What does running a business from home mean?<\/h2>\n\n\n\n
A home-based business is when the main office address for your business is also your home. Whether you\u2019re running an online shop or providing a service where you go out and meet clients, if the business is registered to your home address then it\u2019s a home business.<\/p>\n\n\n\n
There\u2019ll be different legal requirements and tax responsibilities depending on your business.<\/p>\n\n\n\n
For example, if you expect to have lots of customers and deliveries to your home it\u2019s likely you\u2019ll have to follow more regulations than if you\u2019re simply working from a laptop in your living room.<\/p>\n\n\n\n
The government says:<\/p>\n\n\n\n
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- you may need permission from your landlord<\/strong> or mortgage<\/strong> provider and local council<\/strong><\/li>\n\n\n\n
- your council tax bill might change<\/li>\n\n\n\n
- you may need to seek planning permission if you\u2019re making major changes to your home (for example turning part of it into a studio)<\/li>\n\n\n\n
- you might need to pay business rates<\/a><\/li>\n\n\n\n
- check you have the necessary health and safety certificates<\/li>\n\n\n\n
- you may be able to claim tax allowances<\/a> on your business expenses<\/li>\n<\/ul>\n\n\n\n
\n<\/div>\n\n\n\nHow to start a small business at home<\/h2>\n\n\n\n
From online business ideas to practising as a therapist in your own home \u2013 you know you want to set up a home business, but are you settled on your product or service? And what\u2019s the easiest home business to start?<\/p>\n\n\n\n
What business should I start?<\/h3>\n\n\n\n
Lots of people end up diversifying and offering a couple of different things, but when you\u2019re starting a small business, it\u2019s best to keep your plans simple.<\/p>\n\n\n\n
Whether you want to turn your current job into a freelance service \u2013 from accountancy to childminding \u2013 or set up in a completely different line of work, there are hundreds of home business ideas with low start-up costs.<\/p>\n\n\n\n
The question is, what are you good at, and can it generate an income? If the answer\u2019s yes, you have the beginnings of a home business plan. See how to develop it below.<\/p>\n\n\n\n
Starting your own business from home<\/h2>\n\n\n\n
1. Set out your working from home idea(s)<\/h3>\n\n\n\n
Knowing your product inside-out will give you a solid foundation when you start a business from home. Maybe you\u2019re planning to set up as an acupuncturist, or you\u2019re turning your tech expertise into a website consultancy.<\/p>\n\n\n\n
Whatever your products and services, your business idea will need thorough market research<\/a> to succeed. A great place to start is with your local competition<\/a>, or similar business set-ups.<\/p>\n\n\n\n
Research \u2013 ask friends and look at competitors<\/h4>\n\n\n\n
On the one hand, you\u2019re going to be competing for local business and customers. On the other, you can learn a lot from successful home business set-ups, and there\u2019s often potential for collaborations and joint-projects \u2013 and maybe even referrals.<\/p>\n\n\n\n
Spend some time researching your target customers \u2013 are they local, or mostly online? Where are they likely to see your advertising? What sort of prices will work for them?<\/p>\n\n\n\n
Once you\u2019re clued up, build a list of the businesses currently serving their needs and get a feel for what they\u2019re doing right.<\/p>\n\n\n\n
Can you approach a couple of owners and tap into their experience? They may have a long waiting list for their services, and be happy to pass on advice and referrals.<\/p>\n\n\n\n
For example, you might be setting up a business from home as a violin teacher, and live nearby to someone teaching flute. Their advice could be invaluable, with lots of potential for exchanging referrals.<\/p>\n\n\n\n
2. Put together a home business plan<\/h3>\n\n\n\n
Every business evolves as it grows, but nailing down a plan of your own home business ideas, target customers, competitors and financial projections is a must, before you commit time and money.<\/p>\n\n\n\n
Having a business plan<\/a> keeps you focused, and helps you plot a few milestones.<\/p>\n\n\n\n
It\u2019s also handy if you\u2019re looking to get funding for your business<\/a> down the line.<\/p>\n\n\n\n
Your plan should include everything from your home business set-up<\/strong> and insurance details<\/strong> to marketing plans<\/strong>, growth forecasts<\/strong>, and any qualifications<\/strong> you need to work towards.<\/p>\n\n\n\n
When it comes to operations, think about which room you’ll be based in. If customers will be visiting, how will you separate home and work life? Will people be waiting in your living room? If you\u2019ll be making products to sell, will you need a separate, dedicated space?<\/p>\n\n\n\n
And lastly, make sure you know how much money you have to put into your business<\/a>, and how to make it viable. This might be simpler if you\u2019re planning to hold on to your regular job (with its dependable salary) alongside your own home business plans for a side hustle<\/a>, but less certain if you\u2019re handing in your notice and setting up as a sole trader.<\/p>\n\n\n\n
3. Make your home business-ready<\/h3>\n\n\n\n
This all depends on what sort of business you\u2019re setting up in your home. Most won\u2019t require big structural changes, but you might need to factor in planning permission, or at least think about notifying your neighbours.<\/p>\n\n\n\n
Here are the key things to factor in when setting up a small business from home:<\/p>\n\n\n\n
Planning permission<\/h4>\n\n\n\n
