For today's home-based entrepreneurs, the decision to move their business out of their home isn't so simple anymore.

By Reed Richardson

 


After nearly 10 years of running her embroidery design business out of her Austin, Texas home, Jenny Hart recently took the plunge and moved her business out of her house. "It was scary and, at times, I was still a little unsure about it, but I was definitely at the ‘I am done!' stage," Hart says of the move, laughing.

Initially founded at her kitchen table as a more of a hobby than a business, Hart's online and mail-order company, Sublime Stitching, had long since blossomed into a successful, full-time venture, one that required two part-time employees to handle all her sales orders. But as her business grew over the years, so too did its reach into her house, and by last summer its footprint had taken over a good chunk of her home's physical space. And with her job always within easy reach, she says she often succumbed to the temptation to just keeping working: sometimes seven days a week, sometimes as late as 11 p.m. every night. "Literally, it had become hard to put walls between my work life and my personal life," she explains. "I really wanted my house back."

Not your parents' home-based business anymore
Of course, using one's house as the launching pad for a small business has long been a favorite money-saving tactic among part-time business owners and entrepreneurs looking to survive the often-difficult early stages of a start-up company's life cycle. But recently, a larger demographic shift has begun to occur within the ranks of home-based businesses, one that is upending the conventional wisdom among entrepreneurs about when, or even if, they should let their businesses leave the nest.

"The common perception is that home-based businesses are merely hobbies or side businesses contributing little to the business owner's income or the overall economy," a recent Small Business Success Index (SBSI) survey of home-based entrepreneurs noted. But this narrow viewpoint no longer reflects reality, the survey's results found. Thanks to vast technological advances in productivity and connectivity as well as a growing societal acceptance of working out of one's house, the study found that home-based businesses aren't just for moonlighting and start-ups anymore. Instead, the data showed that today's home-based business landscape includes an increasingly diverse, well-established, and financially successful array of companies.

In fact, according to the SBSI data, full-time home-based businesses--defined as those companies that provide their owners with more than half of their income--now employ more than 13 million people nationwide and make up one-third of all small businesses in the country. And among these home-based companies, almost half have been in business more than 15 years, with only one in five having existed less than five years. What's more, the survey reported that the median household income for these full-time home-based entrepreneurs ($75,000) was roughly 50% higher than for U.S. households in general ($50,233). "Homepreneurs are operating significant businesses that are as successful as non-home based businesses," the SBSI survey concluded. And because of statistics like these, the survey also predicted the number of homepreneurs is likely to surge over the next few years.

No office = No credibility? No way.
These changes don't surprise Steve King, founder and president of Emergent Research, a small, California-based consulting company that specializes in studying home-based entrepreneurs. "It's definitely different now," he says. "It used to be that home-based business owners would move out the minute they could afford it because they didn't feel like they were successful or credible unless they had a ‘real' office," Kings says. "That's just not the case anymore. Now, more and more of them are only willing to do it if they are projecting a revenue boost or return on investment from the move."

As anecdotal evidence of this new attitude among home-based businesses, King points to his own company, which has been based in his home for 18 years and where he, his wife Carolyn, and son Thomas all work. "We have several large corporate clients now and they don't think anything of it that we're based out of our house," he says. "When we were starting out, however, I don't think we could have all done this from our house. But now I think our society has reached a tipping point where home-based businesses have much more credibility and, consequently, many of them are staying put longer and some, like mine, may never make the jump out of the house at all."

More eggs might mean a bigger nest
Still, many home-based small business owners may have ambitions that would necessitate moving their companies out of the house someday. But are there any telltale signs that they should be on the lookout for? "More often than not," King explains, "once your business reaches the hire-an-employee stage, you need to at least think about moving." Bringing outsiders into your home regularly to work, he points out, can create lots of extra responsibilities and complications. Suddenly, everything from employee parking availability to local zoning laws to workspace safety regulations can become pressing legal and logistical issues, all of which can prove to be big distractions for a small business owner looking to expand.

What's more, whether your home-based business is contemplating adding staff or rolling out new products or ramping up production capacity, you can't overlook the all-too-critical issue of space. After all, many full-time, home-based businesses have a propensity to creep into every unused corner of a house almost from the outset. So, if your home-based business has had years to put down roots throughout your home, carving out additional square footage so that you (and the rest of your family) won't be constantly tripping over new employees, additional inventory, or added machinery can become a distinctly difficult challenge. To prevent those future crises, a pre-emptive move might be in order.

"My breaking point was when I just had boxes on top of boxes," recalls Hart. With two part-time employees working 20 to 30 hours a week organizing products and fulfilling shipping orders, Hart says she realized last summer that her business's size had surpassed her house's capacity to contain it. "I took a long look at the direction of my company and decided it was time," she explains. "I just couldn't store things efficiently anymore and the lack of space made even doing inventory difficult. It was very frustrating."

Emotions such as frustration, loneliness, dissatisfaction, or even old-fashioned anger may not seem like legitimate reasons for moving a business out of one's house, but homepreneurs ignore these early warning signs of trouble at their peril. After a few years of toiling away--often in isolation--at a home-based company, even successful business owners can end up feeling like they are trapped on a desert island or stuck in a deep rut. This is particularly true for entrepreneurs who, before they launched their own companies, derived most of their social life from their work life. And if the original drive and passion for one's business slowly turns to isolation or apathy, a home-based business owner might be better served by a change of venue.

Striking the right balance - hybrid models, co-working
Make no mistake, a full-on move out of one's home can be a very costly enterprise when things like rent, computer workstations, office furniture, security, insurance, and even commuting costs are added to a small company's financial top lines. What's more, even successful home-based business looking to expand may not require a whole storefront or an entire office suite. For those companies, an increasingly popular alternative involves the practice of renting temporary or part-time access to professional office space office, or co-working, as it's also known. Once a rarity, part-time or drop-in office leasing--sometimes called "virtual offices" or "hot desking"--has grown increasingly popular in the past decade, with thousands of locations now available.

"If you just need an outside desk, workspace, or, occasionally, a conference room, co-working facilities have real appeal," counsels King. "They're kind of an in-between step for home-based business owners who aren't ready to fully commit to a move. Plus, these facilities often provide enough community and networking with other small business owners that those emotional reasons for moving a business out of the home eventually fade away."

For her part, Sublime Stitching's Hart ended up adopting a kind of hybrid home-based business model as well. She relocated all of her business operations as well as her company's shipping and order fulfillment center to a very small single-story building near her house that she rents full-time, but she still maintains her embroidery design studio inside her home's garage. "Now, I usually work at the office in the morning and go home to work in my studio in the afternoon," she explains, before gushing, "I just can't emphasize enough how much I like not having my office in my house anymore."

As for all that frustration that prompted her business move in the first place? Hart says those feelings have now been replaced with a healthy regard for separating her career and her personal life along with renewed confidence about her business's future. For home-based business owners pondering whether or not to move out, those sentiments can be powerful reasons to consider. But remember that for many homepreneurs, staying put, rather than moving, may be the best way to achieve them.

 

To check out the Small Business Success Index survey of Homepreneurs online, go here:
http://growsmartbusiness.com/wp-content/files/Homepreneurs_A_Vital_Economic_Force.pdf

To read more about Jenny Hart's experience moving her business, Sublime Stitching, go here: http://sublimestitching.com/newoffice.html

To learn more about co-working and to find other shared workspaces check out the Co-working wiki page here: http://coworking.pbworks.com/Coworker or search temporary-real estate companies like http://www.regus.com/

For a checklist of office space considerations to help your business in its search for a new home, go to: http://www.businesstown.com/hoco/home-commercial.asp