From the June 2000 issue of Startups

Thinking of expanding your homebased business and hiring employees? Worried that you'll have to leave the comfort of home to accommodate those workers? Relax. You may not have to go anywhere. The following innovative entrepreneurs have managed to hire employees and still enjoy the benefits of being homebased:


Julie Bawden Davis is an Orange, California, writer who specializes in small and homebased business issues. She often contributes to The Los Angeles Times, The San Francisco Chronicle and Entrepreneur's Business Start-Ups magazine.

Home (But Not Alone): Employees Working In Your Home Office

Cathy Nedd, owner of Nedd/Detroit Public Relations in Detroit, has always worked from home. She initially started her company in 1994 in an incubator situation that included an apartment, but growth came quickly and with employees on board, she soon outgrew her space. Rather than setting up shop in a traditional office, she bought a 3,000-square-foot loft and converted the downstairs into office space. Today Nedd has annual sales of $750,000 and 10 employees working in her home.

For Nedd, being homebased was a priority. "I didn't want a traditional office space," she says. "I don't like commuting; I get sleepy and out of sorts. My home is also really pleasant. There are high vaulted ceilings, skylights and a 180-degree view of downtown Detroit and Canada." Nedd's space is large enough to accommodate seven desks in the living room, which is next to the kitchen. She also has private offices for administration and the graphics department. The majority of her personal living space is upstairs.

During the day, Nedd's front door stays open so that vendors and delivery people can enter and leave at will. Employees work whether she's in the office or not. "They're all basically good employees," says Nedd, who's only had to let one person go in six years. "I tend to be trusting, and I've found that I get the best of people that way. Everyone has a key to the [loft] and can come and go as they please. On the weekends, though, they call ahead." Nedd was fortunate that the owners of the building OK'd her homebased business and that local zoning ordinances allow her to have employees.

Though she wouldn't work any other way, Nedd admits that her work situation has its challenges. "I'm not a very private person, so it doesn't bother me to have people touching my stuff and using my kitchen, but that sort of thing does bother some people," she says. "I'm also single. The situation would be more difficult for people with families." Nedd does, however, have a problem with kitchen privileges and cleanliness.

"We only have one refrigerator, so my food often disappears and I don't have a lot of food storage space because employees leave their leftovers behind," she says. Cleaning up can also be a problem. "I have a cleaning person come in once a week, but the place is often a mess. The other night, a friend stopped in after we went out to dinner and there were coffee cups all over the place and dirty dishes."

If you're considering working from home with employees, privacy, food storage and cleanliness are a just a few of the things you'll need to consider, says Rudy Lewis, president of the National Association of Home Based Businesses (NAHBB), which provides support and development services to homebased companies. "The first thing you have to do is an assessment," he says. "Determine if it's feasible for you to have employees working in your home. Then think about what roles your spouse and children will play-because they will make up a role if you don't give them one."

Although many homebased businesses don't have strict hours, Lewis suggests creating a schedule, especially if you have children. "There has to be a time when work stops and family time starts or the business could create a lot of turmoil for your family," he says.

You should also consider the type of business you have. "Some businesses create more noise and garbage than others," says Lewis. "Something fairly clean and quiet like a computer company is much different than a printing situation, which can make a lot of noise and create a lot of waste."

If you can answer yes to the following questions, then opening the doors of your home to employees may work for you.

  • Do you have enough space for a workstation for an employee or employees? Will the space be safe and functional?
  • Are your spouse and children comfortable with the idea of your having employees work at home? Do they understand what you require during work hours and can you carve out enough work hours in the day?
  • Are you and your family able to forego some privacy?
  • Are you zoned for having employees work in your home? Can you get insurance coverage?
  • Is there adequate parking for employees?
  • Is it feasible to run your type of business in a residential area?

Run Of The Mill: An Offsite Manufacturing Facility

Kelly Lester is glad that her employees don't show up every morning in her Tarzana, California, homebased office. While her six workers report to a factory 10 minutes away, Lester enjoys performing administrative duties in a peaceful home office. "I love the flexibility that this approach allows me," says Lester, whose company, Switchplates by Art Plates, creates decorative switchplates, generating annual sales of $500,000. "I could set up shop in the factory, but this way I also get to be home with my three children. Even though I'm completely responsible for the company, I also kind of feel like a stay-at-home mom. The factory keeps going while I'm away."

