Chuck Baumann’s commute to work takes a few seconds ... literally.
“It’s one of the advantages of having a small business from home,” says the founder of Creative Environments, based in Alamo, Calif.
He should know. Baumann on three separate occasions has run the company out of his house. And though he swears by its benefits, each move was spurred by external factors, including shifts in the overall economy.
“You just follow those 8- to 10-year cycles where business fluctuates,” he says. “If you stay in this industry long enough, every decade or so is like Groundhog Day.”
In response to the current market, more and more builders are moving operations into their homes. This option can mean significant savings, but there are a number of potential pitfalls as well, and failing to account for them can turn your residential oasis into a house of horrors. Here’s what you need to know to run a successful home office.
The first step is finding an appropriate location for your workspace. You may choose a spare bedroom, a study or even a finished basement. The key, experts say, is to set aside an area strictly for business purposes.
“Definitely dedicate a space to the company,” says David Peterson, president/CEO of Watershape Consulting, Inc. in San Diego, Calif. “Everything in that room needs to be work-related — you must be able to shut it down and turn it back on like it’s a separate location. You can’t just run it out of your kitchen.”
In late 2007, Peterson jettisoned his 3,000-square-foot commercial workplace in Carlsbad, Calif. The office was split between administrative and warehouse space, he says. But as the engineering side expanded, the need for storage dropped.
“The office didn’t really fit us anymore,” he says. “Plus, there was a prospective tenant who wanted the space so badly that he offered to buy up all our furniture as well. We just couldn’t pass up the opportunity.”
Peterson has managed his design and engineering firm out of a converted garage ever since.
“So now clients can come right into that space,” he says.
What’s better, a separate entrance virtually eliminates the chance of work encroaching upon the home. Customers, employees and deliveries come and go without ever entering the living area itself. Think of it in terms of your own personal loading dock.
In fact, experts say the best option is a structure that’s completely detached from the house.
Don Schlandt, who owns Advanced Pools & Spas, LLC in Cleveland, Ga., works out of his 1,000-square-foot pool house.
“The key is that it’s something you can easily lock the door to and walk away from,” he says.
Another must is separate phone lines for work and home. A cell phone is fine, but make sure nobody else fields those calls, says Rieva Lesonsky, CEO of GrowBiz Media, Irvine, Calif. Nothing kills credibility like a small child greeting your clients.
“And absolutely get voicemail,” she adds. “Answering machines scream, ‘small-time business.’”
The dedicated area also should be closed off from extraneous noises like kids bickering, dogs barking or landscapers working in the yard. Remember, part of the objective is instilling confidence in you and your services. And a well thought-out workspace goes a long way toward conveying professionalism and stability.
Another benefit to a detached workspace: taxes. In general, home-office deductions are based on the percentage of the home used for business purposes. The requirements are less stringent and potential deductions greater, however, for a separate structure not attached to the home.
Deductions also may apply if at least part of the home is used for storage, including inventory or product samples. For more information, visit www.irs.gov.
Clients who visit Baumann’s office get a clear sense of his firm’s capabilities, since the 17th century French country home is a spectacle in itself. The multilevel deck is mostly limestone masonry, a theme that continues into the pool via a beach entry. There’s also a vanishing edge off the pool’s backside, and an elevated spa.
“If you have that high-end clientele, now you can bring people over — it’s actually a great way to market yourself,” Baumann says. “So we get the water running, put some music on, show them the sunken fire pit.”
It’s somewhat ironic, considering one of the chief concerns about a home-based business typically involves image. Such operations traditionally were viewed as less credible, or perhaps of the fly-by-night variety.
Brian Kelly knows this first-hand. During the early 1990s he ranhis service and remodeling firm Shamrock Pool Services from the family’s N. Lauderdale, Fla., home.
“The appearance you gave was sometimes that of a small-timer,” Kelly says. “It did not always show stability. So yes, I did lose some commercial jobs because of it.”
But experts say those perceptions are changing. For one, home offices are becoming more mainstream. At the end of 2008 there were 16.5 million home-business operations, up from 15.2 million in 2006, according to market intelligence firm IDC.
So how do pool pros squash those negative undertones? Several ways, actually.
Client testimonials, references and portfolios of past projects can enhance your marketing efforts.
And make sure you have your accreditation handy, along with professional affiliations including industry groups, the Better Business Bureau or chamber of commerce.
You could even put a positive spin on it: “Tell them you can charge less because you have less money tied up in overhead,” says Lesley Pyle, president and founder of Home-Based Working Moms in Spring, Texas.
Also, you may want to list a separate address on your letterhead or company literature, or online, particularly if you have small children. One option is a P.O. Box, though some question whether that’s any better than your home. A UPS store might make a better alternative, experts say.
The right frame of mind is critical to running a successful home office. It goes a long way toward ensuring peaceful coexistence with the spouse and kids, experts say.
“Setting those time parameters is difficult,” Kelly concedes. “It really did affect the family life. And there’s a physical strain as well, where there’s almost no break.”
In fact, it wasn’t long before Kelly found himself working 12-13 hours a day. Burnout became a very real concern.
“It’s one of the reasons I ultimately moved out,” he says. “It was a labor of love for sure. But it created a difficult environment where, in order to relax, you had to really separate the pool business from the home life.”
Sonia Traugott saw the arrangement impacting her husband similarly. He routinely began putting in 14-hour days, says the vice president of Sunset Pools in Katy, Texas. “You definitely spend more time in the office, when it’s right there, than you think you do,” she explains. “It could be too convenient sometimes, so it became a blessing as well as a curse.”
It may help to always think of yourself as a business first; don’t allow your work habits to change. The only difference is you’re now based from home.
One of Lesonsky’s clients, a home-based entrepreneur, used to get dressed each morning like he was commuting to an office. Prior to beginning his workday, the man actually walked out the front door, did a clockwise lap around the block, and then re-entered the home with a fresh outlook.
At the end of each day, before retiring to his wife and kids, the man re-emerged from his home and journeyed around the same block — but this time he walked it counterclockwise.
“Sometimes it helps you make that break,” Lesonsky says, “where you’re not obsessed or consumed by work 24/7.
“And close the door [to your home office] when you’re done for the day,” she adds. “You can always go back, but there’s got to be some point when you’re present in the moment of your personal life and not juggling both.”
Provided it doesn’t overwhelm, the convenience of a home headquarters can be immeasurable. Peterson is continually fine-tuning the arrangement, he says. But he’s sold on the benefits.
“Now I can wake up at 5 a.m. and contact my clients on the East Coast,” he says. “And they probably don’t know I’m still in my pajamas, or that I might not even shower for another couple of hours.”