Reality Check: The Truth About Starting a Homebased Business

It's your dream, yes, but dreams are rarely wrapped up with a bow and left on your doorstep. You've got some work to do.
Magazine Contributor
9 min read

This story appears in the September 2001 issue of Subscribe »

How much would I love working at home? Let me count the ways: sleeping in, working at my own pace, and perhaps best of all, a once-grueling commute reduced to the few steps from bed to home office. Sound too good to be true? That's because it is, at least to a degree. Running your business from home may seem like a dream come true, but don't kid yourself-it's still a business, and all the blood, sweat and tears aren't going to disappear just because you're in the comforts of your own home.

Although starting a homebased business should be filled with excitement and optimism, the potential pitfalls of entrepreneurship should also be on your list of concerns as you plan your business. If you haven't thought about what it's really like to work from home, take a look at what some entrepreneurs found out when they started running their homebased businesses-so you can be prepared as you start one of your own.

Dream: Getting away from the office politics and gossip
Reality: Being isolated, with no one to share things with

Aaah, finally some piece and quiet. No gossip to listen to while you get a drink at the water cooler. No distractions to keep you from getting your work done. In actuality, the absence of the usual office interaction may be a shock to those who once detested the daily encounters at the office. After being fired from a radio job, Joanne McCall decided to start her own homebased business in 1995, McCall Public Relations, to generate publicity for business books. Eventually, McCall began to look forward to the stops from UPS, FedEx and the mail carrier. "I knew I had to deal with the isolation issue when I started getting excited about having to run errands," she says. "I remember going to the Post Office and bank and thinking, 'Oh, isn't this fun?' "

"I knew I had to deal with the isolation issue when I started getting excited about having to run errands."

McCall's experience may seem a little humorous at first glance, but isolation is the single biggest problem in running a homebased business, and it's very serious, contends Alice Bredin, co-author of The Home Office Solution: How to Balance Your Professional and Personal Lives While Working at Home . Bredin says that over time, a lack of interaction with other people will take its toll on your energy level: "Other people-along with the sights and sounds-imbue us with energy. If you don't have that, you may not be as creative or good at problem-solving."

To avoid burnout, you need to integrate physical and social activity into your routine. McCall, for instance, takes evening classes in a variety of subjects to enrich herself and be around other adults with similar interests.

To put it another way, you need to go easy on yourself during the start-up stage, because it is indeed stressful, notes Barbara Solomon , a marriage and family therapist in Santa Paula, California. "Be realistic about your needs," she says. "Before, you may have needed some downtime after a day in a populated office, but now you may require some social interaction or a physical outlet to maintain balance."

Dream and Reality

Dream: No commute, flexible hours
Reality: No real stopping time, grueling hours

It seems entrepreneurship and sacrifice go hand-in-hand. But don't get too caught up in self-destruction:

Imagine you're stuck in standstill traffic for an hour or getting cut off by some crazy driver, and it's only 7 a.m. You clench your teeth as you silently scream, "I hate driving to work!" because for you, this is reality. And while working at home saves you from battling the roads every day, does that mean you can effectively start and end your workday that much sooner? Not exactly. Without a commute, you might actually be tempted to spend more time working. "Not only will you be more inclined to work more because your work is nearby, but you also don't have that break," says Bredin. "So 45 minutes after you leave your desk, you may still be totally engrossed in your work mentally."

Indeed, a homebased business is often much more work than any job you might have. Todd Brabender , who started Spread the News Public Relations in 1996, can attest: "[During start-up,] I thought about my business and clients 24 hours a day," he says. Being based in the Midwest, Brabender tried to make himself available until 7 p.m. most evenings for media outlets on the West Coast. This often meant interrupted dinners and abbreviated playtimes with his kids when a client would call. Realizing his commitment to his business was taking precedence over his family obligations, Brabender decided to set strict work hours of 7 a.m. to 6 p.m., allowing time for exercise, family and relaxation to recharge for the next day. And though he still works after the 6:00 whistle some nights, it's never at his family's expense.

On the flip side, there are those homebased business owners who initially have a hard time getting down to business. Patricia A. Thorp , for instance, found it extremely difficult to be productive and put in eight billable hours a day when she first started her Miami-based communications firm, Thorp & Co. "It was really hard, and it's hard for a long time," she says. "You have to be willing to show up every day. Some people say the number-one job skill is showing up." Thorp soon devised a routine whereby she'd do billings on certain days, mailings on others and so forth, giving her the structure she missed from her former corporate job.

Going From Corporate to Homebased

Going From Corporate to Homebased

After a near-fatal car accident in 1986, Patricia Thorp was unable to work full time and had to give up her job as general manager of a public relations firm in Miami. Yet even as she underwent rehabilitation for her injuries, she was thinking about the next step: starting her own company. Trading her Windsurfer for her sister's computer, Thorp started Thorp & Co., which is now ranked the fourth largest independent PR firm in Florida.

While Thorp is grateful to have started her own business, she was also quite content to work in a corporation. If you're used to the big-business environment but contemplating a switch, be aware of some of the obstacles she faced:

  • Going from head of a major PR firm to being a nobody
  • Elimination of the structure, friendship and built-in discipline of an office
  • Having to be an efficient executive while also performing secretarial tasks

If you're prepared to take on these challenges, more power to you-because as Thorp can attest, it's worth it: "After being in business for 13 years, there's so much to be proud of and a financial base that I never would have had if I were still working for someone else."


Dream: Working at home to be with your children
Reality: Not getting anything done because you're attending to your children's needs

Some noble entrepreneurs may look to run their businesses from home so they can also raise their children. But try to imagine what it would be like to have your kids at your office right now, every day. Ellen Cagnassola knows all too well the rigors of bringing up babies and a business. She started Fanwood, New Jersey-based Sweet Soaps at her home so she could raise her kids and not miss any of the pivotal moments in their lives. With a 5-month-old and a 6-year-old, she's had to do a real juggling act. Adjusting her work schedule to their school, nap and activity schedules, Cagnassola doesn't really get an opportunity to work alone until 8 p.m., and she sometimes burns the midnight oil until 3 a.m.

Still, the use of child care is up for debate among professionals. Some experts contend it sends a negative message to children when a parent is there but unavailable or is constantly saying, "Shhhh!" Bredin, for one, believes most homebased entrepreneurs need child care in order to offer children the attention they need. Solomon, on the other hand, asserts a child can feel comforted just knowing the parent is there. Whatever the answer, most everyone agrees that drawing boundaries between work and family life and taking time to explain these boundaries to children-before they feel any kind of neglect-can help alleviate any stress on the family.

And all told, taking the time to prepare yourself for the rigors of homebased entrepreneurship can help alleviate any stress on you. "The most important skill you will need to develop is multitasking," advises Cagnassola. "I never knew I could actually cook dinner, make soap and cut deals on the phone all at the same time, from the comfort of my home!"

  • More than 12 percent of U.S. households currently house a homebased business. (Source: SBA Office of Advocacy )
  • There are 18.8 million to 20.3 million home office households in the United States. (This number does not include corporate telecommuter households.) (Source: IDC )
  • Approximately 44 percent of all U.S. households have an income-generating or after-hours home office. (Source: BIS Strategic Business Decisions)
  • The average income for income-generating home office households is $63,000 per year. (Source: IDC )
  • More than 55,000 homebased businesses have sales of more than $1 million per year. (Source: " Home-Based Business: the Hidden Economy " by Joanne H. Pratt Associates, a report commissioned by the SBA)


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