The Blog Of TL Wall Accounting

Should You Have A Home Office Or Rented Space?

At some point every sole entrepreneur thinks about where they should be working. Sometimes it’s at the beginning; sometimes it’s after a year or so. There are multiple considerations to think about if you’re looking to move into a rented space for your office. Let’s take a look at some of those concerns.

1. Income


MagicDesk via Pixabay

Income is the biggest consideration when it comes to making this kind of decision. If you’re new and don’t have any clients, it’s nothing you should even consider. What you’ll learn early on is that it’s harder being self employed at the beginning of your new career, and you want any funds you have to help give you time to get your business up and going.

2. Clients

Certain types of careers like lawyers and real estate developers might want to have a place where they can entertain clients. If you’re house is large enough to permit that kind of space, you might want to stay close to home. If not, and you have the potential to have a lot of clients, you might not want all of them coming through your house to get to your office.

There are ways around this if you don’t want to rent space outside the home. Somme people built small offices on their property somewhere in back of the house. Some create an area that has a separate entrance so clients come directly into an office space instead.

3. Solitude or networking

If you’re someone who likes solitude, working from home is a great way to go. You can still have pets around who’ll give you moments of peace during a hard work day; it’s hard to beat.

If there’s a lot of activity going on in the house while you’re trying to work, it’s a good reason to look for a separate space. If you live in larger cities, you don’t have to rent separate office space that costs a lot of money.

Many communities have something called “co-working” space. It can cost as little as $100 a month to have a desk, standing or regular, free wi-fi, free use of a meeting room, 24/7 access and possibly many other amenities. Not only that but you’ll have the sounds you might have been used to when you were working for someone else; many people need that to concentrate. It also offers you opportunities to network with other entrepreneurs; that could be beneficial in many ways.

4. Tax write-offs

Either way you go, you get to write off your office space. Whereas the rules for home office space can be dicey (which is a good reason to work with an accountant), paying for office space outside of the home is easier to calculate. Any and all expenses related to having an outside office are easier to track.

5. Expansion

If you’re looking to expand your business or need employees, it’s hard to do it from your house. If you have a large space you’re using, such as a gutted out garage or barn, it might be possible. If not, renting space is the way to go.

This brings back the consideration of income and rental space costs. If you’re looking to expand, a 12×12 office isn’t going to be big enough. If you’re looking to expand down the road, 1,000 square feet is way too much initially. This is where business planning needs to take place; you’ll need at least a 3-year plan to work from.

These are only 5 things to consider when it comes to working space. If you have others, please share.
 

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