Professional costs will include Accountancy and Solicitor fees for registering the business and setting up bank accounts. Insurance is essential for business activities and financial cover.
Equipment and supplies will be necessary like phone, internet and computers be it a PC or Laptop along with possible Software. Data Storage is useful rather than saving physical copies of your hard copy. Desks and Chairs of course and Printer will be part of the set-up costs but Stationary, paper and printer ink or toners will be ongoing costs.
Direct business costs will depend on the business activities. Service based or Sales will have different demands. Stock being an obvious cost but the owner must be very careful and limit these costs to the minimum. The majority of businesses fail in the first 12-month period spending too high and not generating enough income to cover this.
Buying commercial space is very costly and not an option unless the business has substantial resources. It is also a poor business strategy allocating so much capital to the company premises when cashflow is so important at the early stages. Renting is an option but the cost increase in tenancy agreements is up as much as 50% in some cases since covid. Therefore working from home is an attractive option for businesses that can adapt.
The Home Office is an attractive option allowing the business owner to save money on premises. The expense involved in a work premises in maintenance and daily running costs is very high for such a critical period for Start-Ups businesses. Home Office will alleviate a lot of these costs.
Working from home is more rewarding work-life balance. Choosing your work hours gives more flexibility for family life if your office is in your home. Your family can also help and assist in certain tasks giving it a family business feel.
Business hours is a major advantage as the owner can decide what hours to work each week. Commuting to work can take up time in traffic and long-distance journeys. Several hours per day can be gained in the morning and evening. Time is precise in Start-Up businesses trying to combine different roles into one.
Starting a business is very stressful with added worries and responsibilities. Will the business succeed? How will I pay the Set Up costs? Will I get an Income from it? Work hours can double from 36 per week to 60 even 80 hours per week. Long hours naturally increase stress but the home environment surrounded by family and home comforts is a good coping mechanism.
Commuting to work can take up a lot of time in traffic and long-distance journeys. The hours lost week to week will total up. This time can be better spent on daily productive tasks that will make the difference.
Lucrative Tax advantages are available incorporating home expenses into businesses expenses. It varies according to each home and business something that your accountant can advise you on. Weekly costs like heating and energy are just an example of what can be claimed. Over the tax year this will be substantial helping to reduce tax bills.
"Our online retail business PrinterInkCartridges.ie started working from home during covid like many business but as result of the cost savings we continue to work from home for all staff and management. "
Gareth Murdock, Director @ PrinterInkCartridges.ie
With the impact of covid many businesses had no choice but to work from home allowing staff to set up home office. Within a few months employers found staff could be as productive at home and the running costs of company offices decreased with very little on site activity.
Our own business PrinterInkCartridges.ie moved to a home office scenario with immediate effect at the start of covid. We experienced similar results with staff productivity actually increasing as employees were granted the same access to customer accounts etc. Management could communicate efectively using email, phone and zoom and so the overall business performance improved.
This obviously influence our decision to make home working a permanent solution. With productivity up the business cost expensives were down through lower energy and heating costs, office supplies and stationery. But the major cost saving going forward would be on office premises rent and rates which is no longer required. We forecast £50,000 savings in the 2022 calendar year which is huge plus for the companies cashflow.
So the advantages are obvious for Startup businesses if they go the home office route taking into account the funding obstacles involved for new businesses. Certain business can adapt to home office easier and with some businesses working from home will just not be possible if storage space etc is required. This decision will have to be made by each individual company.
Article By: Gareth Murdock