A guide to starting a business from home

Portrait of Sophie Vellam
Campaign Executive
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Starting a business from home

The dream of starting a business from the comfort of your own home is now more attainable than ever. Whether you’re looking for a side hustle or hoping to replace your 9-5 job, running a home-based business can be extremely rewarding. However, as with any business idea, proper planning and preparation are key to making it a success. 

In this article, we’ll take a look at some of the main pros and cons of starting a business from home. We’ll then share some practical tips to help you launch and grow your home venture. 

Pros and cons of setting up a business from home 

These are some of the main advantages and challenges to consider when you’re deciding whether or not to start a business from home.

Pros 

Flexibility. One of the biggest attractions of running a home-based business is the flexibility. You’ll have more control over the hours you work and can generally enjoy a better work-life balance.

No commute. Being able to cut out the daily commute will save you time and money.

Cost savings. Renting or owning a premises is usually one of the largest expenses for a business. Working from home could help you keep your overheads down, enabling you to reinvest more into growing your company. And, with less start-up capital required, the risk of setting up your new business could be significantly lower. 

Tax deductions. You may be able to claim the costs of running your business on your tax return, such as utility bills, council tax, rent payments or mortgage interest, and internet and telephone usage. Find out more here.

Cons

Isolation. If you’re working from home alone with little social interaction, you may struggle with feelings of isolation. 

Reduced networking. You might also find that you need to work harder for networking opportunities as you’re not physically coming into contact with so many people on a day-to-day basis.

Blurring of work-life boundaries. When you’re living and working in the same space, potentially with a less defined schedule, it can be difficult to set clear work-life boundaries. You may feel you don’t truly “clock off” at the end of the working day. 

Professional image. Holding in-person meetings with prospects or customers may be more challenging for a home-based company (although there are an increasing number of co-working hubs and meeting spaces that may help with this), and it’s possible that a lack of business premises might make it harder to establish credibility with some clients.  

 

How to start a business from home

If you’ve decided that starting a home-based business is right for you, then here are a few of the steps you’ll need to take. This isn’t an exhaustive list but should hopefully give you some useful tips to get started.   

Develop an idea and a plan 

You may already have an idea in mind, but if not, we’ve listed some business ideas below to give you some inspiration. The type of business you choose to start will likely be guided by your own talents, interests, and professional expertise. Identifying what you’re passionate about and where your skills lie might help you land upon that brilliant business idea and allow you to do something you truly enjoy. 

Businesses you can start from home

There are many different types of business to start from home, including:

  • Freelance services such as graphic design, content writing, web developmentsocial media management, and digital marketing
  • Consulting services including business consultingcareer coaching, or financial consulting
  • Selling homemade goods, drop shipping, print-on-demand, or online retail
  • Selling online courses or offering tutoring sessions
  • Subscription box business  
  • Virtual assistant business 
  • Recruitment agency 
  • Professional translation services 
  • Pet services such as pet sitting, dog walking, and pet grooming 

Of course, it’s one thing to find a business idea that interests you, but quite another to find one that actually has potential to become a success. Doing research on the market and competition is therefore crucial to help you determine whether your idea is worth pursuing.

The research you do can help to inform your business plan. Having a plan (and continuously updating it) is a good idea for all businesses – it will act as a roadmap, helping you determine your objectives and strategy, and then keep on track to meet your goals. Read our blog post How to write a business plan for essential tips on creating a business plan and to find out what you need to include. 

Notify the right people and get the necessary permissions

It’s important to make sure you have the necessary permissions and insurance to run your home business and also to check whether you need to pay business rates. 

If your home will be used mainly as a private residence, with little disturbance to the surrounding area from your business activities, then it’s unlikely you’ll need planning permission – though if you’re unsure, it’s always best to check. You may need to apply for planning permission if: 

  • You’re going to make major structural changes to your property
  • You’re no longer going to use your home mainly as a private residence
  • Your business involves any activities that are unusual in a residential area
  • Your business activities lead to a rise in traffic or people calling
  • Your business disturbs your neighbours at unreasonable hours or creates other forms of nuisance, such as noise or smells 

If you’re in any doubt about whether or not you need planning permissioncontact your local planning authority (LPA) through your local council.

You may also need permission from your local council if you’re going to advertise outside your home, for example, or if you need a licence to run your business. Other things you need to do include:

  • Check with your mortgage provider or landlord before getting started
  • Check whether you need to pay business rates in addition to council tax. If you’re only using a small part of your home for your business then you don’t usually need to pay business rates. You might need to pay them though if your property is part business and part domestic or if you employ other people to work at your property, for example. You can find out more here.
  • Your home insurance likely won’t cover your business. Check with your current home insurance provider what you’re covered for and make sure to let them know that you’re running a business from home, so that you don’t invalidate your policy. You may then need to purchase additional cover, such as public liability insurance

Create your ideal work environment 

One of the benefits of running a home-based company is working from the comfort and convenience of your own house. However, as we mentioned, the boundaries between home and work can very easily become blurred. That’s why it’s important to create these boundaries, so that you’re able to work as productively as possible and then properly switch off at the end of the day.

If you’re able to, it’s a good idea to have a designated space that you use only for work, such as a spare bedroom if there’s one available. Having a dedicated office space will help separate work from home and reduce distractions. 

You’ll also need to think about the equipment you may need. There are several considerations here, including electrical safety, DSE, and the security of your equipment and data. The Business Wales website has more guidance on this here.

Choose a legal structure and register your business

There are steps you need to take when starting any business, including deciding on a legal structure and registering with HMRC. We cover these in our blog post How to set up a business in 4 simple steps

Get finance for your business

Start-up costs can vary widely from one business to another. If you need help funding the launch of your home-based business, there are lots of different options available. We can provide start-up loans to businesses in Wales to help you get off the ground or grow. 

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