To be successful as an entrepreneur, a person must have a combination of various traits, including discipline, self-confidence, ambition and flexibility. But being the right kind of person isn't the only thing that contributes to an entrepreneur's success. In fact, environment is an important factor. If you are considering starting a business from home, this is even more important. Let's take a look at some of the practical aspects of being an entrepreneur that you need to consider before opening up shop. (Read Are You An Entrepreneur? to find out if you have what it takes to be your own boss.)
Most experts recommend that you have an area of your home that you can dedicate exclusively to your business if you're going to work at home.
- From a psychological standpoint, having a separate work space helps create a boundary between your work life and your personal life.
- From a financial standpoint, having a space that you use exclusively for your business allows you to take the home office deduction on your taxes.
If you don't even have a spare corner where you can set up a desk and you plan to work from your couch, bed or dining room table, it may be difficult to get out of the relaxation mindset and work effectively or to get the distance from other family members that you need in order to focus. (To learn more about claiming your home office on your taxes, read How To Qualify For The Home-Office Tax Deduction.)
Peace and Quiet
If your current job schedule means that you're always away from home at the same days and times, it's difficult to know whether those days and times will provide the peace and quiet that you need to work once you substitute home-based employment for outside employment.
- If you live in an apartment, for example, you may have neighbors home during the day who will distract you with their noise or their social visits.
- Or perhaps there's a construction site near your home that's perfectly quiet in the evenings and on weekends, but unbearably noisy during regular work hours.
- Maybe you live on a busy street where the daytime traffic is noisy.
Of course, if you're the type of person who can block out noise or distract yourself from it with some music, a white noise machine or the drone of the TV in the background, you won't need to worry about these things. Other people, however, need near-complete silence to work effectively.
Also, if you expect to spend a lot of time on the phone with clients, background noise can detract from your professional image. If you have kids or pets, you'll also want to make sure they can't be heard while you're on the phone. This includes noise and distraction from family/roommates as well. (To read about some aspects of working from home you may not have considered, read Can You Handle A Home-Based Business?)
If you live with others, will they be around during the hours you plan to spend working? If so, their activities or even their presence can be a major distraction. If you have a spouse who works at home already, do both of you have the self-control to spend the day working efficiently on your respective assignments, or will you be too distracted by having someone around to talk to all the time? (Does your roommate work in a field related to your business? Maybe you can help each other. Read Small Business: It's All About Relationships to learn how collaboration can help your business succeed and grow.)
Kids are such a significant distraction that they deserve their own category. By working at home, you can inadvertently become a stay-at-home parent. During the school year, you'll have about an eight-hour window to work without interruptions, and less if you have to drive the kids to school and pick them up yourself. It may be worth it to hire someone to provide transportation to and from school as well as after-school snacks and homework supervision to give yourself plenty of uninterrupted time to work each day. Or perhaps you can barter your way into a carpool in exchange for the product or service your business offers.
As far as summer vacation goes, you'll need to plan to largely take those months off from work or arrange some activity to keep your kids entertained during the day. The latter can be expensive, and may create conflict with kids who want to enjoy their vacation by staying home. You may be able to solve both problems with a compromise - the kids only leave the house for half a day, for example, or they spend half of summer vacation at camp and half at home. If your kids have a friend with a stay-at-home parent, perhaps you can pay that parent to "babysit" your child several times a week. If children can play with their friends, they will be less likely to feel neglected. (Read about some inexpensive ways to occupy your kids during summer vacation in Budget-Friendly Summer Fun.)
Are other people depending on your self-employment income? It's one thing to go for broke when you're single, but if you have kids and/or a spouse, putting your finances at risk may mean putting their finances at risk. You don't want to lose your retirements savings, money that was earmarked for your child's college education and the house in an attempt to start your own business. (Read how to manage saving for your children and your post-work years in Don't Forget The Kids: Save For Their Education And Retirement.)
Personal characteristics and your life situation will have a major influence on your potential to succeed as an entrepreneur. Before taking a financial and career risk, make sure to assess whether your personality and home setup will contribute to or hinder your prosperity.