business, seven employees and three interns--just moved into a single family home, where one whole floor and two spare bedrooms will be devoted to work space. This is quite an upgrade from their three-bedroom condo, where the work flowed out onto the kitchen table. From her Chicago home, she works with almost every cosmetics company and has more than 500 freelancers nationwide.

Roney expects 2007 sales to approach $1 million and plans to hire four more employees this year, which means her business might even outgrow her new single family home by next year. Roney plans on holding out from moving into an office as long as possible. "By eliminating that overhead, we're able to be more profitable, so I can hire more staff," says Roney. "Anytime we bring on more business, I'd rather use that money to hire an additional employee or pay my existing employees more money and also offer competitive pricing to my clients."

Roney loves working from home and has passed on the advantages to her employees. There's no dress code, and they all wear slippers; her employees complete 40 hours of work per week but have no set schedule. At least once every week, Roney prepares lunch for everyone. "Our home is their home, and they all have a great relationship with my husband. They feel very comfortable here," says Roney. "It's like family."

Entrepreneurs Who Need People
Roney's relationship with her employees is based on trust, but how does she go about finding people who merit that trust? Roney admits she hasn't always chosen correctly, but she has learned to look for certain qualities in potential employees, such as an entrepreneurial spirit and self-motivation. She also has started working with people initially on a freelance basis, so she can get to know them before hiring them full time.

Bringing employees into the house is a big step that needs to be considered carefully. It's a decision Aussie is currently struggling with, as he isn't entirely certain how comfortable he would be sharing his house with an employee. Ultimately, though, the decision might not even be one for the individual entrepreneur to make. Edwards warns that it could present conflict from a zoning standpoint. "This is where you really have to check your zoning, because if you live in a common interest development, [having employees] can create parking problems and get you into hassles with your neighbors," he says.

You can't be too careful when it comes to zoning restrictions in general, warns Williams, who recalls several instances where individuals lost their businesses due to zoning violations. "You cannot assume you can do whatever you want in your own house," she says.

To find out what's permissible, you should start by determining if a homeowner's association governs your residence. If so, you should carefully examine the covenants and restrictions. If not, inquire at City Hall or the county's Department of Economic Development or Department of Licenses and Permits.

Williams also warns entrepreneurs to purchase appropriate insurance for their businesses, as homeowner's insurance rarely covers home businesses. "Talk to an insurance agent, preferably an independent agent who can take a look at all different kinds of programs from different companies and find the best one," she advises.

Staying Professional
While the perception of homebased entrepreneurship has improved significantly, it may still be wise to keep the fact that you're working from home under the radar. "Despite the percentage of people approving of this now, you'll run into some people who will have a problem with it," says Edwards. "The best policy is to not make a point of it--not lie about it, certainly--but for all purposes, to create a business that doesn't have a geographical identity."

Being in the PR industry, where perception is important, McAllister, 43, and Rowan, 39, tried having an office when they first launched the company in 2001. Located in Toronto, the office was on the same street as the "big boys," but when the rent and the taxes went through the roof, they realized perception shouldn't have to come at such a high price. So they moved the business out of the office and into their respective homes--McAllister's two-bedroom home in Toronto and Rowan's New York City apartment--and thereby cut their expenses in half.

To compensate, they found alternative ways to maintain the level of professionalism their clients require. They work with a web hosting company so they and the approximately 10 independent contractors they work with all have a similar e-mail address; they partnered with a local The UPS Store franchise to handle all their bulk shipping needs, which relieves the impact their business has on their homes; and they use a conferencing service so they can both speak with clients via the phone. In addition, they researched all their local hotels and coffeehouses to find the best locations for meeting with clients.

"An increasing number of hotels are offering coffee service and free internet connections in the lobby," says McAllister. "So it behooves you to do a little research and find the places closest to you that keep with the image you're creating, the service you're providing and the industry you're working in, so you're never left scrambling."

McAllister and Rowan are projecting their annual billings to hit $500,000, but they have reaped more than just profits by keeping their business in-house. By setting up a virtual office and inherently trusting one another as well as their independent contractors to remain focused on the overall goal of the business, they have replaced office politics and rigidity with a commitment to be disciplined and work as a team. McAllister says, "Being outside of the four walls has helped us to create a company that is more solid in terms of the way people work together and feel about each other and the work they do than being within four walls ever could."

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