UpFront - August/September 2006

Home Sweet Business

How to know when it's time to move your home-based business elsewhere

By Laurie Zuckerman

When Belinda North launched Sophia's Style Boutique, an online children's clothing store, it seemed like she was onto the perfect plan. The business would satisfy her entrepreneurial urges, bring in some extra income and still allow her to stay home with her young daughter.

Now one year later, Belinda and her husband, Jacob, who joined the fast-growing business, live in a maze of cardboard boxes. Their 3,000-square-foot house in Bellevue, Neb., serves as their home, office and warehouse—and it's coming apart at the seams.

"Inventory has taken over our house," Belinda says. "The boxes are visible the moment you open the front door—they're in every room. The garage is packed, the dining room is full, and tomorrow, 22 more large cartons will arrive. It's too much. We can't get away from it."

Boxes are one problem; the toll the business takes on the family is another. Each morning as many as five employees knock on the North's front door. "Our employees are great, but when we want to eat dinner and have some family time, there they are, working just 10 feet away," Belinda says.

The Norths are excited their business has grown so quickly, but they admit it's a "mixed blessing." It brings a difficult decision to a head.

"We've been debating the pros and cons of moving into a commercial space for months," Jacob says. "We like being so accessible to our daughter at home. And we like our commute. But we've clearly tapped out our potential here. So it's time to face facts: If we want to continue to grow the business, we have to move out."

There's No Place Like the Office
Tired of your dining room table doubling as a desk? Ed Weems, director of Raleigh, N.C.-based Venture Management, a firm that provides ongoing executive support to growing companies, recommends asking yourself these questions as you consider moving your home-based business out of your house:

Can you afford it?
Factor in all the numbers, including what you will save on home utilities as well as the wear and tear on your house, Weems says. You should also consider tax implications if you currently write-off the portion of your home used for your business.

Are you having trouble focusing on work?
A lifelong entrepreneur, Weems has run businesses at home and at an office. "Even if I was just going down the stairs to work, I dressed for work," he says. "In fact, I wore a tie. If I wore jeans, it felt like I was working on my day off. Dressing as if I were going to an office helped me make that mental shift."

Are your employees comfortable in a home environment?
It's much easier to recruit when you have a nice office building, Weems says. "A home-based business can give a perception of a lack of stability."

Do you ever host client meetings?
Clients typically feel more at ease in an office environment rather than your living room.

Is there room to grow?
Typically, two or three people can work comfortably in a home. Beyond that, Weems says, it becomes cramped. "Your house no longer feels like a home. You have a place to work, but you don't have a place to live."