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Working from home has advantages, including eliminating commutes and staying close to family. But running a business from home also risks transforming your whole house into a workplace.

The home office is getting serious.

In a trend that threatens to cast a pall on home life, more home businesses are ramping up to full-time operation. The number of full-time home-based businesses has risen 3.1% during the past five years to 9.9 million in 2004, says market-research firm IDC, of Framingham, Mass. Meanwhile, part-time home businesses--the sideline operations many people think of when they hear the term "home office"--has fallen 32% since 1999 to 5.2 million.

The shift reflects a five-year shake-out in home businesses, which include independent contractors and other self-employed people. While families in the past could afford to have one member dabbling in a sideline even if it's losing money, "this luxury has been disappearing," says IDC analyst Ray Boggs. Marginal home-workers are heading back to the office and a paycheck, he says, while successful ones are saying, "It's time to crank it up a notch."

Working from home has big advantages, of course, including eliminating commutes and staying close to family. But running a booming business from home also risks transforming your whole house into a workplace.

My own home office is in what, in a civilized family, would be an enclosed dining room. After a recent run of 12-hour workdays, I saw drudgery taint our home lives. The more immersed I became in work, the more time my two teenagers spent tethered to their own desks. They even began fighting over our family computer. While their homework benefited from this all-work-and-no-play mood, we weren't much fun. At all.

Wendy Wolfson says her former communications consultancy so dominated her 1,100-square-foot Somerville, Mass., apartment that she stopped entertaining friends. "It was a psychological thing; my apartment became a place to work and sleep," she says.

Nevertheless, there's a clear trend toward integrating home offices and home life. A growing number of people are taking over their formal living rooms for work, says Lisa Kanarek, Dallas, founder of Homeofficelife.com. Steelcase and other vendors are designing hip, upscale office furniture that makes work look more like home. Patterned, colorful fabrics, mesh or wicker chairs, glass work tables and cabinets with doors make the office blend right into your home, as if there were no difference between what you do there and what you do in the rest of the house.

The stuff is pretty, but integrating a full-bore business with home life requires a lot more than furniture; it takes people skills and great family communication. Dave Caplin produces trade shows and conferences full time from his Hudson, Ohio, home. The house, which the family purchased a couple of years ago, has a den. But his wife has claimed it, so he set up shop in his living room, and bought hardwood and leather furniture to make his office blend in.

The family has had to make adjustments, says his wife, Marcy Caplin. Their two teenagers have developed a habit of retreating to their rooms after school so Dave can work uninterrupted. "We've had to learn as a family not to shout" between floors to each other, Marcy says; she recommends a home intercom system for other families contemplating this setup.

The setup works largely because the whole family values what it offers: Dave's presence and a stable family life. In years past, Dave worked long hours in corporate posts and relocated the family twice for jobs. Now, he has promised the kids no more moves--as long as he is self-employed at home. The children "are highly motivated to see it work," Marcy says.

A better route for many home workers is to situate an office over a garage or in a finished attic, Ms. Kanarek says.

Others revert to a setup reminiscent of the family farm. To spare his wife and two small children, David Ball set up his home office in a 10-by-13-square-foot shed in his Greensboro, N.C., backyard. Customers of his health-products firm heard about the setup and kidded him, calling him "Shed Boy." But it worked so well that when his family recently moved, Mr. Ball insisted on finding a lot big enough to build another shed. It looks a bit more upscale and has more storage, but in substance "it's still the same old shed."

But there's a drawback to the segregation strategy too: You risk hurting your home's value. The listing of a "professional home office" on real-estate ads subtracted an average of 5% from the selling price of houses in a recent National Association of Realtors study co-written by G. Stacy Sirmans of Florida State University in Tallahasee. That's probably because the permanent shelving or other fixtures often needed in professional home offices keep the space from being used for other purposes, he says. In contrast, the presence of a cozier-sounding "den/study" added 7% to the selling price, Dr. Sirmans says.

Many business owners throw up a white flag and move the office out. Ms. Wolfson eventually rented space for her office in a business incubator of a kind often run by universities. Some entrepreneurs team up and rent commercial space. Others lease space from such providers as HQ Business Centersor Regus Group, says Cynthia Froggatt, a telework consultant and author in New York. The government supports a handful of telework centers (www.telework.gov), mostly around Washington, D.C., that can house businesses.

From StartupJournal.com
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