Lester answers customer service calls from her home office and is in contact with the factory throughout the day. She also visits the factory daily. "I think this approach has worked so well for me because I have a great forewoman who can run the factory as well as I can," she says. "I do, however, give my workers some leeway to do things their own way. Owners who aren't on site have to give up some control of how things are done. Fortunately, if the employees make a mistake, the materials aren't expensive and the product isn't something time-sensitive. People can wait a little while for switchplates."

Over the years, Lester has found that despite her absence from the factory, employees work very hard. "I've never gone in and found anyone not working. The orders always get completed and shipped," she says. "I trust the employees and let them create their own schedules, which they really appreciate. There have only been a couple of occasions when an employee took advantage of the situation, but other employees told me about it."

When a homebased company is running nicely and there is good management, an off-site factory or shop situation can work very well, says Lewis of the NAHBB. "When they get away from the glare of the main office or shop, business owners can be very productive," he says.

Is working at home with a shop or factory down the street for you? Answers these questions and find out:

  • Do you have or can you find an employee who can virtually take your place? Are you good at training people to run things while you're working off-site?
  • Are you comfortable with someone doing the job differently than you would?
  • Can you trust employees to work while you're not there?
  • Do you have a product or service that people can wait for? If your product is needed quickly and workers are out, you'll need to drop everything at the home office and go in to the off-site facility.
  • Are you able to safely give out your key to the factory or shop to an employee or employees? Or are the items highly valuable and at risk of theft?

Phoning Home: Telecommuting Employees

Thanks to today's advanced technology, Jennifer Rudig's employees can telecommute, leaving her the freedom of having a more private homebased office. "Using the Internet, we manage to stay connected while being in different places," says Rudig, who owns Pillar Applications Group in Minneapolis, an information management company that has annual sales of close to $300,000. "Having our employees telecommute from home most of the time naturally works for us-probably better than any other scenario," she says.

Rudig has two offices in her home. One is downstairs and is used to house computer systems, and her employees work there when they come in one to two days each week. The other is Rudig's personal office, which is located upstairs next to the children's rooms. She and her husband have five children.

"One of the biggest benefits of this set-up is it's cheaper overall for both the business and me," says Rudig. "I not only save on child-care costs, the business also saves a great deal on overhead. My employees work at home in their own office space, and we give them a monthly stipend to upgrade their systems."

Rudig has found that employees are very satisfied with the working arrangement. "They're really happy because they're able to create their own daily schedule," she says. "One of our employees does his best work from eight at night to two in the morning, and he can do that from his home office."

For Rudig, the biggest challenge of a telecommuting work situation is trust. "It's difficult to take the first step and hire people, and you're never going to feel 100 percent sure about someone," she says. "[I've found that] the best approach is to explain what I need from the employees, make it clear how they'll be judged on their work, and then make it obvious that I'm trusting them to follow through." Before hiring anyone, Rudig goes through an extensive process that involves several interviews in various settings. Inevitably, however, she has to test the person's skills in a work situation. "It all comes out in the wash when we hear if the clients are happy and if the projects are working correctly and being done on time," she says.

To keep employees on track, Rudig will regularly ask for an accounting from her workers. "I'll ask to see how far they've gotten on a project," she says. "If they go beyond what I asked them to do, then I'll reward their accomplishments."

Depending on the industry, telecommuting can work very well, says Lewis. "Some businesses don't require that much supervision. People are often paid on how much work they've done. It also depends on the employee. Some are self starters who can regulate themselves and their workloads, while others have a more difficult time doing that."

Is a telecommuting situation right for you and your business? Find out by answering these questions:

  • Do you have the latest technology available to your employees so they can efficiently work from home?
  • Does your business lend itself to telecommuting? Are the jobs realistically completed on a solo basis?
  • Can you effectively supervise workers when they're in their own office? Do you have a way of checking their work and progress?
  • Do you have a work site in your home office that employees can use when the need arises?
  • Can you be on-call to answer employee questions?