Running a business from home provides numerous advantages over having an office such as low overhead costs, savings on not having to commute, tax breaks, and much more. In this article, we’ll explore the best steps aspiring entrepreneurs should take to start and manage a business from a rental property.
Prioritize Safety
Data is an integral element of your business’ success as it can help you predict market trends, learn about customers’ purchase behaviors, identify competitor weaknesses, and much more. But, if your data falls into the hands of bad actors, it can cause significant damage to your finances and reputation.
Here are some tried and tested methods to keep your data safe:
- Install antivirus and malware protection software on all machines used for business. This can include mobile phones, tablets, laptops, desktops, etc.
- Integrate 2FA (two-factor authentication) for all business-related accounts.
- Create strong passwords which include a combination of numbers, special characters, and a mix of upper and lower case letters.
- Back-up data to a secure server periodically. If your data is stolen, a backup will allow you to recover faster and prevent financial difficulties.
Additionally, remain vigilant while surfing the internet on work gadgets, as 35% of security breaches include an element of social engineering. For instance, a hacker may impersonate themselves as a service provider (bank, cell phone company, etc.) and make you click on a phishing link disguised as a payment link for payments. As good practice, always check the sender ID. If in doubt, reach out to your service providers personally regarding the communication.
Use Digital Tools for All Business Projects
When you’re crunched for space, the last thing you want to deal with is paperwork. Not only is paperwork tedious to manage, but it requires ever-increasing spending on printing and storage. Part of the trick to managing a business from a rental property is by working smarter, not harder. The smarter way to work is to use digital tools for all business projects, such as:
- Venmo: One of the leading payment platforms on the market, Venmo allows you to make and receive payments in an instant. Additionally, all records will be stored digitally on your account and can be accessed at any time.
- DocuSign: Rather than printing and sharing contracts, use apps such as DocuSign to share them via email. Additionally, the app allows you to sign documents digitally and protect them with encryption.
- Buffer: When it comes to managing multiple social media handles, social media management apps like Buffer are a must. Buffer allows you to upload content simultaneously across all channels, create performance reports, and manage user interactions from a central dashboard.
- Accounting Software: Struggling to manage business finances? Accounting software is just what you need. Using this tool, you’ll be able to create financial statements with just a few clicks, providing complete clarity regarding finances and future business decisions.
Designing Your Space
Here are tips for designing and completing your space from furniture to lighting:
- Design the Office for Success: According to the SBA, 50% of all businesses in the United States are run from home, which means that having limited space should not be a barrier to designing a functional home office.
- Keep Furniture to the Minimum: An ergonomic chair, desk, and storage is the bare minimum needed for a workstation. For storage, consider purchasing vertical shelving as it allows you to store more in a small space.
- Buy Some Houseplants: Working from home can be stressful, but research shows that houseplants serve as natural stressbusters, helping individuals maintain a positive mindset throughout the workday. Additionally, they purify the air of toxins and reduce noise disturbance.
- Install Good Lighting: Working in bad lighting can lead to eye strain, headaches, and irritability at work. For days when you work well into the night, it’s important to have good quality lighting in the office. The best option is to purchase lamps or ceiling lights that use LEDs.
Completing Your Space
- Invest in High-speed Wi-Fi: A reliable, fast internet connection is a must for home-based businesses. Research the best providers in your area and compare them based on speed, reviews, and pricing. Opt for the provider that best meets your needs regarding bandwidth and price. As a business, you could be eligible for corporate pricing, hence remember to inquire regarding that.
- Check Your Lease: As you’ll be running the business from a rented apartment, it’s important to confirm that you’re legally allowed to do so. The lease document provided to you by the landlord or the HOA (homeowners association) should include clauses for what type of businesses could be run from the property. Additionally, you’ll need to adhere to any requirements included by the owners.
Furthermore, speak with your insurance provider to check whether your renter’s insurance will cover liabilities arising from the business. If you need to purchase separate business insurance, it’s best to do it at the earliest. Do not launch the business before completing these formalities to avoid any future inconveniences.
Apply for Required Licenses
Depending on the industry and type of goods sold, you may need to apply for licenses or permits. On average, licenses and permits take a couple of weeks to obtain. You need to gather paperwork, submit applications, make payments, etc. Hence, make this a priority and start the process as soon as possible.
Take Advantage of Tax Deductions
Home-based business owners are eligible to claim business-related expenses as tax deductions, which can include:
- Cost of equipment such as laptops, office supplies, etc.
- Expenses related to homeowner’s insurance, HOA fees, mortgage interest payments, and more.
- Cost of repairs made to the space used for business activities.
While you can claim these expenses as a sole proprietor, register the business as an LLC or an S Corp. They protect personal assets and finances from business-related liabilities. Establishing a business registers it as a separate legal entity, unlike in a sole proprietorship, where the business and owner are considered the same entity.
Plan for a Larger Space
If you think your current space will become insufficient in the near future, look at larger apartments to move into. Look for areas where the cost of living is lower. This allows you to rent a larger space for less and bring down business expenses as well.
Along with a workspace, look for a home that includes space for personal activities as well such as an extra room that can be converted into a gym or entertainment space. Use an apartment search tool to browse properties in different neighborhoods and visit the apartment before making a final decision.
Creating the perfect home office in a limited space will require leveraging the power of technology, purchasing minimal furniture, and investing in a fast, reliable internet connection. Additionally, prior to signing, get a confirmation in writing from the landlord or the HOA granting you the right to manage a business from the rental property. When it comes time to expand the business, look for a larger property in a better neighborhood that strikes a balance between your personal and professional needs.