If your home is going to remain pretty-much as it is now, with your business \u2018quietly accommodated within it\u2019, government guidance states planning permission shouldn\u2019t be needed.<\/p>\n\n\n\n
Planning permission requirements kick in when your home is no longer used mainly as a private residence, or you have a marked rise in traffic, with customers coming in and out.<\/p>\n\n\n\n
You\u2019ll need to investigate planning permission if you\u2019re located in a residential area and any of your activities may cause disturbance \u2013 from noise and car parking practicalities to things like cooking smells and rubbish disposal.<\/p>\n\n\n\n
Not sure which category your home business falls into? Gov.uk<\/a> can point you in the right direction.<\/p>\n\n\n\n
Mortgage arrangements<\/h4>\n\n\n\n
It shouldn\u2019t mean any change in your mortgage repayments, but the government says you should let your mortgage provider know if your home is going to accommodate a business.<\/p>\n\n\n\n
Home contents insurance<\/h4>\n\n\n\n
Whether it\u2019s a whole new policy or just a tweak to your existing home insurance, it\u2019s a good idea to get clear on your responsibilities and options. For example, your contents insurance might not cover stock<\/a>. We go into more detail about insurance for home businesses below.<\/p>\n\n\n\n
Health and safety at home<\/h4>\n\n\n\n
If it\u2019s just you working from a laptop, this won\u2019t be so important. But if you\u2019re expecting customers to visit you at home, or you\u2019re going to be preparing food, for example, health and safety checks will be needed.<\/p>\n\n\n\n
For the basics, take a look at the Health & Safety Executive\u2019s website<\/a>.<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/09\/chef-ices-cake-at-home-Coetzeepeopleimages.com_-scaled.jpeg?w=1024\")
Image credit: Coetzee\/peopleimages.com\/stock.adobe.com<\/figcaption><\/figure>\n\n\n\n Establishing a business address<\/h4>\n\n\n\n
If you operate in the business-to-business space, potential clients may be wary of dealing with a service provider who doesn’t have a professional business address.<\/p>\n\n\n\n
Equally, if you’re a tenant in your current home, you may not be in a position to register your business at that address.<\/a><\/p>\n\n\n\n
In either case, you might want to consider signing up for a virtual office space<\/a>.<\/p>\n\n\n\n
Even if you’re free to register your business at your home, using a virtual office address can save you the hassle of having to update your details with the bank, HMRC, and on your marketing materials every time you move.<\/p>\n\n\n\n
Consider your neighbours<\/h4>\n\n\n\n
They could be the key to your success or failure, so keep your neighbours on side. Let everybody know well in advance what you\u2019re doing, especially if you\u2019ll be getting lots of visitors or deliveries.<\/p>\n\n\n\n
What might seem inconsequential to you could be a big deal for one or two of your neighbours, from the sound of trumpet practice to a van obscuring their view. Explain up-front that you\u2019ll try to keep disturbance to a minimum, and keep that promise.<\/p>\n\n\n\n
If you do expect an increase in noise or any other disruption, let your neighbours know. Listen to their concerns, do your best to address them.<\/p>\n\n\n\n
4. Think about home business insurance<\/h3>\n\n\n\n
Insurance for a home business will be a must, depending on what sort of set-up you have. The main covers you\u2019ll need to think about are:<\/p>\n\n\n\n
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Public liability insurance<\/h4>\n\n\n\n
Many home business insurance policies will include this as standard. Public liability insurance<\/a> is important if customers will be visiting you at home \u2013 it protects you if someone is injured or their property is damaged because of your business.<\/p>\n\n\n\n
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Quick example<\/strong>: you\u2019re running your hairdressing business from home, and have just cleaned the floor before a client arrives. The client slips on the wet floor and injures their hip. Public liability could cover the resulting legal fees and compensation costs, up to the policy limit.<\/p>\n\n\n\n
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Product liability insurance<\/h4>\n\n\n\n
This one protects you against claims for personal injury or property damage caused by products and goods you\u2019ve designed, sold, or supplied. A specialist home business insurance policy will give you the option to include it, and remember, you may still be liable for a claim, even if you didn\u2019t make the product.<\/p>\n\n\n\n
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Quick example<\/strong>: you\u2019re making and selling children\u2019s toys at home, and a faulty one causes an injury. Product liability insurance<\/a> could cover a resulting claim.<\/p>\n\n\n\n
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Professional indemnity insurance<\/h4>\n\n\n\n
From accountants and IT consultants to copywriters and designers, professional indemnity insurance is relevant to home businesses that offer services and knowledge, and process information. It protects you if a claim is made against you for negligence or error.<\/p>\n\n\n\n
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Quick example<\/strong>: your home-based accountancy business receives a new data file from a client. When sending on the data, you accidentally copy the wrong person into an email and your client sues you for breach of confidentiality. Professional indemnity insurance<\/a> could pay the compensation costs, as well as your legal expenses.<\/p>\n\n\n\n
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Employers’ liability insurance<\/h4>\n\n\n\n